Latham may have set Labor up for victory

As soon as he lost the 2004 federal election, Mark Latham was maligned by many seeking to re-write history. His enemies within the Labor Party were self-serving and wanted to re-install Kim Beazley as leader. This was also the product of the recriminations which inevitably follow a heavy election defeat. The media also did not want to be associated with a loser, and so turned on Latham after giving his leadership an enduring honeymoon.

As a result, in the aftermath of his leadership, history was re-written, and many forgot about how close the election was looking to be, right until the final week, and how the ALP entered the campaign with a poll lead. Many believed that Labor could and would win. Maxine McKew, now the Member for Bennelong, spoke of the “inevitability” of a Labor victory. But that of course was before Latham’s emphatic loss, which handed the Howard government an historic Senate majority.

What is also forgotten is how Latham conducted himself like a gentleman during his term as Leader, refraining from using course language and other unstatesman-like behaviour that had previously attracted attention. The only exception was that infamous handshake with John Howard in the final week of the campaign.

After the loss, Latham’s public esteem further plummeted after he published The Latham Diaries, a damning critique of his own party and most of his parliamentary colleagues. The final fall from grace was the incident where Latham assaulted a cameraman and subsequently appeared in court to face charges.

So what went wrong for Labor in 2004? It is often correctly pointed out that the Coalition scare campaign on the economy and interest rates was brutally effective, and rescued the then-government from what looked like almost certain defeat.

Latham blamed the loss on party office who, it must be said, did fail to effectively counter the scare campaign. The Coalition’s claims that Labor had a dubious economic record remained unchallenged throughout the campaign, in spite of the crucial economic reforms carried out by the Hawke and Keating governments. Also, the Fraser government’s unimpressive record and inactivity in this area was never raised.

When a Labor ad rebutting the interest rates scare finally emerged, it was probably too late, because the mortgage belt would have made up its mind. Labor Head Office did not perform well enough, and allowed the scare campaign to gain traction.

Naturally, what is less frequently discussed in The Latham’s Diaries are his own mistakes. Although he had quite a few decent economic policies, Latham failed to give them enough attention and focus. While the Coalition was continually talking about the economy, Labor concentrated on social policy. Unsurprisingly, economics came up trumps.

Herein lies one of the great myths of the election campaign. Latham favoured labour market deregulation, tax relief and income splitting. He was also one of the few free-traders in the Labor caucus during the late 1990’s. The only economically suboptimal policy was the plan to abolish AWA’s, however Kevin Rudd continued that policy in 2007 and had electoral success.

While there had not been a scare campaign over Beazley’s economic credentials in 1998 or 2001, one would certainly have been more warranted against the man who at one stage championed protectionism and campaigned against the GST as leader for two successive federal elections.

After all the historical revisionism, few would have considered the idea that Latham may have substantially contributed to Labor winning the 2007 election under Kevin Rudd. But when one looks at the facts, there are many ways in which this may have been the case.

First, Labor’s loss under Latham taught Australia’s oldest political party a modern political lesson. That lesson was that in order to get elected federally, it would have to present itself as a credible alternative manager of the economy. The change in Labor tactics was almost immediate, with support for reducing the top marginal rate of tax and frontbenchers such as Wayne Swan challenging the government to drive increases in productivity, after its growth had been slowed down.