In my post earlier this week, Labor drowned in the loon pond, I argued that the following is the salient timeline of self-destruction for the current Labor government:
- Kevin Rudd is elected and flies high on a platform of fiscal conservatism and reform aimed at climate change, the NBN and winding back Work Choices.
- Rudd manages the GFC well in the moment but overdoes the bailouts for banks and households (and property developers had he been allowed). He remains popular.
- Rudd allows business to water down CPRS then he back flips completely on climate change reform and his polls fall heavily.
- Rudd proves a poor communicator as his “moral challenge of a generation” fades into politicking.
- Rudd introduces RSPT overly quickly, his polls fall further and before he finds a solution is dumped by a party spooked by a mining PR campaign.
- Gillard dumps RSPT in favour of the mining-authored MRRT.
- Gillard is re-elected in a minority government with a much reduced majority (obviously).
- Gillard introduces carbon pricing reform process and polls fall further again. She also introduces reregulation of the labour market (which I disagree with on many points).
- Carbon pricing is hysterically attacked by Opposition (labour market is barely mentioned and reform hardly resisted).
- Carbon pricing proves benign. Gillard’s polls improve as rate cuts flow.
- Gillard proves a poorer communicator even than Rudd and she struggles to regain momentum as her leadership is undermined by the former leader.
- Gillard offers licorice all sorts policies in early election (including sops for unions).
An industrious reader encouraged me to go back and look again at the polls when Kevin Rudd was deposed in Julia Gillard’s putsch. So, here they are from Newspoll:
The data is an eye-opener in retrospect is it not?
It’s sobering to recall that the Rudd government fell behind the Coalition in the polls only once during the RSPT debate. Compare that with the subsequent Gillard government, which managed to flop over the line with a minority government and has badly lagged the Opposition ever since. One can only wonder how Labor strategists sleep at night knowing that they deposed a leader on flimsy polling grounds only to entrench a far worse opinion of the party.
Second, it is pretty obvious that Rudd was rebounding from the RSPT debacle when he was deposed. The April through June 2010 series of two party preferred polls are 49, 50, 51, 52 and rather suggest that Rudd was winning the debate. Despite the extraordinary bias of the Australian business press against the policy, his polling had returned to pre-RSPT levels and was trending upwards.
Third, it is remarkable how this fact has been whitewashed from history (including by me in the above list). The propaganda has been so overwhelming surrounding the tax and the coup that we have all forgotten that Rudd was actually strengthening his electoral position when he was tossed out.
Thus, in the cold hard light of history, Rudd’s overthrow should be seen as an act of political bastardry not electoral necessity.
If that’s the case then it behooves us to contemplate the counter factual case of Rudd persisting in the job. Treasury estimates comparing RSPT and MRRT revenues into the future have shown a difference between the two taxes of as much as $100 billion dollars over ten years. There are higher estimates around as well. Is that the price we paid for a regime change that we neither wanted nor needed?
Probably not. Rudd was also negotiating with Andrew Forrest at the time of the revolution and the outcome of that would still have watered down the tax, presumably more to the advantage of FMG than the big boys. I nonetheless think it fair to suppose that that outcome would have been more advantageous to tax-payers than the sell-out document authored by the three big miners and rubber stamped by Gillard.
The other significantly reduced cost would have been the smaller tear in the fabric of Australia’s political economy. Gillard’s ascension declared loudly to every business in the country that rent-seeking was the new law of the land and although Kevin Rudd’s nanny state was encouraging similar behaviour, it was not with so loud a trumpet.
So, how will history remember Julia Gillard? The victors – miners, unions and other vested interests – will have her remembered as we have so far; having power thrust upon her by a bumbling predecessor.
The clearer thoughts of historians will see a glint her eye and dagger in her hand.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.