A word of advice to the premier: expect the unexpected

In 1983 when a 29-year-old John Brumby was elected to Federal Parliament, he would never have imagined that 24 years later he would reach the summit of his political career as premier of Victoria.

Brumby's political career has overlapped a period of dramatic change in the Victorian economy and society. The economic restructuring of the late 1980s and early '90s hit the Victorian economy - dependent on tariff-protected manufacturing - particularly hard. The centre of a new globalised Australian economy shifted to Sydney and the Victorian Labor government failed to manage the crisis.

Voters deserted Labor, first at the 1990 federal election when Brumby lost his seat and then at the 1992 state poll when Labor, led by Joan Kirner, was reduced to a rump. The shattered party soon turned to Brumby as leader. This was a time when politics was about the conflict between winners and losers; those who had benefited from economic change and those who lost out. In government after 1992 Jeff Kennett embraced this politics, and promised Victorians that his tough policies would purge the state of the weaknesses that had dragged it down.

In early 1999, when Labor dumped him and installed Steve Bracks as leader, Brumby seemed permanently confined to the ranks of political losers. Today the political upheavals of the 1990s seem far distant. John Howard went from being yesterday's man to four straight election victories and now John Brumby, the struggling opposition leader of 1999, will be premier in 2007 with a government in an apparently invincible position. But Brumby might reflect that his political career may have more twists and turns to come and that the emerging challenges for the government may be greater than those that have confronted him as treasurer during an economic boom.

The example of other state Labor governments suggests that the political tables can turn quickly. Labor administrations in New South Wales and Queensland sailed through two largely trouble-free terms before enduring crisis-ridden third terms plagued by major infrastructure collapses. Both governments survived these crises, but Brumby would hope he would not have to rely on the Victorian Liberals being as inept as their NSW and Queensland counterparts.

There are potential minefields ahead for a Victorian Labor Government that Brumby will have to guard against. It has been easy to demonstrate fiscal responsibility during an economic boom, but this boom has increasingly been financed by a debt explosion that now encounters real resource constraints, apparent in the squeeze on housing affordability.

Any economic downturn will force harder political decisions, ones that Labor was unable to make in the early 1990s. Even if the economic good times continue, voters' expectations will continue to rise and they may turn on Labor as they seem to be turning on John Howard.

Over the past decade environmental policy has moved from a values or lifestyle issue towards the centre of economic policy, but with limited natural resources available, environmental debates necessarily create winners and losers. Labor's electoral collapse in the Latrobe Valley at the 2006 state election was largely due to local grievances about water allocation - and conflicts around water use may prove intractable for the Government.

With this current generation, state Labor governments have striven to distance themselves from the financial crises that crippled Labor administrations in the early 1990s; they have borne the banner of fiscal conservatism with pride, and one of Brumby's key goals as opposition leader was to commit Victorian Labor to this approach. Yet in NSW and Queensland, Labor has been accused of allowing public infrastructure to decline.

As Treasurer, Brumby has extolled the virtues of Public-Private Partnerships to finance infrastructure, but their implementation has been problematic. The rocky career of the regional fast train project has exposed weaknesses in Labor's ability to manage complex projects and it contributed to the slump in Labor's Bendigo support at the last state election.

In a globalised economy it is human capital as much as physical infrastructure that drives economic competitiveness, yet public education in Victoria faces significant challenges. In government, Labor has stressed a rhetoric of quality and benchmarking but the drift of students to private schools has continued, while regional and working-class youth are increasingly disinclined to continue with further education after year 12 as the rewards of entry to a labour market approaching full employment seem attractive.

The Victorian Certificate of Applied Learning has been popular but it, together with the expansion of selective public schools, threatens to revive the level of class streaming in secondary education outcomes that previous Labor educational reformers such as Kirner campaigned against.

During Labor's years in office, the Greens have had unexpected success - and many Labor politicians are probably happy with the migration of much of the political left out of Labor into the Greens. Certainly in the short term this has aided the Government's ability to manage the Labor Party. At the 2006 election, opportunistic preference deals deprived the Greens of the balance of power in the Legislative Council, but in the long run Labor must resolve whether its current aggressive stance towards the Greens is sustainable.

Brumby's harder-edged style, together with the departure of John Thwaites, may reduce the Government's attractiveness to Green-inclined voters. The prosperity and stability of the past decade in Australia may not last forever. Brumby's own political career has demonstrated that successful Australian politicians should always expect the unexpected.