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Sunday, June 27, 2010

The Legacy of Rudd Labor – and the challenge confronting Julia Gillard


above: New Australian Prime Minister, Julia Gillard and former PM, Kevin Rudd

Former Australian Prime Minister, Kevin Rudd has been deposed efficiently and suddenly. But now would be an apt time to consider the real legacy of Rudd Labor.  And now it is also a good time to consider the policy challenges facing Australia's Federal Labor government under the leadership of Julia Gillard: Australia's first woman Prime Minister.

by Tristan Ewins

Speculation had raged for weeks, yet still few seemed to have had warning of what was to come. Kevin Rudd – who once had been amongst the most popular Australian Prime Ministers ever – was removed in an internal ‘coup d’etat’: brutally, efficiently, suddenly. The impetus apparently came from the Victorian and New South Wales right-wing factions of the Australian Labor Party.

The Federal Australian Labor government had been taking hard blows in crucial areas for months; and a prolonged character assassination campaign against the Prime Minister was beginning to stick. Faced with a massive and unrelenting campaign by mining companies, and by large sections of the Australian media, Rudd sometimes appeared rattled or angry. Those wanting a pretext upon which to judge the Prime Minister felt the smears against his character were confirmed.

But the events of late June 2010 had been some time in coming.

First there was a public-funded ‘Home Insulation Program’ (HIP): intended to provide stimulus to ward off recession; but also to reduce energy consumption on heating, and thus ameliorate climate change. A creditable idea in its conception, the implementation, however, was poor. Several house fires ensued following the policy’s enactment, and four tradesmen died as a consequence of negligence on the part of the installation companies, and insufficient regulatory oversight. The government was thus discredited in the eyes of many in the electorate. http://www.abc.net.au/news/stories/2010/02/19/2824707.htm

The government also came in for criticism for its failure to enact deep and effective legislation aimed at combating climate change.

Kevin Rudd had laboured to the point of exhaustion at Copenhagen to achieve a solid international position to take on the threat of climate change. He had also reached out to the conservative parties in Australia, but just when a compromise position seemed to have been consolidated the hard right of the Liberal and National parties revolted, with new leader Tony Abbott taking a ‘hard line’ against reform.

Many Australians were confused by the complexity of the proposed Carbon Pollution Reduction Scheme (CPRS) also; and under Abbott the conservatives capitalised upon this confusion. Abbott made gross – but effective - simplifications, playing upon peoples’ fears, labelling the proposed CPRS ‘a great big tax on everything’. http://www.theage.com.au/national/push-comes-to-shove-in-a-cold-climate-20100625-z9t3.html

The Australian Greens meanwhile proposed a simpler (and perhaps more effective) carbon tax; but in what might have been a fateful decision, the author believes Labor strategists concluded such a strategy would be too hard to sell.

Adam Morton, writing in ‘The Age’, observes that it was the right-wing factions of Labor who ultimately pressured Rudd to put-off action on a CPRS “until at least 2013”; and that those who clinically assassinated Rudd’s Prime Ministerial career, had themselves partly to blame for damage to ‘the Labor brand’. This was demonstrated at the time by a significant defection of Labor’s support base to the Greens.
http://www.theage.com.au/national/push-comes-to-shove-in-a-cold-climate-20100625-z9t3.html

The final – and crucial – blow came in the form of Rudd’s confrontation with Australia’s powerful mining giants.

As the author has stated in an earlier post: Rudd’s proposed mining super-profits tax was both fair and sustainable.

I emphasise again, following on from our last post at ‘Left Focus’; economics journalist Tim Colebatch has established that:

“The Bureau of Statistics' recent round-up of industry data for 2008-09 estimates the profit margin in mining that year was 37.1 per cent. That's three times the industry average of 11.2 per cent… They're doing well.” http://www.watoday.com.au/opinion/politics/resource-tax-amounts-to-40-nationalisation-of-the-mines-20100607-xqn0.html

‘Kicking in’ only at profits of 12 per cent or higher, this truly was to be a tax of ‘super-profits’ in a meaningful sense of the word.

But Rudd could not stand against a combination of factors which set a truly dangerous precedent for Australian politics, and the meaningfulness of our democracy.

The mining companies had a potential war chest running into the hundreds of millions of dollars, and were able to saturate much of Australia’s media with a cunning and ingenuous fear campaign. In this they were aided by conservative Opposition leader, Tony Abbott, who parroted the required line on a daily basis as part of some unholy and opportunistic alliance. Abbott tried to have us believe that putting a premium on the minerals that belong to all of us would mean ‘the end’ of the industry and of tens of thousands of jobs. Finally, what must be assumed to be a convergence of interests between the mining companies, the conservatives and sections of the media – manifested in a crude framing of the debate; to discredit the government, and to destroy Rudd.

What this shows quite plainly is that Australian democracy is not so robust as to stand against the power of wealth in some circumstances. So long as wealth is able to dominate the public sphere, and set the terms for debate, democratic institutions and movements ‘do not have a chance’ when it comes to challenging the most powerful vested interests. The interests responsible in this sense for Rudd’s demise will want to obscure this to prevent Australians from drawing these obviously radical conclusions. Instead they will try and ensure ‘history’ is written on their terms: that Rudd’s demise was purely the consequence of flaws in his judgement and character.

That said: while Rudd sometimes disappointed his supporters dreadfully – think, for instance, of his failure to abolish the anti-union ABCC (Australian Building and Construction Commission), and his failure to restore unions rights to pattern bargaining - reflecting upon his legacy it is plain that this was a man with a genuine reform agenda.

While not fully ‘rolling back’ the repugnant industrial relations agenda of the former Howard conservative government, Rudd did enact changes that improved the wages, conditions, job security and rights of a great many Australian workers.

Rudd Labor sought to use the mining super-profits tax as the foundation from which to achieve an increase in employer contributions to worker’s superannuation funds.

Rudd Labor ratified Kyoto, and Rudd worked himself to exhaustion fighting for action on climate change at Copenhagen. He also had the foresight to make a massive public commitment to building a National Broadband Network which would position Australia to grow the knowledge industries which will arise in the coming decades.

Rudd Labor enacted landmark legislation for paid parental leave, made a genuine and heartfelt apology to Indigenous Australia’s ‘stolen generation’, and passed critical reform of pensions: especially in favour of those struggling on the Single Aged Pension. Stimulatory ‘cash payments’ were also targeted to some of Australia’s most disadvantaged and vulnerable.

Critically, Rudd Labor’s counter-cyclical investment and expenditure saved Australia from recession: standing in stark contrast to events elsewhere. For those who reflect upon this experience, the perceived superiority of the conservative parties on economic management should now well and truly have been refuted.

Further: reform of public health – shifting the burden proportionately towards the Federal government – while not sufficiently redressing funding gaps in the here and now – may have set the scene for future reform. By this I infer that if the Federal government is accountable for health, and in contrast with the states has the tax-levers at its disposal to increase funding – this might well place further reform ‘on the agenda’ for the future.

Finally, referring to a reform which had received limited public attention, Rudd stated his pride in lifting organ donation rates: with the consequence of many lives saved. This was of deep personal significance to the former Prime Minister, as he himself has been a recipient of organ donation. http://www.smh.com.au/national/rudd-proud-of-achievements-but-not-of-blubbing-20100624-z0tv.html

In the future; reflecting upon his time as Prime Minister, Kevin Rudd can at least take comfort that his was a genuine and in many ways positive legacy.

Considering the recent state of Rudd Labor, though, the author feels that the former Prime Minister’s position was not beyond being salvaged.

A strategic withdrawal to a better defensive position might have been made in establishing a mining tax regime for which there had already been an Australian precedent. (ie: Petroleum and Gas resource rent) Or perhaps other measures – but not so far as to cut the projected increase in revenue by more than half. This could have been of great benefit in allaying voter’s fears.

And Rudd Labor could have capitalised upon its achievements once a compromise had been consolidated on the mining super-profits tax: with the fear campaign no longer ‘saturating’ the public sphere. As we have seen: there was indeed a significant array of genuine achievements.

But now the deed has been done. The power-brokers obviously believed that the haemorrhaging of Labor’s support base under Rudd was beyond remedy. Rudd was the ‘sacrificial lamb’ for Labor’s apparent ‘fresh start’. And despite the outrage of many, it is an important landmark as Julia Gillard emerges as Australia’s first woman Prime Minister.

Although in the past having proclaimed herself a socialist, and having come from the Labor Party’s left-wing, Gillard has not refrained from confronting unions. This has occurred regularly in her past capacity as Minister for Industrial Relations and Education. There are many who question her ‘left credentials’: but there are some also for whom any such doubts would actually be ‘a plus’.

Importantly, a Age/Nielson poll showed a surge of support for Gillard. ‘The Age’ has reported that:

"The government's two-party vote has leapt 8 points in three weeks, taking it to a 55-45 per cent lead over the opposition… On these figures Labor would sweep to power with almost two-thirds of the seats in the House of Representatives."  http://www.theage.com.au/national/gillard-regains-a-winning-edge-20100625-z9sv.html

Many are responding to Gillard’s message that while the government had ‘lost its way’ she intends to get it ‘back on track’. Regardless of whether or not public disillusionment with Labor has been justified, Gillard is responding here to the sentiment in the electorate: and her message is finding resonance with voters. But importantly: in order to consolidate those supporters ‘returning home’ after defecting to the Greens, Gillard will need to construct robust policies on the environment.

While some focus on Gillard’s ‘shattering of the glass ceiling’, and her origins in the ALP Left, others will be wondering what the consequences of recent events will have for policy. It is the substance of policy implemented which, after all, matters most.

Public education and health seem to be passions for Gillard. But deep structural reform here would require tax reform in order to provide funding.

Would Gillard consider an increase in progressive taxation for her first term – of between 1% and 1.5% of GDP – focusing on the top 20% income demographic? Would she actively promote that position at the next ALP National Conference, and foreshadow this in the run-up to the election to secure a mandate?

Such modest reform – providing an annual pool of about $15-$20 billion from an economy of now at over $1 trillion annual value – could make a genuine and desperately-needed improvement to services in Aged Care, Mental Health, welfare and public education. Given our ageing population, it is also structural fiscal reform that cannot be put off forever without dire consequences!

And in the same spirit, would Gillard introduce a National Disability Insurance Scheme?

How these policy issues are resolved is ultimately what is most important: even more important than the individual who occupies the office of Prime Minister.

While recognising the Rudd legacy, we need now to look to the future and work for a Gillard Labor victory; hopefully with the critical and reasonably conditional support of the Greens in the Senate.

But this needs to take place in the context of building a base of support for reform of tax and social wage provision – and other critical areas such as the environment and industrial relations - under Gillard Labor.

The task for progressives is to make our support – and with this support for such a reform agenda – indispensable for Labor – but in a context within which Labor is still electable.

Despite recent setbacks, we should not resign ourselves to the notion that ‘this is the end’ for reformist Labor governments.

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