Now the Rudd Government is history, the campaign is history, the federal election itself is history, and we have a Gillard Labor Government at the helm, assisted by the Greens and independents Andrew Wilkie, Tony Windsor, and Rob Oakeshott. If that wasn’t strange enough, the former Prime Minister has returned as a frontline member of Cabinet as Foreign Minister; one pictures him staggering zombie-like into the room with that Milky Bar grin, daggers jutting haphazardly from his back. We’re a long way from Kansas now. One supposes, given the unpredictability of recent events, that it would not be completely inconceivable for Kevin Rudd to emerge as Prime Minister again in some crazy election campaign in the future.

There is little doubt that Rudd is the best person for the job in Foreign Affairs and that under normal conditions, he would be a big plus for the government. Stephen Smith has run a tight ship but has not really shone either during his time in the role, particularly given that he was always operating in Rudd’s shadow. Suggestions from the Opposition and indeed from Professor Hugh White that the former Prime Minister damaged Australia’s relationships with some of its partners during his time in office are exaggerated. As it stands however, given the circumstances, there are clearly going to be some outstanding personal issues that Federal Labor will need to confront in Cabinet in order to govern effectively. An already byzantine situation, given the reliance of Labor on the Greens and the independents for power, will hardly be simplified by the fact that one of the most senior positions in the government is held by someone who was so recently betrayed by the new Prime Minister.

Matters are so delicately poised that a by-election in practically any seat but the most safest of seats could result in a change of government. I’m not too sure about the stability bit, but this election has certainly delivered political intrigue to the nation – in spades.

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Federal Labor has just shot itself in the foot in a dramatic way; one recalls the damage ultimately done to the party by the Latham challenge. I’m not sure what sort of risk assessment was conducted by the folks pulling the strings here. If Rudd somehow clings to power, against all odds, he will be critically diminished. The Opposition will be able to pick at the bones of Rudd’s credibility all the way up until the impending election. If Gillard wins, she will have a lot of explaining to do, and not a lot of time to do it in. An election may be called within days so that Gillard can establish a mandate from the people, nullifying the Opposition’s likely line of attack. What is she going to do differently – what is she offering that is really any different? If she is going to do a number of things differently to Rudd in a policy sense, how can the people trust what Federal Labor say anymore, given that just days and weeks ago she was talking up her leader’s credentials and direction? We have no idea about what Gillard’s personal views are on the RSPT, climate change, or any number of other issues. Presumably, at least in part, her personal views may be deemed irrelevant. The so-called faceless men may well decide what her views will be.

Don’t get me wrong, I think Julia Gillard will make a great Prime Minister – one day. But that day is not today, and I still don’t think this is the right time or the right path, for her, or her party. If the putsch succeeds, it will have been a rise to the top characterised by cowardice and panic, driven by people who care more about polls and the state of the spin cycle than just about anything else. Of course the alternative, now that the putsch has been rammed maniacally into motion, may be even worse.

Happy unbirthday, Tony Abbott!

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While I agree with Mark at Larvatus Prodeo and Possum when they suggest that the Lindsay polling results were irrevocably contaminated by the weekend state by-election in the seat of Penrith, I feel its too simplistic to dismiss the poll entirely. Federal Labor is, make no mistake, on the nose with Howard’s battlers at the moment. Tony Abbott’s straight-talking approach intrinsically appeals to that peculiar strata of the population who thought they saw someone fresh with a dab of economic blue-blood in Kevin Rudd in 2007, and switched their vote from the Coalition to Labor. Abbott is seen to be a man’s man in a way that neither Brendan Nelson nor Malcolm Turnbull was, and Rudd, at least to many, has revealed himself to be a bureaucratic ditherer who does not speak their language.

There are no simple answers to this problem; there is little doubt that Federal Labor’s pollsters and advisors are burning the midnight oil trying to find it. The Prime Minister needs to pay more attention to people in seats like Lindsay and endeavour to do a better job of explaining the achievements of his government to them, and why they should vote for him again.

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While there is plenty of juicy material to draw on when it comes to negative lines of attack on the Opposition Leader, it would be a mistake for the government to rely exclusively on Tony Abbott’s failings for political sustenance. If federal politics turns into a gigantic mud-slinging match, the government stands to lose more from the exercise than the Opposition. Whomever holds government is by association responsible for the general tenor of debate. If things turn really ugly between Kevin Rudd and Tony Abbott, it will be Kevin Rudd who will be ultimately held responsible for the poisonous state of federal politics, not the Opposition Leader.

As I see it, there are a few crucial positive points that Federal Labor needs to address in order to reclaim its ascendancy over the Opposition:

1) Mapping out a credible path on climate change

The government needs to outline a more thorough roadmap towards the implementation of its emissions trading scheme – or in the very least, a credible roadmap on climate change. The current policy – to shelve the proposed scheme until 2013 – is, by itself, a very weak platform to stand on. There has been some suggestion that Federal Labor has dropped the scheme as a kind of fig leaf to Australia’s centre-right base – but in truth, dropping the scheme has only damaged the government’s record and won it no new support.

2) Defusing asylum seeker issues whilst retaining a humanistic approach

The current situation, with boats arriving every other day, is simply not politically sustainable, but nor is the government’s absurd, ad hoc policy of temporarily freezing claims for asylum by Sri Lankans and Afghans. A new strategy is required that mixes fairness with firmness, and is designed to shape the volume of arrivals in tune with the number of asylum claims that Australia can be readily expected to process annually.

3) Finding common ground on the Resource Super Profits Tax

Federal Labor can not wage an election campaign while the mining industry is filling commercial television ad breaks with deceptive, one-sided advertising. Fighting ads with ads is counterproductive and won’t work, particularly given the government’s past angelic stance on government advertising. The only realistic option is for Labor to reach out to the mining industry through its industry contacts and seek to broker a compromise deal that retains the core income-generating potential of the RSPT whilst offering some further reasonable concessions to industry.

4) Reclaiming the government’s record

One of the biggest problems the government has is that many of its achievements are either “works in progress” due to their considerable scope and cost, or are somewhat intangible, such as its performance during the worst of the GFC and its more symbolic achievements. The government’s leadership team needs to make a more conscious effort to defend its record, and explain to the public what it is achieved, and why certain significant items it has promised have not been completely delivered (e.g. the National Broadband Network, the CPRS).

In short, it needs to publish a kind of scorecard which lays bare the government’s record and explains why certain promises have not been delivered on. In numerous instances where promises made have been broken, there are reasonable, rational reasons why that the public need to understand better.

5) Selling health reform

It really is crucial for the fate of its proposed health reform package that Federal Labor reclaims its record. At the moment, the public generally does not feel as though it can trust the Rudd Government to embark on such a costly, complex, and ambitious program of reform, when several of the large policy promises previously made have not been delivered on, three years on. The spectre of the home insulation scheme also still looms large on the national consciousness, despite the fact that culpability for the more disastrous repercussions of the scheme’s introduction does not realistically rest with the government.

Presently, the public does not really understand all that well what the government’s health reform package is all about, because it is quite a complex, multifaceted package. There is no simple message, because while the Federal Government would take control of majority funding of the public hospital system under the proposed reforms, there is still a 60:40 funding split between the federal and state governments. It is difficult to credibly argue that this set of reforms will “end the blame game” once and for all, but it certainly does appear that it may be a step in the right direction.

In short, I don’t think the Rudd Government can hope to outgun the Opposition in terms of negative political warfare, despite the rich vein of material Tony Abbott has provided it since he became Opposition Leader. To win, Federal Labor needs to retain its essential positivist voice, and demonstrate that it has both a plan for the next three years and the ability to deliver on its plan.

A strategy that centres upon the exaggerated and prolonged slagging of Tony Abbott is a strategy that only hacks the government a path towards political ruin.

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The Prime Minister seems determined to win the day on health reform, and is prepared to continue upping the ante with more funding and incentives until he gets it, whilst refusing to fundamentally alter the underlying structure of the deal. Whether the Federal Government’s approach in a policy sense is correct seems, sadly, to have degenerated into a second order issue, at least when compared to the political shit fight for ownership over health reform.

This puts Premier Brumby in an invidious position, given the staunchness and nature of his opposition thus far. Brumby has already proposed an alternative plan (e.g. a 50/50 funding split without the 30% loss of GST implied by the Rudd/Roxon plan) that he holds to be a considerably better agreement for all parties. But as the offer on the table from Canberra gets bigger and more attractive, the pressure on the Victorian Premier to bite the bullet increases. The overwhelming majority of the shot in this war is in the Federal Government’s locker. The fraternal politics of the situation for the Labor Party are diabolical. No Labor Premier would want to be remembered as the person responsible for critically undermining a Federal Labor Government about to wage its first election campaign after over a decade of conservative hegemony. Sooner or later, the Victorian Premier will be coerced into caving in by the sheer force of the taxpayer dime on offer, and the broader ramifications of not signing up.

In the next couple of weeks, Brumby is going to have to find a way to be a good little Labor Premier and acquiesce, whilst at least appearing to have won some concessions from those bovver boys and bovver girls from the nation’s capital.

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What a difference a week makes. This week, the Rudd Government has come out playing ball in election mode, announcing major initiatives in education and health. It is looking like Labor’s health reform plan will form the cornerstone of its re-election campaign. Despite some general public reservations about whether this plan was a process that should have already been well underway, people know that big changes need to be made to the way in which health services are provided in this country. When push comes to shove, health as an issue trumps most other issues out there, and the government’s plan is going to prove difficult to counter; unless, of course, the states and territories don’t play nice.

The timing of Tony Abbott’s barmy disappearance into Central Australia could not really have been worse. I’m not sure if his trip was planned significantly in advance or not, but it should have been gently postponed given the political developments of last week. In his absence, the government has had a free-hit, launching policies and looking positive, while Abbott scratches about in the outback, looking unkempt and managing to make an arse of himself by getting lost. His “oppose everything” schtick is starting to wear a bit thin, especially when it is phoned in from no-man’s land and he is offering no serious policy alternative.

I don’t doubt that the Opposition Leader could learn a lot from engaging more closely with Aboriginal communities, but it was very, very questionable politics to do so while he had the government looking like it might collapse on the canvas after a tough week. Federal Labor has now regained control of the news cycle, and I would not be surprised if the polls in the next couple of weeks reflect that.

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As has been previously observed:

It’s been suggested Kevin Rudd would not utter the phrase ”$300 billion” for fear his words will be used in coalition advertisements during the next election campaign.

…

Mr Rudd said debt would peak at “around about 200, our gross debt at about 300” in 2013-14.

Asked to explain 200 or 300 of what, Mr Rudd responded: “These are billion figures.”

The genius (whoever they are) in Federal Labor’s leadership team who seriously believed that the government could get away with its senior members not saying the word “billion” for the next 18 months or so must be living on Planet Wacky. It’s a little disturbing that this wacky idea was even successfully sold to the men who are overseeing the nation’s response to the financial crisis, and that they ran with the “billion ban” for a day or two. The Coalition would be nuts not to make fun of the Prime Minister’s use of “200″ and “300″ in their election campaign next year.

Madness.

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For the benefit of those who haven’t splashed out on the magazine, I am going to try and offer a hopefully more level-headed summary over the fold.

If I was going to try and distill the key message in Rudd’s essay down to a single argument, it would be that the global financial crisis has delivered the tangible basis necessary for social democrats to push their natural agenda. Kim Carr was unhelpfully exaggerating when he suggested on radio today that “no one’s job is safe”, but the emotion of the comment sits smugly alongside the current mood of the nation. Every day seems to bring some new economic bad news, some new unfortunate turn of events that will result in financial trauma for some. If the public of Australia had every reason to think during the Howard boom years that there is no reason why the good times could not last forever, the last six months have surely smashed that expectation completely.

In his essay, Rudd describes the current crisis as (p.22):

… the culmination of a 30-year domination of economic policy by a free-market ideology that has been variously called neo-liberalism, economic liberalism, economic fundamentalism, Thatcherism or the Washington Consensus.

This assertion seems like a bit of a distortion; I think it’s fair to say that the neo-liberal consensus created the conditions necessary for the current crisis to eventuate, but that would be the extent of it. Rudd goes on to highlight a more tangible manifestation of this (p.23):

In the United States, the pursuit of financial deregulation crossed the Rubicon with the repeal of the Glass-Steagall Act, which had been established in the wake of the Great Depression. In the heady bubble years of the 1920s, American commercial banks, whose traditional function was simply to take deposits and make loans, plunged into the roaring bull market, trading on their own account, underwriting new stock issues and participating in reckless speculation. When the stock-market bubble burst in 1929, it took commercial banks with it, causing a devastating chain reaction which affected the entire economy for a decade.

…

After a $300 million lobbying effort by the financial-services industry, Glass-Steagall was effectively repealed in 1999, removing the prohibition on commercial banks owning investment banks. The door was now open for the creation of huge financial-services conglomerates.

Someone who has maintained a closer watch on the financial services industry than I have over the last few decades would be probably be in a better position to judge if this event really was the straw that broke the camel’s back. This nevertheless seems an incisive point. If the global economy is underpinned by the smooth functioning of banking systems in the world’s financial centres, is it really a good thing that they have been given a license to gamble the prosperity of the world on the rise and fall of global financial markets? Is it a good thing that banks are permitted to trade widely in financial instruments that are based on ill-offered loans? Does anybody seriously believe that these are not, given recent months, rhetorical questions only?

There are a few points in the essay in which Rudd does get a little bit political. When singing the praises of the “social democratic project”, the Prime Minister is careful to highlight the Hawke and Keating (but not Whitlam) Governments as prime examples of social democracy in sublime flight (p.25). Many of us would of course recall things seeming a little less than sublime at the time. After pointing out, correctly, that neoliberals have had their beliefs tied in knots by this latest crisis (e.g. particularly with respect to part-nationalisations, pp.25-26), Rudd makes an attempt at tying the Liberal Party in closely with the neoliberal school of thought (pp.28-29). It is a bit of a half-hearted attempt, to be honest; of the nine demarcated passages in the essay, just one makes any substantive reference to Labor’s direct political enemy. This passage also represents the weakest part of the essay, and somewhat over-emphasises the extent that our local Coalition schmucks actually endorse the neoliberal agenda in the American sense. No neoliberal government worth its stripes would have presided over the massive welfare churn machine that the Howard Government presided over during its decade in office.

The essay concludes with Rudd lauding the role of government (p.29):

How could it possibly now be argued that the minimalist state of which the neo-liberals have dreamt could somehow be of sufficient potency to respond to the maximalist challenge we have been left in the wake of this most spectacular failure of the entire neo-liberal orthodoxy? Government is not the intrinsic evil that neo-liberals have argued it is. Government, properly constituted and properly directed, is for the common good, embracing both individual freedom and fairness, a project designed for the many, not just the few.

Fine words – but words that now need to be transmuted into action. Governments like those lead by Barack Obama in the United States and Kevin Rudd locally need to deliver on the promise they are offering. Here’s hoping that the next significant step in this new “social-democratic project” that Rudd spruiks in his essay is constituted of something more than mere words.

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Those lovers of ideology over at The Australian have already produced not one but three opinion-based pieces on Rudd’s essay, together with a video analysis from Dennis Shanahan. Both Paul Kelly and Lenore Taylor see the essay as an opportunity for a new era of distinction between Australia’s major parties to begin, with Rudd’s Federal Labor visibly leaning a little towards socialism, and Turnbull’s Opposition staunchly defending the free market liberal agenda. There is more than a hint of the suggestion in both pieces of an unspoken truth; these guys really want Turnbull back in the game, and Rudd’s Labor tarred with the old-school, old Labor brush. Of course, they don’t really give away whether or not they have actually seen the complete essay.

As someone with a fairly inherent social democratic bent, I don’t really see a problem if the Prime Minister makes an attempt in the essay to use the fallout of the global financial crisis to push for a more balanced economic agenda. In an time when the leader of the free world is engaging in large-scale nationalisation programs and propping up insolvent giants, surely only the most deluded observer could believe that something was not a bit rotten in the state of the global economy’s regulatory regimes. At least for me, the need for greater balance in the nation’s economic affairs has been apparent for some time; it’s just plain common sense given the problems we know the world is facing today – an absurd patchwork of rich and poor, and a subliminal devaluation of the common good. To a large extent, Rudd may be seen as getting on the bus far too late, if he really does believe that it is only the global financial crisis that has engendered a need for significant systemic change. I will however reserve judgement on the essay until it is published in full.

The magazine will be available in newsagents this Wednesday. You can read the first 1500 words of the essay online here.

ELSEWHERE: Mark has more at Larvatus Prodeo, as does Jason Soon at Catallaxy.

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While it is true that Rudd has travelled more than any other Prime Minister in his first year, it’s also pretty fair to say that the crises facing the world today have demanded a significant increase in the level of interaction and dialogue between the world’s leaders. Relationships forged in face-to-face discussions are inevitably going to be stronger and more valuable than relationships based on the phone or online – and you just can’t phone in a formal meeting with a head of state, I’m sorry to say. The message that would send to peers would be that the Prime Minister does not value them personally or the people they represent.

Another common criticism stems from the so-called diplomatic ambitions of the Prime Minister. Bernard Keane from Crikey offered up just such a jibe on Today Tonight, namely that Rudd’s grand diplomatic designs on the world stage are partly to blame for the Prime Minister’s travel bill. If by this he means that the Prime Minister wants to take a proactive hand in shaping the foreign policy direction of the nation, I don’t see this as a problem. Keane and others may have been desensitised during the Howard years to the needs of the modern world of foreign policy, but Australia now has someone leading the country who has the calibre to reputably take the nation’s concerns to the bargaining tables of the world. It would quite simply be foolhardy for Rudd’s talents in this area to be wasted by keeping him at home, sad, myopic and isolated like John Howard’s Australia always was.

In short, these criticisms form a particularly thin broth; one-part rank political opportunism to two-parts tall-poppy syndrome. The sooner the nation moves on and starts arguing about political issues that actually matter, the better for all of us.

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