Julia Gillard's economic reform a bit hard to believe

JULIA Gillard intends to rise up and fight "economic Hansonism" in order to protect the reforms of the past 25 years.

She rightly credits Bob Hawke, Paul Keating and John Howard for pursuing these reforms.

In economic terms, this is an allowable form of protectionism: protecting the bipartisan legacy of post-Malcolm Fraser Australia, not to mention the economic prosperity that came with it.

But where does this attitudinal positioning by Gillard leave Kevin Rudd, who not all that long ago panned Howard as a reforming laggard and claimed that a new epoch was upon us, courtesy of the global financial crisis? Rudd claimed that neo-liberalism was dead and state power needed to be used to "save capitalism from itself"'. Please.

That sounds a lot more like what Gillard (with a fair degree of verballing) claims Joe Hockey and Andrew Robb are arguing for (regulating the banks when setting interest rates and putting limits on the floating of the Australian dollar) than her former boss's world view. We really are living in unusual times.

If Gillard is serious about embracing neo-liberal reforms, perhaps it is a good thing that Rudd will now be spending most of his time traversing the world stage at taxpayers' expense as foreign minister. And its just as well Gillard appointed Craig Emerson as the trade minister. Emerson was Hawke's senior economics adviser during the era of great reforms, and he holds a PhD in economics to boot.

Rudd can strike a pose while Emerson strikes agreements in the national interest. But Gillard's background, philosophical underpinnings and policy advocacy up until now all make her new-found interest in pursuing market-based economic reforms look like a road to Damascus conversion by the confessed atheist. It is a little hard to believe.

Gillard is a member of the Labor left and has been since she entered parliament. Unless Labor's factional system is totally devoid of philosophical meaning, that should put her at odds with the sort of reform agenda she is now advocating.

At university, Gillard was the secretary of the Socialist Forum. She has described Whitlamesque policy measures as inspirational to her ambitions for a political career. As a shadow minister, Gillard was at the forefront of selling Mark Latham's medicare gold policy, which was anything but a market-based approach to healthcare.

As a Rudd government minister, Gillard wound back market-based industrial relations reforms -- not just Work Choices but reforms from the Coalition's 1997 IR package negotiated with the Democrats, as well as IR reforms from Keating's time as prime minister. I am not even going to detail the non-market-driven nature of the National Broadband Network.

The $43 billion rollout is government-funded and even the $17bn of private sector investment we are told is coming won't be a genuine partnership (if it happens). The private sector is buying debt in the shape of government bonds, which means it doesn't share the risk of the NBN, as would be the case in a fully fledged public-private partnership.

So what has changed for Gillard? Why the sudden embrace of the market? At least rhetorically, we await any substantive embrace that might follow her speech to the Australian Industry Group on Monday evening.

Political opportunism is the answer, pure and simple. Gillard's strategists have witnessed the Liberal Party under Tony Abbott's leadership slowly transform into a conservative party with limited market liberalism.

The opposition shift has been caused by three factors: Abbott's self-admitted lack of interest in economics, his desire to keep the Coalition strong and therefore cede ground to the Nationals on some policy fronts (most Nationals are virtually agrarian socialists) and old-fashioned oppositionist politics: taking popular stances even if they contradict Liberal economic arguments.

I find it hard to believe that Gillard, after helping craft the government's spendathon policy response to the GFC as a member of the gang of four, has unleashed the real Julia now.

More likely the new reformist Julia is just an image that she hopes will be seen as decisive and economically sound: an approach designed to garner support. It's a bit like Gillard's support for publishing school league tables when she was education minister.

Doing so was a good idea, and it was more than the Liberals ever managed to achieve in education during their time in power. But what really matters are the reforms that should follow the release of such information to parents. For example, a voucher system that would allow parents to freely chose between schools, based on performance.

What should worry anyone supportive of major economic reform, whether we are talking about tax reform, IR reform or changes to policy setting to encourage productivity, is that achieving it is difficult and requires a resolve Gillard and Labor haven't yet demonstrated. And the opposition provide little comfort as a hard-hitting alternative.

Saying you want reform is sometimes popular; enacting it is a different story.

That's because actually doing reform is hard. It requires the setting out of complex arguments. And it works best when bipartisanship can be achieved. How will Gillard add reforming substance to her recent rhetoric when the opposition opposes what she proposes? And how will she carry the argument with the public if she doesn't even believe it herself?

Labor rolled Rudd as leader when it fell behind the Coalition for two consecutive opinion polls after three years of being out in front.

Yesterday's Newspoll has Labor starting Gillard's reform process already trailing on the two-party vote, and with a record low primary vote. That hardly suggests it will have the resolve to carry reforms through to an implementation stage.