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.

Later, when Rudd became leader, he branded himself an “economic conservative”, a clever way of presenting himself as a safe pair of hands on the economy. Soon afterwards, Swan and Julia Gillard would also dub themselves with the economic conservative tag, in an effort to neutralise the issue of the economy. Labor had learned from its 2004 mistake, and in doing so blunted the Howard government’s biggest electoral weapon.

Second, Labor deliberately avoided adopting policy stances which would preach to the converted, rather than appeal to swinging voters. The forests policy and Medicare Gold, for instance, were unsuccessful in appealing to undecided voters in 2004. As previously mentioned, the economy instead won out.

This can be contrasted with Kevin Rudd’s approach, which involved cleverly positioning Labor in the centre so that voters that lie somewhere between the two major parties swung towards Labor. Rudd picked his fights: instead of fighting with Howard on the Iraq War or the Indigenous intervention, as many in his party would have preferred, he ensured that industrial relations and climate change were the biggest policy area differences between the two sides. Since WorkChoices was so unpopular and climate change had gained increased importance, these were always going to be Labor winners.

Also important is the interest rates factor. In 2004, this issue was a major factor in favour of the Coalition. By 2007, after several subsequent interest rate rises, the electorate finally understood that interest rates have little to do with the government of the day. While surveys revealed that most voters did not blame the Howard government for the interest rate increases, the issue was an embarrassing loss of credibility for the government. Furthermore, many borrowers may have felt deceived by the government, and this would have contributed to the prevalent “it’s time” mood in the electorate.

Finally, there is an ironic twist involved in the magnitude of Latham’s defeat, particularly the fact that it resulted in control of the Senate being surrendered to the Coalition. It is undisputable that the Coalition could not have passed WorkChoices without its Senate majority.

While in the short term this was a disaster for Labor, it resulted in the party being given an invaluable electoral asset for the next election. As I have already explained, the opportunity was fully exploited by an Opposition desperate to win office after almost 12 years in the political wilderness. Its task would have been made a lot more difficult if the Coalition had not won by the margin it did in 2004.

So while Mark Latham may still be a hated man in the party he used to lead, he may in fact be its unsung hero, even if unintentionally. In the end, there are serious questions to be raised about whether Labor would have won the 2007 election without him.