It wasn’t long ago that the leadership question prompting the greatest speculation, from the corridors of Canberra to the back seats of taxis in Western Sydney, was who would lead the Liberal Party to the next Federal Election: Malcolm Turnbull, Peter Dutton, Julie Bishop or Tony Abbott?
Now, the question on everyone’s lips is who will lead the Opposition: Shorten or Albo?
Earlier this year, conservative Liberal colleagues sat back to ascertain whether the Prime Minister’s fortunes would rise or fall with the Federal Budget. It was a turning point. The Budget’s role in securing Turnbull’s leadership and, in turn, jeopardising Shorten’s cannot be overstated.
It is against the anger of the business community that Albanese, a figurehead of the Left faction, has emerged as their unlikely ally
The great success of the Budget wasn’t grand new policy ideas or any attempt to cut spending; it was the clear battlelines it has provided the Coalition to campaign against Labor through to the next election.
As Turnbull reached secure footing through a strong economic narrative based on personal income and business tax cuts designed to grow the economy and create jobs, his opposite number, Bill Shorten, stumbled close to the edge.
This is largely due to Labor’s economic policy which has been as unpopular in Shorten’s own party as it has been among voters.
Shorten, through the influence of shadow Treasurer Chris Bowen and the National Secretariat of the ALP, has been pursuing an economic approach best described as class warfare, envy of the rich and wealth redistribution.
There was the shock announcement a fortnight ago that Labor would vote down the government’s personal income tax cuts for those earning more than $90,000.
Shorten was telling the many families in Labor’s heartland of Western Sydney who earn above $90,000 a year that they do not deserve hip-pocket relief. There was no recognition they were doing it tough, with high power prices and mortgages.
The Senate’s support for Turnbull’s economic policy and the vote to legislate the tax cuts proved a humiliating defeat for Labor. Noticeably, Bowen was sent out to face the media alone after Turnbull’s victory.
After the disastrous first parliamentary week of the sitting fortnight, Labor tried to regain control of the news agenda this week by releasing advertisements that attacked Turnbull personally over his wealth, claiming his policy to cut the company tax rate was motivated by personal greed.
The attempt failed amid revelations Turnbull has donated his prime ministerial salary to charity, a move he had never sought to publicise.
But the parliamentary sitting week would get far worse for Shorten, with intense pressure mounting behind the scenes on his grasp of the leadership.
Asked at a press conference if he would reverse the tax cuts legislated last year for companies turning over $10 million to $50 million, Shorten said one word: “Yes.”
This on-the-run policy announcement shocked both Labor backbenchers and his shadow ministerial colleagues alike. There was no consensus. This was a captain’s call.
There was confusion about whether Shorten wanted to reverse the tax cuts for businesses turning over just $2 million a year. Even his supporters in the Victorian Right were worried about going to an election fighting with the business community and telling mum-and-dad business owners that Labor would jack up their taxes and cause financial uncertainty.
Intense pressure came to bear on Shorten as his own faction, the Left and the NSW Right distanced themselves from him just days before the NSW Labor conference. He was forced into a backflip yesterday.
This partial backdown was Shorten’s third humiliation in just two weeks. He had been rolled on his own captain’s call by his colleagues. And it has done little to salvage his standing with his team while further antagonising the business community.
There was an emergency meeting of shadow Cabinet in Sydney. Sources said the mood was excruciatingly “tense” between Shorten and some of his senior shadow ministers.
The timing of the meeting was brought forward by an hour, to 10.30am, which meant key leadership rival Anthony Albanese was not able to attend as he was still en route from Melbourne. He weighed in by speaker phone.
After the meeting, Shorten, accompanied by Bowen and Opposition Finance spokesman Jim Chalmers, announced he would not be reversing the legislated tax cuts. But, in a scrambled press conference, he then said the company tax rate for small businesses turning over less than $2 million a year would increase from its current rate of 25 per cent to 27.5 per cent.
This partial backdown was Shorten’s third humiliation in just two weeks. He had been rolled on his own captain’s call by his colleagues. And it has done little to salvage his standing with his team while further antagonising the business community.
The Turnbull government will now go to an election with the message that Labor will lift both personal income taxes and company taxes for small businesses across the country, such as corner stores and mums who run a start-up from home.
The Business Council of Australia, which has been cautious in its criticism of Shorten, lest he be elected prime minister, was swift in its condemnation of the tax hike.
“The federal Opposition has created confusion and will hurt business confidence with its decision to wind back already legislated tax cuts and enshrine a two-tier company tax system,” chief executive Jennifer Westacott said in a media release yesterday.
“Leaving the rate at 30 per cent for the largest employers and the companies that make the biggest investment decisions is a reckless move that will impose one of the highest company tax rates in the developed world on Australian business.”
It is against the anger of the business community that Albanese, a figurehead of the Left faction, has emerged as their unlikely ally.
He has made it clear to business executives and the media that he would have a more cohesive approach to business, in the vein of Paul Keating and Bob Hawke.
He has made overtures towards the business community and has made it clear that, should he be leader, they will not be Labor’s enemy.
The anger over Shorten’s bungled captain’s call and the flawed process he followed is so great that senior figures in the NSW Labor Right are prepared to abandon support for his leadership before the winter is over.
With the exception of Bowen, the NSW Right is deeply unsettled by Shorten’s “politics of envy” approach to managing the economy.
But the powerful faction does have concerns about elevating the standing of the Labor Left if Albanese becomes federal leader.
The Right has the power to shut down fringe social-justice issues that Left-leaning MPs push.
There are fears from the NSW Right that these issues, such as softening border protection, would rise to prominence and dominate the agenda in a major distraction ahead of a federal election.
But the NSW Labor Right does not harbour any animosity towards Albanese himself, and senior figures on the Right have already made overtures to Albanese’s camp.
Over the years, the amicable MP has carefully cultivated strong relationships with senior figures on the Right, business leaders and the media — and he will rely on these bonds if he decides the time is right to pursue a leadership tilt.
The past parliamentary fortnight has damaged Shorten severely.
If Labor performs poorly in the July 28 by-elections in the seats of Longman in Queensland and Braddon in Tasmania, the man who played a key role in knifing first Kevin Rudd, then Julia Gillard will be in the greatest political fight of his life.
And Albanese will be waiting in the wings to seize the day.