Battle-hardened Bligh takes no prisoners

IS Anna Bligh in wonderland? Opinion polls, the pundits and, privately, some in her own party speak to the seemingly inevitable: that her creaking, 12-year-old government is political roadkill and it's only a matter of time until the voters of Queensland get to pronounce the last rites.

The state budget is inked in red, Queensland's once rock-solid credit rating is stubbornly pegged below that of NSW, the supposed financial basket case, and the home-proud denizens of Brisbane no longer have the comfort of rising property values as they pay higher rates, utility bills and ever more in state charges, not to mention the mortgage.

Opposition Leader John-Paul Langbroek regularly outpoints her as preferred premier and the ALP's primary vote has crashed into lethal territory below 30 per cent in Newspoll.

Then there's that smell emanating from what used to be the elixir of brand Labor. It nearly knocked over Mike Rann in South Australia last March, left Julia Gillard clinging to minority government federally and destroyed the best-regarded outfit of the lot when John Brumby was bundled out of office in Victoria.

Kristina Keneally is given a snowflake's chance in hell when her date with the voters of NSW arrives in three months.

Really, it's hard to see how things could get worse for Bligh.

So why does the first woman to be elected premier in Australia still think she has a chance of pulling a second election out of the fire? Is she kidding herself?

"You don't go into a fight without thinking you can win it," she tells Focus, sipping milky tea on the sofa of her corner office overlooking the Brisbane central business district. "And I'm going into 2011 with a lot of optimism and confidence. We have had some tough decisions to face, we faced them, they are behind us, and we now have the job of . . . ensuring that those decisions deliver."

Nothing has caused Bligh more pain than privatisation and her challenge, when she kicks the sand off her feet in the new year and gets back to work, will be to wring a political return from it.

Bligh portrays the $14 billion-plus selldown of state assets as bitter medicine that had to be swallowed. The voters clearly have another take on it. After Queensland lost its triple-A credit rating last year, only days out from the state election that delivered a fifth successive term to the government she inherited from Peter Beattie, Bligh abruptly ended her electoral honeymoon by announcing the asset disposals and cancelling a popular rebate on petrol excise.

The opposition went for the throat, accusing Bligh of lying her way to what was, by other measures, a remarkable victory.

The Premier acknowledges that the Queensland Treasury Department was modelling the asset sales ahead of the election, "but no more than usual". She denies, outright, that the decision had been made before she was sworn back in to office.

It hardly seems to matter: the perception stuck and Bligh has spent most of this term on the back foot. The supreme irony is that the grief came mostly from her own side of politics.

Media commentary, including that of this newspaper, was largely supportive of Bligh's position that the Queensland government had better things to do than run iron-ore trains in Western Australia through rail freight operator QR National, or the port of Brisbane, the two headline sale items.

The avowedly free enterprise Liberal National Party was put in the uncomfortable position of bagging the sales, but not privatisation per se.

Langbroek's line is, essentially, that the timing was wrong and taxpayers were dudded by a fire sale conducted with undue haste in unfavourable market conditions.

He may well be right. But elements of the union movement, especially the left-wing Electrical Trades Union and the Australian Manufacturing Workers Union, were far more effective in galvanising popular opinion against the asset sales, and by direct extension against the Labor government.

A Galaxy poll last month showed 83 per cent of surveyed voters remained opposed to the sales. The writing looks suspiciously like it is on the wall for Bligh: no matter what, the punters have made up their mind.

Bligh concedes she has made mistakes. ''Privatisation is one of those issues that is never easy and no one ever likes it," she says. "And, yes, it is easy to sit here now, 18 months down the track, and think of different ways you could have done things and different points."

With the sales virtually complete - after the QR National float was bedded down last month, the government unloaded the tolling business of Queensland Motorways to state-owned superannuation and investment fund QIC, leaving only the sale of the Abbot Point coal terminal in north Queensland - she is looking ahead to clear air.

Her strategy will be to regain the triple-A credit rating next year, salt enough away in the war chest to bring down a user-friendly budget in May, heavy on cost of living assistance for families feeling the pinch of higher water and electricity prices, and bring forward from 2015-16 the projected return to surplus of the state budget to demonstrate she has finally got a handle on the financial mess into which Queensland stumbled.

Bligh is playing a long game and the wonder is that she is still in it. Her saving grace, internally, is also the government's achilles heel: so pathetically shallow is the gene pool that Bligh remains head and shoulders above a very ordinary bunch in her government.

Her deputy and Health Minister Paul Lucas has been tarred by his bumbling; Treasurer Andrew Fraser has as much skin in privatisation as the boss; and the only other realistic contender, Attorney-General Cameron Dick, has served less than a term in parliament.

Bligh's failure to renew her tired and patchy ministry is conspicuous, and will feed into the "it's time" factor that was central to Brumby's surprise defeat last month in Victoria.

She, understandably, prefers to cast back to last year and what she calls "our historic win". "There is an electoral cycle but I don't think it is inevitable that it has a defined timeframe," she tells Focus.

"There are examples in the not too distant past [of] the electorate electing a government on the basis of who they believe is best . . . and there are a number of factors that are very different in the Queensland environment than in Victoria and I don't think you can draw the same conclusions.

"But I am very conscious that there will be some factors in the voters' minds at the next election that increase that . . . 'it's time' factor with every election you face. In my experience it takes more than one thing to dislodge an incumbent government."

To afford her some credit, the going was certainly good for Beattie when he handed over to her in 2007 after nine years at the helm. The looming global financial crisis hit Queensland harder than just about anywhere in the country.

The state economy's heavy reliance on inbound tourism, an early casualty of the meltdown, and coalmining, which took a heavy hit before the China growth engine kicked back in, slammed government revenues when spending had been ramped up to record level on infrastructure. Bligh says she could have pared back the construction program, but that would have been at the long-term expense of overdue hospital, road and school upgrades. Jobs would have been sacrificed at the worst time possible.

Or she could have taken a leaf out of her predecessor's playbook, performed a Beattie-flip, and scaled back the assets sell-off.

As she points out, that too would have defeated the purpose of the exercise. The asset sales were not just about putting cash on to the budget bottom line, they also reduced the obligation of the state to keep spending on the businesses. QR National, for example, required billions in ongoing capital injections for new rolling stock.

While Bligh's message to voters is the alternatives to privatisation were worse, Labor fears they have simply stopped listening. The Premier's frustration is palpable.

"I would imagine you would get 80 per cent of people saying that they disapprove of increased taxes, you would get 80 per cent of people saying they disapproved of massive service cuts, less for hospitals and less for schools," Bligh says.

"The alternatives, in my view, were more unacceptable than privatisation. Unfortunately, the polling companies don't poll on alternatives."

STATE Labor's limited options in Queensland won't necessarily preserve Bligh's position. Should she continue to be a drag on the party's vote, she will be cut down. The survival instinct prevails over loyalty every time in politics.

Still, Bligh is above all a fighter. She kept at it last year when her chances looked bleak, and she will go down swinging again, be it against an internal coup or at the polls in 10 to 15 months.

Bligh has nothing to lose, and a new-found adventurism is emerging in her leadership, especially in her dealings with the Labor brethren in Canberra.

Her position as ALP national president, which she will hold until August, has not stopped her from taking the gloves off with Gillard in a way she wouldn't have with Kevin Rudd as PM.

Notably, she pulled her punches when the feds, under Rudd, trampled her political interest by pulling the pin on the Traveston Dam north of Brisbane.

Queensland was one of the first states to sign on to Rudd's hospital funding reforms and Bligh kept a lid on her concern about the effect of the ill-fated mining super profits tax on the state's emergency coal seam gas industry.

No longer. Bligh this week spoke up on mark II of the mining tax, the MRRT, backing the miners' insistence that the peace deal Gillard brokered with them covered all state royalties, existing and future, allowing them to offset increases in these charges against the MRRT.

In doing so, she lined up with the Liberal Premier of Western Australia, a somewhat unexpected reinterpretation of Rudd's co-operative federalism.

"We are a sovereign government and as a state will reserve the right . . . to make our own royalty arrangements regardless of anything the commonweath does," Bligh says, without a trace of remorse.

Expect more biffo. As Bligh knows full well, taking a stick to the southerners never did a Queensland premier any harm at home. Ahead of the MRRT fuss, she put federal Labor on the spot by acknowledging, in her capacity as national president, that the future of the Christmas Island detention centre will be open to question after the asylum-seeker boat disaster.

And her pointed observations about the "NSW disease", which has consumed two premiers during the time she has been in the job and left Keneally lurching towards the mother of all hidings in March, reveals her growing willingness to step on toes.

Bligh is clear-eyed about her limited prospects of surviving the coming reckoning for Labor in Queensland but determined to maximise her chances. Much needs to go her way, and wrong for the opposition LNP.

As Bligh says, her voice suddenly brightening, it's going to be an interesting year ahead.