Chronologically, here’s my (fairly long, if not actually detailed) take on what when wrong for the Labor Party:
The Global Financial Crisis (GFC) and Australia’s response
Australia was perfectly placed to weather the storm of the GFC. Thanks partly to the now-shown-to-be-enlightened banking policies of Paul Keating and partly to the swift and innovative actions of the RBA in the crux of the crisis, Australia’s big four banks were not overly exposed and the fall of some minor banks did not seriously threaten the Australian financial system. The economic downturn that was triggered by the crisis took some time in coming for every country and Australia was granted an extra delay in its attachment to China. As a result, the Australian authorities knew well in advance what was coming and even, roughly, how bad it was going to be. Furthermore, both fiscal and monetary policy were perfectly positioned to act, and act dramatically, to lessen the pain: Interest rates were already quite high (to avoid inflation in the pre-crisis boom) so there was plenty of room to lower them and, thanks to Australia’s booming mining exports, the government was in surplus with little-to-no debt so there was plenty of capacity to temporarily increase debt-funded government spending. The RBA performed their role admirably, cutting interest rates early, hard and deep. The Federal government also deployed a near-perfect fiscal stimulus, with large cash hand-outs to almost every household (with a focus on the low-income households with a higher marginal propensity to consume and a lower propensity to buy imports) and the acceleration of longer-term spending.
The result was only a single quarter of economic contraction in Australia and therefore the avoidance of a “technical” recession (typically, but not formally, defined as two consecutive quarters of negative growth). Ironically, this spectacular feat made the authorities in general, and the government in particular, into victims of their own success. Since they never saw a real downturn in the economy, the Australian people questioned the need for all the stimulus in the first place. The Coalition opposition, cynically in my opinion, jumped on this and told tall tales of looming mountains of government debt, all since shown to be wildly overblown scare mongering.
Home insulation and libraries
Some of spending of the stimulus money was poorly managed. For example, new money for schools to construct new buildings was not permitted to go towards any building on a school’s long-term plan. If a building isn’t already on the school’s long-term plan, why do they need it? But the big kick in the teeth for Labor, and more particularly, Rudd, came in the handling of problems that came from the subsidies for home insulation. The surge in demand for insulation lead to new installation companies emerging, not all of them run by people with years of experience. Some of the roof insulation, which included a thin metal layer, was occasionally accidentally stapled to electrical wires. Some electrocutions occurred. That was a tragedy and should have been treated as such. Rudd ought to have deplored the dodgy operators and come out with a crack-down on safety standards in the construction industry. Instead, it appears very much as though there was an attempt to sweep it under the carpet.
Climate Change, the ETS and Copenhagen
One of the major 2007-election policies of the Labor party was legislation to fight climate change. The Rudd government signed the Kyoto protocol very quickly once it came to power. An Emission Trading Scheme (ETS) was devised and passed in the House of Representatives, but rejected in the Coalition-controlled Senate. In an attempt to get it through, Rudd watered down the ETS, much to the frustration of the Greens and green-leaning supporters of the Labor Party. It was still not successful.
The Coalition, by this point, was in complete disarray. It’s then-overall leader, Malcom Turnbull, fully supported the ETS and believed the matter of climate change to be above party politics, but the leader of the Coalition in the Senate, Nick Minchin, is a climate change skeptic (to say the least). This turned into a leadership contest and although he won an initial spill, Turnbull was defeated on the 1st of December, 2009 and replaced with Tony Abbott, nicknamed “the mad monk” for his socially conservative views and his earlier start in training to the Catholic priesthood.
The anti-ETS side of the Coalition thus won a debate on whether Australia should pass the ETS before the Copenhagen conference on climate change — we would wait and, it was felt, only pass a law to the extent that we were obliged to under any agreement reached.
As it happens, Copenhagen was a debacle, with China and, to a lesser extent, India sabotaging the negotiations. With the momentum lost, the Rudd government put climate change into the too-hard basket.
Many (many!) people in the green-leaning side of the Labor party had thought that Rudd should use the ETS as a double dissolution trigger prior to the Copenhagen summit, with the idea being that a) public support at the time was in favour of action against climate change; and b) with the Coalition in such disarray, a Labor victory would be (almost) assured. For my own part, I believe that Rudd was genuinely scared of running a campaign entirely on this one issue and had hoped to use Copenhagen as the definitive, externally-supplied, moral argument.
Tony Abbot’s budgie smugglers and Kevin Rudd’s desperate attempts to appear true blue
Not many people I know agree with me on this one, but I believe that this event is when many Australian people stopped just being queasy with Rudd and started actually liking Abbott. Tony Abbott, you see, at the age of 53, is a sports nut. He is incredibly fit. He does Ironman triathlons. He’s a surf lifesaver, which in Australia is only two steps to the side of sainthood. We love our lifesavers in Australia; they’re all volunteers, perform an essential role and are very, very, very much part of our collective self-image.
Nevertheless, Australia also has a strong spirit of being wary of politicians that try to grandstand on a national icon for their own purposes. The former leader of the NSW Liberal party, Peter Debnam, was ridiculed for donning a pair of budgie smugglers (hey, we used to call them DTs — d**k togs — but that wasn’t allowed by the PC brigade) and swanning around for a “completely casual, not at all staged” photograph or 20 as he ran up and down on the beach. Here’s Tony Wright describing the affair:
It was disastrous; his appearance was roundly declared “disturbing” and poor Debnam found himself hobbled with the moniker Deadman. His obsession with budgie smugglers prompted Deputy Premier John Watkins to accuse the unfortunate fellow of offending common decency.
So when Tony Abbott was photographed emerging from the water in his own DTs, Kevin Rudd couldn’t help making a few snide little comments:
“You know something. If there was a referendum tomorrow between budgie smugglers and boardies, I think I’d be voting for boardies,” Mr Rudd said on Thursday. “I think there are certain things the Australian people should be protected from and one of those things is national political leaders so attired. “What is it about the Libs and swimming gear, it seem to be a bit of a pattern,” he said, referring to former NSW Liberal leader Peter Debnam before his defeat in the 2007 state election.
This backfired massively against Rudd, for reasons that seem obvious to me looking back, but apparently weren’t to him at the time. He was the Prime Minister. To stoop to this sort of criticism is below the dignity of the station. Australian’s will accept it if it’s done well (i.e. it’s funny), but when it’s just a cheap shot, we see it for what it is. And since the subject of the cheap shot was actually (and not cynically) doing something that we, as a people, truly admire, then we were always going to side with the dude with his wang on display. It’s just the way we are. This whole thing made Rudd look petty and out of touch.
Actually, I think this episode was just emblematic for Rudd’s rather pathetic attempts to present a persona that the “average Australian” could relate to. He never seemed more out of touch, more awkward, than when he was exaggerating his accent, and trying to shoe-horn a string of Australianisms into his speeches. I’m hardly the most Australian of Australians, but if I could tell he was faking it so badly, you may assured that everyone else did too. In a way, I think this was his greatest failing.
The mining tax
This was the final nail in Rudd’s political coffin. In May this year, Kevin Rudd announced the Resource Super Profits Tax, based on one of the recommendations from the Henry Review. The particular details of the proposal aren’t important here (although, for the record, I support the mechanism in general, but I’m not tied to any particular headline tax rate and I think the money should not go into general government revenue but instead into a sovereign wealth fund). Instead, what I want to focus on is the spectacularly ham-fisted way that the proposal was introduced.
It was atrociously sold to the Australian public. The scheme, as originally envisaged, would amount to a subsidy relative to the current framework for small mining companies. Why didn’t Rudd have 50 CEOs standing beside him when he made the announcement? The mining companies claimed, falsely (although that is counterintuitive), that it would lead to job losses in the mining industry and were never successfully rebutted in the public sphere.
Instead of recognising the errors made in introducing the proposal and attempting to correct them, Rudd doubled-down. In response to the (perfectly predictable) advertising campaign by the mining companies against the proposal, he broke one of his own campaign pledges and started spending government money to run advertisements in favour of it. Instead of speaking about the essential role that mining plays in the Australian economy and how the proposal would actually increase the mining output of the country, he derided mining CEOs as rich fat cats that need to be taxed down to the same level as everybody else. That is old, old, old school Labor and Australia has moved beyond that sort of thinking now, although apparently not all politicians seem to have realised it.
Rhetorically, the mining companies and the Coalition (that naturally sided with them) won easily, and the Labor Party knew it. There were negotiations between the government and the mining companies on a compromise, but they were happening very, very quietly behind closed doors while the shouting went on outside.
The removal of Rudd and the rise of Gillard
The Australian Labor Party has long had some brutal factional politics happening behind (and sometimes not-so-behind) the scenes. Throughout the knock-down fight with the mining companies, Australia’s then-Deputy Prime Minister, Julia Gillard, repeatedly stated that she was not interested in challenging Kevin Rudd for leadership of the Labor Party (and hence the Prime Ministership of Australia). However, in late June 2010, the internal factions swung massively against Rudd and he was replaced by Gillard in a move that was whiplash-inducingly fast.
Gillard immediately ceased the government’s advertising campaign and promptly announced a compromise agreement with the mining companies, which granted her something of a honeymoon period in an electorate that was highly skeptical of the way that Rudd was deposed. Rudd’s supporters in the Labor party felt particularly gypped by the action, and view Gillard as something of a careerist rather than an idealist.
For my own part, I am led to believe that the compromise with the mining companies was settled in the week prior to the leadership challenge and the Labor party power brokers made a decision along the lines of “Rudd is toxic. If he announces the compromise, it’ll look like a back down. He will absolutely have to go before the next election and Gillard will absolutely be his replacement. Far better to have Gillard announce the compromise so as to look like she’s magnanimous, give her a honeymoon period and then have the fastest possible election to ride through on that wave.”
The election in general
Speaking purely tactically, I think that Labor made the right decision. Whether he was any good as a technocrat or not, Rudd was politically toxic as the face of the party. There was a genuine bump to Labor from the compromise and a rapid-fire election was the morally correct thing to do following such a sudden leadership change. Had that been all there was to it, I believe that Labor would have narrowly won.
Many people were angry that it was such a dull election, with no new policies being advocated. I think that is silly. The policies were clear: Labor was for the compromise mining tax, the NBN and (albeit with the stupid citizen’s committee thing) eventually the ETS. The Coalition was against all three. The Greens were supported stronger, more forceful versions of all three. That was the election. All three are major policy decisions.
In the second week of the campaign, somebody from within the Labor cabinet (i.e. not just a Labor MP, but a cabinet member) leaked some very damaging information about Gillard, showing her to have taken positions contrary to the ideals of most Labor party supporters. To my mind they just reinforced my belief that Gillard believes far more in real politik than do most people, but I very much appreciate the harm they did to her image. But there’s an obvious question here: Why? Why would a Labor Party insider do such a thing? To my mind, there are only two options:
- They were so offended by the removal of Rudd and his replacement by Gillard that they didn’t care what effect the leaks would have on the election so long as Gillard was hurt. Even to a cynic like me, this sounds implausible.
- They were confident that Labor would win the election and wanted to rough Gillard up a bit so that in the post-election aftermath she’d be forced to rely on the pro-Rudd factions instead of sidelining them (as would be traditional).
If it was the latter, as I believe, the person made a terrible error and dramatically underestimated the harm the leaks would do, not just to Gillard, but to the Labor party as a whole. Still, the effect of the leaks on the polls was rather short-lived, and it appeared in the last week of the campaign that Labor were back in the lead, albeit barely. I suspect that had the campaign gone on for another week or two, the effect of the leaks would have faded further and Labor would have (just barely) fallen over the line.
The state Labor Parties
Finally, we come to the topic du jour in the Labor Party soul-searching: it looks very much as though, unlike in previous federal elections, people’s opinions of state labor parties had a strong influence in how they voted for the national labor party. Simon Jackman, an Australian professor of Political Science at Stanford University, has produced this breakdown of seat-specific swings, grouped by state. See how the swings really do seem to group together by state? Labor suffered large swings against them in NSW and QLD, a moderate swing against them in WA, and moderate swings towards them in VIC, SA and TAS.
Possum has taken this further, pointing out that the state-specific swing correlates very nicely with people’s views of the Labor party in that state. Here’s his diagram:
He’s put the axes around the wrong way for my liking, but it doesn’t matter. The horizontal axis shows the swing toward or away from the Labor Party in the federal election, while the vertical axis shows the two-party-preferred margin enjoyed by the state Labor parties in their respective states. As you might expect, Anna Bligh and Kristina Keneally (the premiers of Queensland and New South Wales respectively) are not particularly popular in the broader Labor Party right now, and are mounting a vigorous internal defence of their political performances.
So, that’s where we are. There was still quite a significant aversion to the Coalition in the electorate (the memories of John Howard are still fresh), so it’s entirely fair to say that Labor have lost their position rather than the Coalition having won the improvement in theirs. Have a look at the total vote counts by party from the Australian Electoral Commission. Here’s how the swings in first-preferences look:
- Labor : -4.9%
- Coalition : +0.6% (a rough average of the Liberals, Nationals and LibNabs in Qld)
- Greens : +3.6%
- Informal (i.e. deliberately invalid) : +1.6%
That tells it all, really. The Coalition was no more appealing to the electorate this time than they were in 2007 (that they picked up seats came via lower preferences). Labor lost a bunch of supporters. Most of them went to the Greens, no doubt upset by the perceived failures on the ETS and the mining tax, but a fair whack of people were just sick of politics altogether and deliberately spoiled their vote.