Triumph and Demise Reviewed

The Australian newspaper’ editor-at-large, Paul Kelly has a deserved reputation as one of the nation’s pre-eminent journalists and authors. This has been confirmed by his latest work, Triumph and Demise The Broken Promise Of A Labor Generation (Melbourne University Press, 2014). This book carries on from other Australian political masterpieces of Kelly’s such as The Dismissal: Australia’s Most Sensational Power Struggle (1976), The End of Certainty, The Story of the 1980s (1992) and The March of Patriots, The Struggle for Modern Australia (2009).

Triumph and Demise is Kelly’s account of the Rudd-Gillard era in Australian politics. This book not only analyses political upheavals within the Australian Labor Party (ALP) but also within the Liberal Party. Due to the high quality of this book in terms of its exclusive primary research combined with macro political and socio-economic analysis, Triumph and Demise could well become the benchmark against which the Rudd-Gillard era is assessed.

The Danger of Assumptions Becoming Orthodoxies

However, it is paradoxically due to the danger that Kelly’s book establishes new political orthodoxies that some of its assumptions and analyses warrant substantial challenge. This is because the ramifications of the Rudd-Gillard era regarding power being eventually concentrated within a new centralist oligarchy were not addressed in Kelly’s latest book.

Indeed, an acceptance of all of the assumptions and rationales which are advanced by Kelly in his latest book could possibly help contribute to the process by which Australian states are eventually phased out, to the nation’s substantial detriment. To attempt to overcome this acute danger a review of Triumph and Demise is undertaken to establish a broader context in which to challenge aspects of Kelly’s analyses.

The thesis which Kelly argues is that Kevin Rudd and Julia Gillard were two talented individuals who effectively combined their talents to end John Howard’s eleven year political dominance but that, by tragically terminating their political partnership, they doomed each other to political failure, if not demise. The factors which precipitated their eventual rupture are often insightfully analysed which strengthens Kelly’s conclusion that Julia Gillard’s June 2010 deposition of Kevin Rudd was ‘a strategic catastrophe’ which consequently doomed her subsequent prime ministership.

Tony Abbott: Master Strategist and Tactician

This author is also forthcoming in providing what he considers to be insights into the coalition side of politics, particularly with regard to his central argument that the motivation behind Tony Abbott’s 2009 deposition of Malcolm Turnbull as Opposition Leader was motivated by a determination to prevent the adoption of an Emissions Trading Scheme (ETS) from destroying the Liberal Party. Abbott is portrayed by Kelly as an ‘accidental’ opposition leader who not only saves his own party but in the process returns it to power.

Implicit in Kelly’s analysis of Abbott’s leadership is the question of whether Australia’s now prime minister (Abbott) will again display similar strength of character to overcome what in the book’s final chapter is termed, The Australian Crisis. What this author is essentially asking in this chapter is whether the new coalition government will continue with the neo-liberal economic reform which Kelly believes that the nation needs.

The first assumption of Kelly’s which is challenged is that the combining of the contrasting but still complementary respective talents of Kevin Rudd and Julia Gillard were crucial in ending the eleven year prime ministership of John Howard. Without casting aspersions on either Kevin Rudd’s or Julia Gillard’s talents, or being superstitious, Howard’s fall from office in 2007 was pre-ordained. It has been analysed in previous Social Action Australia articles that Howard’s fall was caused by elements within the Liberal Party which wanted to bring their leader down in the 2007 election.

The reasons why people within the Liberal Party wanted to bring Howard down are obscure and will possibly never be definitively known. A plausible scenario is that elements based within Howard’s personal New South Wales Right faction sought his demise so that they would represent their factional/business interests when an ALP government under Rudd’s leadership facilitated ‘regionalization’ (sic) in which Australian states would be dismembered.

(*The concept of ‘regionalization’ has been analysed in other Social Action Australia articles).

Kelly, actually omits to mention that, at the time of the 2007 election, the overwhelming majority of the Liberal Partyroom moved to depose Howard as leader and install the *Treasurer, Peter Costello as the new prime minister. There is also an omission on Kelly’s part to mention the succession deal that then treasurer did with the prime minister whereby he (Costello) forewent taking the Liberal leadership in return for Howard publicly announcing that he would retire as prime minister (providing the coalition won the 2007 federal election) during the following parliamentary term.

(*Peter Costello was, with the possible exception of Sir William ‘Billy’ McMahon, Australia’s greatest federal treasurer. As a backbencher, Peter Costello had the technical knowledge to be critical of the Rudd government’s respective October 2008 and February 2009 stimulus packages to know that they were unnecessary and therefore a colossal waste of money. The prudential controls which Peter Costello had previously instituted protected Australia from the Global Financial Crisis (GFC) so that massive Keynesian spending was not required.

Regardless of whether the stimulus packages should have been undertaken, Kelly makes the important point (Page. 174) that Treasurer Wayne Swan did not re-impose fiscal discipline in the recovery period as he said that he would).

Having been denied the leadership by his party room in 2006, Costello was not going to fall for the trap of being briefly installed on the eve of the federal election only to lose the prime ministership in the ensuing election due to internal sabotage within the Liberal Party. This sabotage did occur in the 2007 election with the result that the Rudd-Gillard leadership team won office.

Consequently, regardless of how effective the Australian union movement’s campaign was against the Howard government’s anti-employee WorkChoices legislation (as analysed in Chapter 8- Rudd And The Unions: An Alliance of Convenience) coalition rule was always set to end in 2007 as a result of internal sabotage within the Liberal Party. Those senior Liberals within Howard’s faction who brought him down did so in order that in collusion with anti-state elements within the ALP, ‘regionalization’ could be facilitated.

The Disaster of Cipher Government

Regardless of the qualities which either Kevin Rudd or Julia Gillard respectively brought to the new 2007 regime, the administration which they led was essentially to be a cipher government. That is, a government which undertook the bidding of an intra-party elite which desired the eventual dismemberment of Australian states.

Therefore, then Deputy Prime Minister Julia Gillard’s positive achievement in 2009 of repealing WorkChoices by replacing this reprehensible legislation with the Fair Work Australia Act (FWA, which Kelly seems ambivalent about) was a development that the anti-state rights Liberals who brought Howard down had to endure. This was part of the overall price that these particular Liberals were prepared to pay for having their anti-states agenda implemented by a cipher Rudd government.

To cut to the chase, the anti-states agenda which Prime Minister Rudd moved to implement as head of a cipher government was reflected by the Hospitals Agreement which was signed in April 2010 at the Council of Australian Governments (COAG). At this meeting, all the premiers and territory chief ministers, with the honourable exception of West Australian premier, Colin Barnet, signed an agreement whereby control of the state hospitals system was ceded to the Commonwealth along with a third of the states’ Goods and Services Taxation (GST) revenue!!

The premiers and chief ministers at the April 2010 COAG meeting who belonged to the ALP had strong centralist tendencies. Kelly’s overview of this meeting and its aftermath, which is provided in chapter 19, (Climate Change Retreat), has gaps with regards to its analysis.

Kelly says that Victoria’ then premier, John Brumby, despite belonging to the ALP, would have opposed a federal takeover of state hospitals should this proposal have been put up in a referendum by the Rudd government. The inference from this analysis of Kelly’s is that Brumby was opposed to the takeover (‘clawback’) of the state’s GST revenue under the hospital’s deal. However, Kelly omits to mention that, with the exception of the Liberal Party’s Colin Barnet, the premiers and chief ministers at this COAG meeting did actually cede control of their hospitals and a third of their GST revenue to the Commonwealth.

Due to the brushing over of this fundamental fact, the full magnitude of Julia Gillard’s later decision in 2011 as prime minister to return control of the hospitals and the clawed back GST revenue to the states is overlooked. Kelly writes on page 289 of his book that Prime Minister Gillard ‘revised the hospitals agreement and secured a unified agreement accepting Barnet’s stance’.

The above cited direct quotation negates the fact that unity had been previously achieved with all of the states and territories (with the exception of Western Australia) ceding their control of their hospitals and a third of their GST revenue to the Commonwealth. Therefore, Prime Minister Gillard’s action which was undertaken at her own volition of reversing the hospital’s agreement and the GST revenue clawback/theft was vital in stymieing the onset of the centralist process of ‘regionalization’. This act was an act of defiance on Julia Gillard’s part with regard to her continuing on from Kevin Rudd in respect to heading a cipher government.

The action that the ALP federal parliamentary caucus took in June 2010 of replacing Kevin Rudd as prime minister with Julia Gillard was part of an overall attempt to break free from the constraints of a Labor government implementing the inter-connected agendas of narrow power cliques within both ALP and coalition ranks.

The ALP Attempts to Break Free from External Manipulation

The narrative which Kelly provides concerning the events leading to the June 2010 leadership transition are essentially anecdotes in various chapters of the book detailing Rudd’s dysfunctional management style. Kelly analyses that this prime minister’s mistakes in managing the politics of climate change, implementing a super-profits mining tax and the hospitals agreement so that there was a situation where an exacerbated ALP panicked ‘after a few months of disappointing polls’ to depose a first-term prime minister when ‘Labor’s standing was certain to rise again’(Kelly, 2014, page 7).

Adopting an authoritative tone, Kelly wrote that the replacement of Kevin Rudd as prime minister was ‘brainless in its absence of virtually every requirement needed to make Gillard’s elevation into a sustained success’ (Kelly, 2014, page 7). To validate this analysis, interview data from the main instigators of the leadership transition are later quoted in the second half of the book to provide a retrospective in which they apparently accept Kelly’s perspective that they had erred in instigating the 2010 leadership change, despite Rudd’s glaring inadequacies as prime minister.

Thwarting The Would-Be Tanner Ascendancy

However, the analysis in Triumph and Demise does not sufficiently take into account the fear within the federal ALP that the Finance Minister Lindsay Tanner would become prime minister in a second Labor term unless Julia Gillard promptly replaced Rudd as the nation’s leader. Tanner was a member of the Strategic Budget and Priorities Committee, the so-called ‘Gang of Four’. As such, Tanner along with Kevin Rudd, Julia Gillard and Treasurer Wayne Swan belonged to a committee such that, because power was over-centralized, the cabinet and ALP federal parliamentary caucus were effectively excluded from the process of government. The ramifications of this exclusion are detailed in Kelly’s book with regard to the administrative chaos which ensued.

The analysis in Triumph and Demise does not sufficiently address Tanner’s central role in the Gang of Four, except to assert that he desired that the ALP be fiscally responsible in government. Kelly cites ‘family reasons’ (Kelly, 2014, Page. 200) as to why Tanner eventually quit politics and reference is made to the then Finance Minister’s deduction that he would have lost his seat in the 2010 federal election had he contested that poll (Kelly, 2014, Page. 39)

While Kelly does make historical reference to Tanner having opposed Julia Gillard’s initial parliamentary pre-selection, the book does not provide sufficient reference to the long-standing rivalry which existed between these two senior ALP politicians in 2010. As a result of this omission, Kelly does not analyse the acute political threat that Tanner posed to Gillard in 2010.

Having distanced himself from the financial wastage of the Rudd government with regard to Building the Education Revolution (BER) Tanner was in a position to transfer the blame for these excesses to Julia Gillard in order to politically destroy her. Integral to this process could have been Tanner implicating a wide range of sitting ALP federal parliamentarians to whose electorates such largess had been distributed. It was not beyond the bounds of possibility, if not probability, that Tony Abbott as Opposition Leader could have deliberately lost the 2010 federal election so that there could have been a Tanner succession to the prime ministership with the result that a Tanner government could have effectively implemented the dismemberment of Australian states.

Under such a scenario, Rudd could have, after an ALP 2010 election victory, been either ruthlessly deposed or eased out by Lindsay Tanner in a subsequent parliamentary term. Julia Gillard as prime minister in fact treated Kevin Rudd with relative magnanimity by appointing him foreign minister after the 2010 federal election. It was therefore a mistake on Julia Gillard’s part that she did not pay Rudd more public respect so that he would have remained inside the tent as foreign minister instead of becoming a pawn as a backbench dissident for anti-state elements within the ALP after he resigned from cabinet in February 2012.

Rudd potentially could have gone from being a cipher prime minister to the greatest foreign minister Australia had had since *Sir Percy Spender. Kevin Rudd could have utilized his status as a former national leader to endow himself with gravitas as foreign minister. Indeed, his rapport with US Secretary of State, Hillary Clinton gave Kevin Rudd the influence to help persuade the Americans to provide aerial support to the Libyan freedom fighters in 2011.

Instead, Kevin Rudd by resigning as foreign minister in February 2012 cleared the way for a gallivanting Senator Bob Carr to take his position while he (Rudd) became a political pawn destined to only serve as prime minister again as a stopgap before the coalition won the 2013 federal election. Rudd forewent a golden opportunity to have potentially left his mark in international affairs! As foreign minister, Kevin Rudd could have fulfilled a vital role in mediating between Japan and the PRC.

(*Although Sir Percy Spender was External Affairs Minister for only two years between 1949 and 1951, during this period he single handledly engineered the ANZUS Treaty and helped crucially formulate the Colombo Plan, which has made him Australia’s greatest foreign minister to date).

Returning to hypothetical, but still potentially valid scenarios, the Abbott Liberals would have countenanced another term in opposition so long as a Tanner government paved their way for a coalition landslide in 2013 by adopting either a carbon tax or an ETS so that a devastating election scare campaign could have been waged.

During the period of a hypothetical Tanner government, regionalization would have been rigorously applied by a prime minister (i.e. Tanner) who had previously articulated his determination to abolish states. The Abbott Liberals therefore, for the 2010 federal election, would have provided the then Member for Melbourne with the preferences he needed to stave off a Greens challenge for his seat on the basis that he would have delivered the goods with regard to dismembering Australian states.

It was the objective of denying Tanner the prime ministership in a second ALP parliamentary term which essentially precipitated the ALP”s June 2010 transition from Rudd to Julia Gillard. This dynamic is not cited in Kelly’s book and as such represents a fundamental gap in its analysis.

Had there been a ballot for the leadership in June 2010, Kevin Rudd probably would have garnered a paltry twenty to twenty-five votes, the majority of which would have been hardline Tanner votes. It is plausible that Maxine Mc Kew, the then federal member for Bennelong’s staunch support for Rudd at the end of his first prime ministership was reflective of her actually being a Tanner supporter. The fact that the overwhelming majority of MPs cut across factional lines to support Julia Gillard becoming prime minister was a rare instance of backbenchers calling the shots rather than being mere vassals of their factional warlords.

An argument could be advanced that Julia Gillard was actually too compromised to have denied Tanner the prime ministership because, as education minister, she had ultimate ministerial responsibility for the excesses of the BER. This is correct in that Julia Gillard was responsible but she was not however guilty. Similar to the disastrous pink batts home insulation, scheme it was Kevin Rudd who initiated the scheme but he left the responsible minster (who was then Peter Garret) to later pick up the pieces.

The Gillard Prime Ministership

Ultimately, the assumption of the prime ministership by Julia Gillard was an attempt by the ALP to break free from the constraints of being a cipher government. The reality of the situation was to be that the overall failure of the 2010-2013 Gillard administration was a failure to throw off the status of being a cipher government.

That Julia Gillard in her early days as prime minister was in a make or break situation with regard to freeing herself from the political constraints of leading a cipher government was reflected during the eve of the August 21st 2010 vote when she unambiguously declared that a government she led would never introduce a carbon tax. Whoever in the ALP coerced Prime Minister Gillard into making this declaration must assume a substantial degree of the culpability for Labor losing the 2013 federal election.

Because of the dynamics of inter-party collusion, it could have been arranged by elements within the ALP for Julia Gillard to declare that she would never introduce a carbon tax. Indeed, had she not made this declaration, it would have been arranged for Julia Gillard to have lost the election to Tony Abbott who could have then won a majority in his own right.

There is reference in Kelly’s book on page 366 to Julia Gillard’s categorical statement that she would not introduce a carbon tax. However, this author does not provide the wider political context as to why the then prime minister made this statement at this point because the perspective is not advanced that it could have been arranged by elements within the ALP working in collusion with the Abbott Liberals for there to have then been the election of a coalition government.

The ensuing analysis in Triumph and Demise provides the standard now accepted narrative as to how Julia Gillard outmanoeuvred Tony Abbott to form a minority government. An alternate approach to analysis is that having been denied an ALP parliamentary majority as a result of inter-party collusion, Julia Gillard was therefore left in a position whereby she could be subsequently pressured to breaking her election promise not to introduce a carbon tax.

Breaking The No Carbon Tax Promise: The Slow Motion Demise of Julia Gillard

Those within the ALP who made this demand of Julia Gillard that she break her no-carbon tax pledge must have known that they were consequently setting the scene for a coalition landslide in 2013. However, these traitorous elements within Labor surmised that a coalition 2013 landslide would set the scene for a reconfiguration of Australian politics by an Abbott government facilitating ‘regionalization’.

Kelly attributes Julia Gillard’s breaking of her August 2010 election promise not to introduce a carbon tax to pressure from the Greens Party who were in a balance of power position following that federal election. It is indeed, a mystery why the Greens Party helped pressure the Gillard government into legislating for a carbon tax when they must have known that this would fatally discredit the ALP to lead to a subsequent Abbott election victory at the next federal election.

Why the Greens stopped the introduction of an ETS in early 2010 which was proposed by the Rudd government is also inexplicable. Prominent Greens such as Christine Milne, Bob Brown and Adam Bandt would assert that a carbon tax is a superior method to combat human-made climate change even though such a tax is only utilized as a transition to an ETS.

Surely the Greens must have had sufficient nous to have known that in the context of Julia Gillard specifically ruled out a carbon tax just before the polling day of the 2010 election, whatever the merits of such a tax, the ramifications of the then prime minister subsequently breaking such a promise would have been the later election of a coalition government adamantly opposed to a transition to an ETS.

Julia Gillard probably calculated, or more to the point gambled, that her best hope was to provide competent and compassionate government in the ensuing three years as prime minister to sufficiently regain the public’s trust. A strong case could be put that Julia Gillard did provide highly effective government - as reflected by the passage of the National Disability Insurance Scheme (NDIS) and the adoption of the Gonski education funding model.

However, the overall context was such that Tony Abbott had to invoke the mantra that the carbon tax, was a ‘bad tax based on a lie’ so as to keep the Gillard government on the back foot. The then prime minister’s cause was also not helped by having as terrible a federal treasurer such as Wayne Swan who repeatedly promised surpluses even though he consistently failed to take the appropriate fiscal measures.

Cipher Government Leads To A Dud Mining Tax Regime

Having Wayne Swan as federal treasurer, and from 2010 as deputy prime minister, was reflective of the then continuing legacy of having a cipher government despite Julia Gillard’s attempts to break free. Although there has been argument between Kevin Rudd and Wayne Swan as to who was responsible for the botched policy regarding having a super-profits taxation in Australia’s vital mining sector, Kelly provides a degree of insight (in Chapter 20 The Mining Tax: The Fatal Blow) into this area of public policy during the Rudd era. For example, the research in Triumph and Demise reveals that the Resources Minister Martin Ferguson was effectively excluded from having any meaningful input even though he was often left with the responsibility to sort out the ensuing mess.

The overall point which is negated in Kelly’s analysis of proposed super-profits taxation for the mining sector is that the design of the Resource Super Profit Tax (RSPT) was effectively a dud tax. This was because the three big mining companies of BHP Billiton, Xstrata and Rio Tinto had designed the original RSPT so that tax minimization arrangements undertaken with Peoples Republic of China (PRC) State-Owned Enterprises (SOEs) could enable them to minimize the profits that they declared.

The consequences of the application of the originally designed RSPT were such that the three big mining companies would have a comparative advantage over the relatively smaller mining, such as Fortescue Metals Group who, lacking the necessary economies of scale, could not have effectively competed. The ramifications of this imbalance would have been disadvantageous trading arrangements being entered into with PRC SOEs to the possible fatal detriment of the Australian economy.

Details are provided in Chapter 20 of the Kelly book of the purported angst between the Rudd government and the Minerals Council as the representative of the mining sector. The anecdotes are probably valid in that they were reflective of the general disconnect between the Rudd government and the minerals sector.

Nevertheless, the avowed and purported opposition of the three big mining companies to the RSPT reflected their real need to pacify smaller mining interests which were threatened by this tax. Kelly therefore makes reference to Rudd’s moves on the eve of his deposition as prime minister to modify the RSPT so that the Fortescue Metals Group could adapt.

The subsequent rapidity - with which Julia Gillard as prime minister by early July 2010 had agreed to a substantially narrower applicable Minerals Resource Rent Tax (MRRT)- reflected the actual power that the three big mining companies had exercised all along despite their purported and hypocritical opposition to the RSPT. Kelly provides a narrative of how BHP Billiton executive Gerard Bond expeditiously formulated the MRRT which the Gillard government quickly adopted.

It would have been better had the notion of super-profits tax been abandoned altogether but it is possible that Treasurer Wayne Swan wished to save face by adopting the MRRT. Perhaps, with the ALP providing cipher government it was too much for there to have been an immediate and clean break.

That is not to say that Julia Gillard’s ascension to the prime ministership did not constitute a quantum leap forward into having an effective and independent government. The legislative progress which the Gillard government achieved over its three years in office was impressive. However, the absence of a parliamentary majority between 2010 and 2013 denied the federal government’s capacity for full independence and the full potential for political effectiveness.

Even without the ALP having a parliamentary majority, the Greens could have still provided Julia Gillard with an escape clause from essentially pre-determined political doom by supporting an ETS instead of a carbon tax. Prime Minister Gillard’s ultimate political ineffectiveness was not due, as Paul Kelly argues, because of the abrupt way that she became prime minister in June 2010 - but as a result of her being locked into breaking the election pledge that a government she led would never introduce a carbon tax.

Advance By Retreating: Tony Abbott’s Effective Political Strategy

Crucial to Julia Gillard’s eventual fall from power was the role that Tony Abbott fulfilled as federal Liberal leader. Kelly is therefore correct in his analysis that Abbott was one of the most effective opposition leaders in forty years since Gough Whitlam. This author referred to Abbott’s success in exploiting the Rudd government’s difficulties with the RSPT and the ramifications of Julia Gillard’s election breach of promise regarding the adoption of a carbon tax.

The context which Kelly does not provide concerning Abbott’s successes as Opposition Leader was that they were part of a pre-determined strategy of ensuring that that the Rudd and Gillard administrations remained cipher governments. For this reason, as referred to in the Kelly book, Rudd clearly defeated Abbott in a televised debate in March 2010 concerning the proposed federal government takeover of hospitals from the states.

Kelly does not however provide the context that Abbott probably allowed Rudd to win that hospitals debate as part of ensuring that the ALP administration was a cipher government which crucially facilitated the dismemberment of Australian states. Despite all the insights into Abbott’s character and leadership effectiveness that one can glean from reading Kelly’s book, the perspective that a key to the current prime minister’s strength is that he works to long range plans. Therefore Abbott’s potential weakness is that he lacks the necessary flexibility to adapt when long-term plans do not work out, such as with regard to getting all his budget measures through the Senate.

The rise of Tony Abbott as Liberal leader is described by Paul Kelly as ‘an accidental event’ (Kelly, Page 19, 2014) as no-one including the future prime minister purportedly envisaged in early December 2009. Contrary to Kelly’s specific analysis, Abbott’s election as leader (i.e. Opposition Leader) was due to his being a master tactician and strategist who has been able to manipulate results.

As previously mentioned, Tony Abbott is someone who operates within an established framework to achieve the objectives he seeks. The danger from reading Triumph and Demise book is Kelly’s inaccurate perspective that the issue which enabled Abbott to depose Malcolm Turnbull to become Liberal leader was the former’s opposition to an ETS.

Malcolm Turnbull Pays The Price for Supporting States’ Rights

The real reason that Abbott was able to depose Malcolm Turnbull was because of the latter’s support for the retention of Australian states. In a book as exhaustive as Kelly’s, which is interspersed with interesting vignettes, this author for some unknown reason does not refer to a luncheon which Malcolm Turnbull attended as Opposition Leader in 2009 at which where he was asked - following his address - a series of pre-determined questions angled at trying to have him declare that states were obsolete. To Malcolm Turnbull’s lasting credit, he unambiguously declared his position by answering that he would not support the abolition of states!

From that moment, Malcolm Turnbull became a target slated for political execution as Liberal leader by the powers- that be- within his party which also wanted to ensure that the ALP continued to provide a cipher federal government. It should be noted that Malcolm Turnbull previously had not won the Liberal leadership as expected following the 2007 federal election. This was probably because anti-state elements within the then opposition party rallied to former defence minister, Dr. Brendan Nelson who won a surprise victory as the new Opposition Leader.

There is a plausible scenario that the anti-state elements within the Liberal Party, which had recently brought Howard down, ‘got to’ Peter Costello so that he would not stand for the leadership following the coalition’s 2007 election defeat. It was probably in the context that Costello did not trust his party room which had previously denied him, that he did not stand for Liberal leader in September 2008 when Nelson’s continuance as Liberal leader was no longer viable.

Even though Nelson’s positions in the opinion polls had massively collapsed, the four vote margin of Malcolm Turnbull’s election victory in September 2008 over Nelson was still slender. The narrowness of this victory probably reflected more of anti-Turnbull sentiment than actual support for the politically hapless Brendan Nelson.

While Malcolm Turnbull was clearly a ‘liberal’ with regard to any liberal-conservative dichotomy within his party, he was (and probably still is) very committed to the Liberal Party ideologically and philosophically being a ‘broad church’. Reflective of this mindset, Malcolm Turnbull was probably prepared to live with the substantial anti-ETS sentiments within the Liberal and National parties.

Unfortunately, the same forbearance of Malcolm Turnbull remaining as Opposition Leader who supported an ETS was not extended to him. Kelly writes that passions ran so high that Liberal Party MPs were prepared to sit on the cross benches so to plunge their party into the worst split in their party’s history. This well may have been the case but this does not negate the possibility that had Malcolm Turnbull remained as Opposition Leader, he would have been broad minded enough to have allowed coalition MPs a conscience vote on climate change. Therefore, in that scenario, if there had been a Liberal Party split over an ETS, it would not have been because of Malcolm Turnbull.

The anti-ETS passion which was stirred up within the Liberal Partyroom was deliberately inflamed by anti-state elements within the then opposition party to depose Malcolm Turnbull as leader. There was accordingly pre-calculation with regard to Joe Hockey standing for leader and advocating a conscience vote on an ETS. Hockey stood for leader - not in order to win that position - but to split the Turnbull vote to ensure Abbott’s election as leader. The then Shadow Treasurer’s advocacy of a conscience vote was to influence those MPs who had voted for him but were opposed to an ETS to shift their vote in the second round to Abbott.

The calculated and premeditated nature of the Abbott challenge was also reflected by the ABC airing its *Four Corners programme - relatively close to the Liberal MPs vote on the leadership- in which an opinion poll purportedly indicating strong public opposition to an ETS was canvassed. It is poetic justice that those left-wing elements within the ABC who helped precipitate Malcolm Turnbull’s (who ironically is a strong supporter of the ABC) deposition - on the basis that Abbott was unelectable- now have a coalition government which has elements within it who are determined to eventually fatally undermine the national broadcaster.

(*Kelly does not refer to this Four Corners programme in his book).

Furthermore, with regard to the politics of climate change, considerable analysis is undertaken by Kelly to support the viewpoint that Rudd badly miscalculated Malcolm Turnbull’s bi-partisan approach to an ETS so that political points could have been scored against the then Liberal leader. There may have been some inevitable point-scoring over this issue by the then prime minister against the Opposition Leader but this was the political norm.

Mention is not however made in Kelly’s exhaustive book that, in parliament when Malcolm Turnbull was coming under pressure from his own party room over an ETS, Rudd referred to his opposition counter-part as ‘mate’. There was still, counter to Kelly’s perspective, sufficient inter-party good will regarding the ETS legislation for it to have been passed had Turnbull remained as Opposition Leader. That Malcolm Turnbull was deposed was due to the ETS being used as the pretext so that an anti-states agenda would be implemented by Abbott as the new Opposition Leader.

The viewpoint is also advanced in Triumph and Demise that Kevin Rudd made a strategic political blunder by not going to an election after the ETS legislation was voted down in the *Senate. This analysis is flawed because an Abbott led opposition could well have ran an opposition scare campaign against an ETS which could have ensured that Kevin Rudd anyway became a one-term prime minister.

(*Ironically an ETS, or a Carbon Pollution Reduction Scheme, would have become law under a Rudd government in 2010 had it not been for the still inexplicable and inexcusable opposition of the hypocritical Greens).

The abandonment by Prime Minister Rudd of the option of going to an early 2010 election on the ETS was sensibly supported by the then Deputy Prime Minister Julia Gillard and Treasurer Wayne Swan on the sound basis that there has to essentially be a bi-partisan approach to climate change policy.

There was another important reason why the first Rudd administration did not pursue an ETS. As a cipher government, there were other priorities that had to be pursued before the 2010 federal election - such as formulating disadvantageous trading relations with the PRC by adopting the big three mining companies’ RSPT - and beginning the process of dismembering states via the so-called Hospitals Plan.

The ultimate failure of Julia Gillard to break free from leading a cipher government was due to the effectiveness with which Tony Abbott relentlessly prosecuted her for having adopted and applied a carbon tax. There was probably also internal pressure from within the ALP for Prime Minister Gillard to pursue an anti-states agenda which was reflected by the government’s passage of legislation in 2013 for there to be a constitutional referendum on the recognition of local government in the constitution.

Such a referendum would have been held, as legislated, on the 14th of September 2013 simultaneous for when Prime Minister Gillard had announced at the beginning of the year that a federal election was to be held. Therefore in this contest the major positive executive decision which Kevin Rudd made during his June to September 2013 second prime ministership was that the federal election was to be held on the 7th of September of that year. The beneficial consequence of this re-scheduling was that the referendum has not yet been held.

The Acute Danger of ‘Regionalization’ via Constitutional Recognition of Local Government

Nevertheless, the Abbott government can still hold a referendum on the constitutional recognition of local government in the Australian constitution. Should this occur then either a future centralist ALP government or a centralist coalition government will be able, should the ‘yes’ case prevail, to devolve vital services and functions which are currently fulfilled by the Australian states to newly constituted regions.

The above scenario will create a regime in which Canberra’s role as the allocator of funds to a new regional tier of government will ensure that power is detrimentally concentrated within the national government. The intra-party support for this ‘reform’ is essentially derived from the desire by factional heavy-weights in the two major parties to gain substantial control of patronage and power at a devolved level.

It is the current power of these factional heavy weights in both major parties which ensures that ‘regionalization’ remains a viable proposition. The ALP’s capacity to resist the onset of this process had probably expired as reflected by the former Gillard government’s agreeing to hold a constitutional referendum on local government recognition.

The Fall of the Gillard Government

That the Gillard government fell in June 2013 was precipitated by the horrendous realization on the part of its parliamentary ranks that the ALP faced political pulverization at the polls due to Tony Abbott’s success in generating and exploiting public hostility toward the then prime minister over her broken promise not to adopt a carbon tax. The analysis of the last days of the Gillard government in the Kelly book covers the turbulence of ministers resigning and Simon Crean being dismissed as a senior minister as there were moves to reinstate Kevin Rudd as prime minister.

Kelly attributes the above cited travails to the supposed mistake which the ALP made of previously deposing Rudd as prime minister in June 2010 and the consequences of the apparently flawed transition to Julia Gillard. The real and underlying cause of this political instability was actually Tony Abbott’s effectiveness in discrediting Julia Gillard for breaking her promise that no carbon tax under a government she led would introduce a carbon tax. Julia Gillard was coerced into making that promise just before the 2010 poll and she was similarly coerced by anti-states elements within the ALP into breaking that promise by subsequently introducing a carbon tax.

Julia Gillard as prime minister was an effective national leader who set the groundwork for making improvements in people’s everyday lives. This was reflected by the passage of the NDIS or Disability Care and the adoption of the Gonski education funding model.

These achievements followed on from her accomplishments as deputy prime minister where she helped give children from lower socio-economic backgrounds the opportunity for a good start in life via the introduction of the NAPLAN tests. The standout achievement of the Rudd government- which can also be attributed to Julia Gillard when she was employment relations minister - was the repeal of the WorkChoices legislation with the passage of FWA. This action (which Kelly does not seem to endorse) constituted the revival of an arbitral system of industrial relations - which going back to the 1900s - has been a facilitator of social harmony and economic progress for Australia.

Uncertainty Restored: The Return of Economic Rationalism

An argument can therefore be validly put that Julia Gillard’s 2010 to 2013 government was the most effective ALP federal administration since the governments of the great Andrew Fisher in the early years of federation. By contrast, Kelly argues that the hallmark of effective ALP government was provided during the Hawke –Keating era (1983 to 1996).

The Hawke-Keating era of neo-liberal/economic rationalist reform was one in which high interest rates resulting from having to service a ballooning public foreign debt grievously hurt small business and family farms. The tariff cuts and the virtual abandonment of industry assistance policy led to a contraction in the nation’s manufacturing base and helped consolidate the transition to where over 25% of the Australian workforce is now in part-time or casual employment!

The negative legacy of the Hawke-Keating era was subsequently manifested by the rise of ‘Hansonism ‘ in the 1990s as part of the ALP’s electoral base turned against Labor because of its economic rationalism. That John Howard was to maintain his electoral ascendancy until the 2007 was in part due to his *success in later winning over former ALP supporters (‘the Howard Battlers’) who had gone over to Hanson’s One Nation Party - over to the political camp of the coalition. Overall, the Hawke-Keating legacy is one of which the ALP should not be proud.

(*The Lasch political strategy of right-wing leaders winning over the support of the lower socio-economic background voters has been defined and detailed in previous Social Action Australia articles).

To be relatively fair to the Hawke and Keating governments, the industrial relations reforms which were undertaken were a mixed bag. The introduction of enterprise bargaining (which was initially advocated by the Business Council of Australia) facilitated needed flexibility without endangering employee pay and conditions. Enterprise bargaining, - particularly if the process has substantial union input with rank and file involvement via the application of the organising model- can boost productivity and subsequent pay levels.

Australian Trade Union Decline

Nevertheless, enterprise bargaining can be a double edged sword in that it can be a de-unionising process which was why the Keating government’s passage of the Industrial Relations Reform Act in 1993 - which introduced non-union enterprise bargaining - was such a retrograde step. Union effectiveness had been previously undermined by the Industrial Relations Act 1988 facilitating the de-unionising process of union amalgamation.

Union amalgamation was a de-unionising process. Rank and file members did not feel an attachment to the new super-industry unions which were formed as they had to the craft based unions which had been superseded. This alienation validates the Defensive Approach to union purpose which is anti-Marxist. The Defensive Approach to union purpose correctly maintains that rank and file members have a sense of commitment to their union which is derived from identification with their craft and that union effectiveness can and should measured by unions securing beneficial bargaining outcomes for their members.

That the onset of union amalgamation in the 1990s undermined the application of the Defensive Approach - and consequently of union effectiveness-can be gauged by the steep falls in union membership with statistics now showing that less than *20% of the Australian workforce is unionised!

(*Australian Bureau of Statistics figures in 1976 showed that 51% of the Australian workforce was unionised!).

The adoption of union amalgamation was the *payback from the hard left of the ALP for their accepting the Hawke and Keating governments’ economic rationalism. The ALP Left erroneously believed that union amalgamation would lead to a concentration of power when it instead facilitated massive de-unionisation. However, an aspect of union amalgamation which did have a positive impact was the consequent establishment of union administered superannuation.

(*The payback that the hard left of the New Zealand Labour Party extracted for acquiescing to the adoption of economic rationalism in the 1980s was that the Lange government destroy the ANZUS alliance by not allowing American ships with nuclear material to visit).

The extension of compulsory superannuation was probably the *main positive achievement of the Hawke government. This was because millions of Australians gained (or potentially gained) financial security while pressure on the pension system was crucially eased. The motivation of the hard left of the ALP supporting the introduction of superannuation was however to gain millions of dollars funds to be the responsibility of new industry union funds. However, union superannuation industry funds could have still been established by craft based unions linking up with each other within a particular industry to provide satisfactory superannuation coverage.

(*The other positive achievement of the Hawke government was the introduction, or re-introduction, of Medicare, which during the Whitlam period was called Medibank. To be relatively fair, subsidised and therefore universally available medicine, was the only really positive achievement of the Whitlam government which, with the possible exception of the Rudd administration, was the worst federal government in Australian history).

Whether the Hawke and Keating governments’ legacies were positive or negative, these ALP administrations were essentially ciphers for external interests which did not necessarily have the nation’s genuine national interest at heart.

The Gillard administration was not a cipher government but it was subject to pressures from internal forces which desired the eventual destruction of Australian states and who undermined government effectiveness by forcing the adoption of a carbon tax. Julia Gillard remained calm as the ALP faced electoral pulverization due to her forced breach of promise that a carbon tax would never be introduced under a government she led.

The Rudd Return

Being relatively composed and pragmatic, Julia Gillard prepared to forgo the prime ministership to avoid electoral pulverization for the ALP. Consequently, as referred to in the Kelly book, Julia Gillard offered the prime ministership to the Climate Change Minister, Greg Combet. This offer possibly reflected a return to her original *left-wing origins because Combet was one of the few figures on the hard left who consistently supported Julia Gillard.

(*Julia Gillard also adopted a hard left approach to politics by becoming an ideological feminist and engaging in what became known as the ‘gender wars’. As Kelly pointed out in Chapter 27 Feminist Heroine, the impact of this campaign was to alienate too many men from the ALP. This alienation would not have been a factor for the ALP had Julia Gillard not become so unpopular because of the breach of promise regarding the carbon tax).

Having Greg Combet as a stopgap prime minster would not have saved the ALP from electoral decimation. This was because Combet was too associated with the broken carbon tax promise as the responsible minister for the application of this tax which politically destroyed Julia Gillard.

The only real option therefore for Julia Gillard to save her party from an electoral rout was to make way for Kevin Rudd. Gillard probably reluctantly recognised this as did the then Workplace Relations Minister and then the probable next Opposition Leader, Bill Shorten. Kelly wrote that the Gillard camp was ‘contemptuous’ of Shorten as ‘weak and duplicitous’ (Kelly, Page 456, 2014). This attitude may have been felt by Gillard supporters toward Shorten but an alternative perspective is that the then Workplace Relations Minister actually remained a Gillard supporter, and as such, his last minute switch to Kevin Rudd, probably had the soon- to- be deposed prime minister’s reluctant and covert endorsement.

Someone as intelligent as Julia Gillard knew that the only way to avoid an electoral rout at the 2013 poll- because of the public’s hostility toward her for breaking her promise not to introduce a carbon tax- was to make way for Kevin Rudd to mitigate the ALP’s losses. The Rudd return did indeed mitigate the ALP’s losses in the 2013 election because the electorate did not have a hate figure in the person of Julia Gillard whom they wanted to punish.

Perversely, many of the voters who subsequently opted for the ALP in the 2013 election did so, not wanting Kevin Rudd to win a term in his own right but rather to deny Abbott a victory of the proportion which the coalition and the Liberal National Party respectively had in the New South Wales and Queensland state elections. Similarly, most of the ALP federal parliamentarians, including a probable majority of the MPs who voted for Rudd, possibly did so desiring an Abbott victory in preference to the recently reinstated prime minister winning a term in his own right!

Because Shorten’s support for Rudd’s return was similar to most other federal ALP caucus MPs in that it was tactical, he (Shorten) did not suffer the potentially fatal stigma of having the politically fatal reputation of being a ‘rat’. Consequently, Shorten was able to relatively easily win election as ALP leader after the ALP went into opposition following the September 2013 poll. That a staunch Gillard loyalist such as Tanya Plibersek was elected deputy unopposed was possibly indicative that the outgoing prime minister (Julia Gillard) had possibly done a deal with the Shorten camp.

The ALP’s new hybrid method of electing a leader with rank and file involvement is now a legacy of Kevin Rudd’s second brief prime ministership. Even though Rudd notionally came from the Right, it was an irony that the hard left was such a loyalist base of support for him. An important reason for this paradox was that the ALP hard Left gained the important concession regarding their supporting Rudd’s return that there would be a rank and file input into the election of the Labor leader to increase Anthony Albanese’s chances of successfully contesting the leadership.

Bizarrely, the Rudd return also ensured rule changes whereby 75% of ALP parliamentary caucus members had to sign a petition to bring on a leadership ballot! This ‘reform’ (sic), which was instigated at Rudd’s insistence, is elementarily stupid because the democratic norm is that – if a leader of a party loses 50% or more of the support of his or her own parliamentary party-then that person steps aside.

While Rudd may have thought that the 75% rule change was revenge for what happened in June 2010, it should not be forgotten that there still would have been that extent of support for there to have been the transition to Julia Gillard as the new prime minister. In a democracy, parliamentarians are entitled to exercise their judgement, particularly in times of national emergency.

Federal government dysfunction had become a national emergency by June 2010. To convey why it was then vital that Julia Gillard replace Rudd as prime minister, the following socio-economic and political factors are briefly stated. Some of these points will be later expanded upon:

- There was the danger of an RSPT being adopted under which due, to the application of dud taxation on the mining sector, the PRC stood to gain a virtual monopoly power over Australia’s mineral resources;
- Chaotic governance which effectively paralysed the effective functioning of the senior echelons of the Commonwealth public service;
- The nation being unnecessarily massively indebted by the exorbitant stimulus packages;
- The excesses of the BER and the pink batts home insulation scheme which threatened to create the scenario by which Lindsay Tanner could succeed to the prime ministership in a second ALP term of government and;
- The clawback of GST revenue under the so-called Hospitals Plan threatened to facilitate the subsequent introduction of ‘regionalization’ so that states could be eventually phased out.
- The introduction of the NBN white elephant which exacerbated the descent into further public foreign debt.

Julia Gillard’s Positive Impact as Prime Minister

As previously stated, had Kevin Rudd not been replaced by Julia Gillard in June 2010, then Lindsay Tanner may well have become prime minister in the following parliamentary term. Not only would a Tanner government have proceeded to have dismembered Australian states, such an administration could have been worse than the Whitlam government if Tanner’s terrible record of undermining union effectiveness within the Federated Clerks Union *(FCU) is taken into account.

(*Representation of clerks is now undertaken by the industrially weak Australian Services Union).

The transition to Julia Gillard in 2010 also crucially prevented the adoption of an RSPT- which would have established an oligopoly within the vital mining sector which would have facilitated the PRC having a very detrimental trading advantage over Australia – which could have proved fatal to Australia’s standard of living.

The ascension of Julia Gillard as prime minister also enabled her to reverse the onset of centralization with Canberra returning both responsibility for hospitals to the states as well as GST revenue which Canberra had ignominiously clawed back. All in all, the Gillard administration was markedly different and positively distinct from its predecessor because there was a concerted attempt to free the ALP from the confines of being a cipher government.

Paul Kelly was correct when he stated the obvious that a crucially important reason for Julia Gillard’s fall was her breaking her election promise regarding the introduction of a carbon tax. However, Kelly is incorrect in saying that the switch from Kevin Rudd to Julia Gillard was a mistake. Australia could not have endured the consequences of continuing with a Rudd cipher government for the reasons which have already been outlined.

Julia Gillard illustrated what could have been with regard to Australia having an independent and administrative competent prime minister. The major problem with Julia Gillard’s prime ministership was that she did not break out of the political constraints which were imposed on her by making and then breaking her promise not to introduce a carbon tax. This was a particularly fatal mistake with a Tony Abbott as your principal opponent.

Tony Abbott’s Strategic Strengths and Weaknesses

Abbott is a politician who does strategy. Therefore, when Abbott’s opponents do not conform to the framework he engineers, he goes from being a master politician to being an ineffective leader. The problems that Abbott is currently having with regard to the Senate cross benchers refusing to pass key government budget measures is reflective of how Abbott can be an ineffectual politician when anticipated outcomes do not transpire.

Prime Minister Julia Gillard therefore could have outwitted Tony Abbott by resisting pressure to break her no carbon tax pledge by attempting to again legislate for an ETS. Therefore those ALP politicians who coerced the then prime minister to renege on the no carbon tax are ultimately culpable for Julia Gillard and Labor’s subsequent fall in 2013.

The fact that Tony Abbott was prepared to help engineer the introduction of the ETS - even though he had stated that such a tax would inflict great harm on the nation- is reflective of a politician who is prepared to put his political objectives before those of a genuine national interest. Abbott would have known that his advocating a plebiscite concerning the introduction of an ETS at the time of the legislation’s passage in 2011 made it consequently politically unviable for Prime Minister Gillard to insert the escape clause of there being a popular vote on the introduction of an ETS.

Consequently, if Bill Shorten wishes to strategically thwart Tony Abbott, he should not provide bi-partisan support in a future referendum to recognise local government in the constitution. Similarly, Malcolm Turnbull could live up to his potential of being a leader of substance by helping organise a *genuine ‘No’ case among pro-state elements within the major political parties so that he can bequeath a positive legacy to his nation. Should Shorten endorse the constitutional recognition of local government in the Australian Constitution, this should not deter pro-states rights elements within the ALP from supporting a well organised Malcolm Turnbull led ‘No’ case.

(*There is a real danger that a duplicitous (‘dud’) ‘No’ case could be run in the future constitutional referendum to ensure that the ‘Yes’ case actually prevails).

Alternately, because the anti-states rent-seeking elements within the two major parties have an established agenda, there is a real danger that they can plan and co-ordinate ahead of time to achieve their objectives when it comes to conducting their ‘Yes’ case. A major reason why these anti-state elements have maintained their political ascendancy has partly been because too much of Julia Gillard’s political inheritance was steeped in the legacy of Rudd’s cipher government. This legacy combined with Prime Minister Julia Gillard making and then breaking her no carbon tax pledge ultimately ensured that Tony Abbott won the 2013 federal election.

The Abbott government now is pursuing policies which were inflicted on the previous Rudd and Gillard governments when they were subject to external and internal pressures. Similarly, the current federal government is essentially pursuing an anti-states agenda in which they are being led by a politically canny prime minister. Alas, Prime Minister Abbott’s political astuteness does not mean that he is leading a government which has the nation’s genuine interests at heart because it is essentially an economic rationalist administration.

The International Context

The present prime minister is however being highly effective on the international stage. Prime Minister Abbott is utilizing his growing international influence to support the American led international aerial campaign in both Iraq, and to a lesser extent in Syria, against ISIS. External military aerial support for the Free Syrian Army could create the circumstances for the creation of a high quality provisional government, with Baathist Party representation, to eventually take Syria through to democratic elections.

The Turkish government of President Recep Erdogan has correctly refused (but hopefully on a temporary basis) to commit ground troops to stop ISIS from taking the Syrian city of Kobane, which is near the Turkish border, unless the United States establishes a no-fly zone in Syria which would consequently incapacitate the evil regime of President Bashar Assad. The Obama administration will find itself chasing its tail unless the Assad regime is replaced with broad based provisional government. This would not only benefit Syria but the Middle East.

No nation since 1970 has done more than Assad ruled Syria to disrupt the Middle East peace process. The strategically astute Assad regimes of Hafez Assad and his son and successor Bashar since 2000, were so politically adroit that they effectively suppressed and simultaneously co-opted Syria’s substantial Kurdish minority by going into an alliance with the Kurdish Workers’ Party (PKK). The Syrian Baathist dictatorship utilized the PKK to undermine Turkey’s domestic stability.

Therefore if Turkey were to militarily intervene to prevent ISIS from taking Kobane this would not only save that city’s predominately Kurdish population from been slaughtered but this would be a devastating blow against the PKK and consequently the Assad regime.

The moderate Kurdish Democratic Party (KDP)and the moderate Patriotic Union of Kurdistan (PUK) could be harnessed by the Erdogan government to go into an alliance with the Free Syrian Army (FSA) to create the momentum to establish a new Syrian provisional government which could contain pro-Tehran Baathist elements. Hopefully, the Erdogan government is now expeditiously negotiating with the KDP and the PUK to establish a military alliance to fatally undercut the PKK. The combination of American led aerial strikes around Kobane combined with Turkish and moderate Kurdish troops on the ground offers the best hope to defeat ISIS.

The Australian government will also hopefully lobby the United States to provide aerial support to the democratically elected Libyan government to crush the militias which are generating anarchy. Furthermore, Australia could also lobby for weapons and a NATO advisory team to be despatched to Ukraine to effectively resist Russian aggression. The scope for positive foreign policy achievement on the part of the Abbott government is substantial but probably still unformulated. Unfortunately, the current Australian federal government does have a sense of domestic policy direction which is contrary to the genuine national interest.

The Abbott Prime Ministership

The Abbott government will, in the course of this parliamentary term, have a tax summit in which GST revenue will again be targeted for re-direction from the states to Canberra via GST clawbacks. There will also be the future release of a white paper on Australian federalism which will seek to introduce ‘regionalization’ so that Australian states will eventually be abolished.

The federal coalition government also seeks to destroy Australian trade unions by stealth. This intention has been manifested by the Royal Commission into trade union ‘corruption’. Furthermore, the positive arbitral nature of the Australian industrial relations system will also probably come under as sustained attack based on the future findings of the Productivity Commission’s anticipated enquiry into the operations of the Fair Work Commission.

That is not to say that the Abbott government does not already have some positive achievements under its belt. These include the repeal of the carbon tax and the RSPT and the formulation of the ‘Direct Action’ climate change policy which, if actually applied, could actually reduce carbon levels more effectively than what the carbon tax did or an ETS could ever do without disrupting the nation’s overall economic well-being. Prime Minister Abbott could also take the fundamentally positive step of providing the state of Western Australia with a greater share of GST revenue, similar to the proportion which other states are allocated.

The main positive policy objectives of the Abbott government is its stated objectives of paying off (or substantially reducing) the nation’s public foreign debt and returning the nation to a budget surplus. The major problem regarding the pursuit of these stated objectives have been the interspersal of harsh neo-liberal/economic rationalist budget proposals. These include proposed changes to the method of pensioner indexation.

There was also the proposal to cut off of social security payments for young people for six months, which due to the courage of some coalition backbenchers has apparently been abandoned. Hopefully the introduction of a GP co-payment will be abandoned along with the proposed deregulation of university fees, which will have no appreciable effect on the budget bottom line. The actual ramifications of the Abbott government’s higher education reforms will be to threaten equitable access to higher education.

Back on the Road to No-Where: Recycling Economic Rationalism

The Abbott government has also been remiss with regard to industry policy (which this government refers to as ‘corporate welfare’) which has effectively ensured that Australia will have no domestic car making manufacturing sector by 2016! Furthermore, the Free Trade Agreements (FTAs) which the Abbott government have negotiated with South Korea and Japan, and is in the process of negotiating with the PRC, may well become double edged swords.

The opportunity cost of Australia gaining access to sell agricultural products under FTAs could be off-set by a consequent flood of manufactured imports. Given that the Abbott government to date has conspicuously failed to effectively support domestic manufacturing, it is not beyond the realms of possibility that Australia will become perpetually in trade deficit and be burdened with even higher levels of underemployment.

Employment policy is also shaping up to be another area of policy weakness on the part of the Abbott government in keeping with the negative traditions of the Hawke and Keating governments. There seems to be an emphasis on the part of the Abbott government to promote what it terms, ‘female participation’ in the workforce. There is nothing inherently wrong with this stated objective but the ramifications of this policy have to be assessed with regard to their actual impact.

Forcing married or de facto partnered females (or male spouses/partners) who do not wish to be in the workforce is not only ethically wrong but it has the actually negative impact of creating an oversupply of labour so that employers can casualize the workforce, meaning that they can pay less. The impact of this labour oversupply adversely affects those in semi-skilled or unskilled labour. E.g. the high levels of casualization in the Australian retail sector have effectively destroyed the prospect of many non-managerial staff ever having full–time employment.

The proposed removal in the budget of tax benefits for mothers after their children turn six has the potential to force too many mothers into the workforce into casual and/or part-time jobs. Consequently, too many semi-skilled or unskilled male and females who are already in the workforce will have their existing employment security jeopardized. The supposed budget savings which have been invoked to justify the removal of these tax concessions will be off-set by the subsidies which the government will have to pay to subsidize child care.

The wrong policy course that the Abbott government is setting regarding family policy is also being consolidated by the coalition supporting the mindset that any payments to one of the parents who stays at home is a form of welfare. Furthermore, while there are instances where excellent child-care is provided in Australia, it is really important for the sake of the development of children that they be raised by one of their parents on a full-time basis. Household work is labour and as such the payment of government remuneration to one of the parents who stays at home is a positive development because the dignity of labour is being recognised.

For the Abbott government to promote positive family policies which have a flow- on effect to bolstering levels of full-time employment among unskilled and semi-skilled labour, it will be first necessary to end the debt and deficit spiral. Government expenditure on financially supporting one of the parents remaining at home to raise children will be crucial, particularly if the nation’s manufacturing sector continues to contract. The wealth that Australia gains from its primary produce exports (which encompass agricultural products and mined materials) could be ploughed into government expenditure which remunerates house-hold work.

Alas, the Abbott government seems set on a course of forcing both parents into the workforce so that an oversupply of labour is created in which lower wages will be paid. The jobs that may well be available could overwhelmingly be in an already precarious service sector due to a continuing contraction of Australia’s manufacturing sector because of an absence of industry assistance.

The Demise of the Positive Aspects of the Australian Settlement?

The above cited scenarios suggest a bleak future for Australia because the Abbott government has opted to take a neo-liberal policy course. Therefore the pessimistic, from Kelly’s perspective in which he writes in his final chapter, (Chapter 33- The Australian Crisis,) is misplaced. The Abbott government intends to continue in the neo-liberal/economic rationalist tradition of the of the Hawke and Keating governments.

While the Howard government was also an economic rationalist government, it at least paid off Australia’s massive foreign debt and astutely handled the China minerals boom that higher living standards were delivered. Nevertheless, this coalition government pursued a draconian industrial relations policy which effectively negated any of the potentially positive impact of providing a degree of financial support for a parent who was not in the workforce. With regard to industrial relations policies, the Abbott government seems intent in eventually emulating the former Howard government.

The Australian Labor Party (ALP) should therefore not follow the advice that Kelly is now offering in the media that this party’s institutional links to the union movement be diluted. While it is highly regrettable that the de-unionising process of union amalgamation was undertaken the consequent industry unions which were formed have the requisite resources in the context of political apathy to carry Labor candidates in elections.

Even though Kelly is apparently an admirer of the Hawke and Keating ALP governments, the Labor Party at least should be wary of accepting this prestigious neo-liberal/ economic rationalist commentator’s unsolicited advice to dilute the institutionalized role of trade unions within Labor Party structures. Furthermore, Kelly’s concerns that the Abbott government will not pursue so-called reform are actually unfounded.

Indeed, the major problem which confronts Australia is that the neo-liberal/economic rationalist paradigm which Kelly advocates will be pursued by the Abbott government. Therefore the demise of the Rudd and Gillard governments does not signify the demise of economic rationalism but rather the triumph of that doctrine so that the positive aspects of the Australian Settlement (a concept which Kelly initially formulated) regarding state sanctioned industrial arbitration and industry assistance can be irrevocably dismantled.

Dr. David Paul Bennett is the Editor of Social Action Australia.