Broadband is Prime Minister's first win

JULIA Gillard still operates with Kevin Rudd's legacy, seeking to adapt it to her own agenda.

JULIA Gillard finishes the parliamentary year bruised yet dominant. Passage of Labor's National Broadband Network is highly symbolic; it highlights Gillard's ability to prevail, make minority government work and take the fight to the Tony Abbott-led Coalition.

As Prime Minister, Gillard is fighting for her political life. Beneath her impressive composure lurks an elemental struggle to save her government's credibility and prove that minority government can deliver. The jury remains out. But nobody, including Abbott, doubts Gillard's tenacity as she fights on multiple fronts: to carry the crossbenchers, to expose the Coalition's negativity, to articulate a meaningful reform agenda, to stem the voting haemorrhage to the Greens, to devise an effective decision-making system for Labor in office and to establish her credentials on the international stage. Yes, she has waged these battles simultaneously.

In his final parliamentary summary Abbott said: "I should acknowledge that the Prime Minister has been a ferocious competitor this year and I should congratulate her on her success. She may not have won the election handsomely but she certainly won the negotiation, and that takes a considerable skill."

Leader of the House Anthony Albanese, previously a firm supporter of former leader Kevin Rudd, said of Gillard: "The new Prime Minister has made an extraordinary beginning. She has, in my view, a capacity as a parliamentarian greater than any other of the 150 members of this House of Representatives." Gillard's pivotal backer Treasurer Wayne Swan said the Prime Minister "is an extraordinary person, the toughest, most focused and most capable person that I have ever worked with."

Get the drift? Gillard is Labor's hero. After destroying Rudd's leadership, Labor's entire fate hinges on Gillard. Don't think Labor has the option of a viable execution of Gillard this term for another alternative. That is self-delusion, the route to both self-loathing and self-destruction. The supreme irony, however, is that the NBN is Rudd government policy. In terms of leadership, its origins lie with Rudd, not Gillard.

At week's end Labor was desperate to mobilise the momentum from passage of its NBN legislation. By cutting the deal with independent senator Nick Xenophon and senator Steve Fielding, Gillard was true to her deepest instinct: do whatever it takes to legislate her policies. She retreated to release a selected summary of the NBN business plan that Labor had told the world could not yet be publicised. On display was Gillard as fixer, negotiator and deal maker. Note, however, that Gillard is desperate to transcend this brand. Being a superb fixer is not enough to redeem Labor, and Gillard knows this. With the polls roughly flat-lining and the nation reserving judgment on the new government, Gillard must become a leader who is changing Australia, a PM with genuine policy authority. Her desperation for this mission now pervades her declarations.

Emboldened by her NBN success, Gillard taunted the Coalition during the last question time of the year: "This parliament is poised to deliver the biggest micro-economic reform agenda in telecommunications that this nation has ever seen: a reform agenda 30 years in the making, a reform agenda actually based on competition policy. What does the Leader of the Opposition stand for except 'stop this', 'end that' and 'wreck the other'? Is he a man who has never had a positive idea or plan for the nation's future?"

She declared politics today to be a "battle of ideas about this nation's future".

Gillard knows that only tangible results can verify her prime ministership. Labor propaganda about NBN's merits will be ceaseless and localised. Again, listen to Gillard: "A local printer in Cairns is constrained by the fact it takes four hours to shift files down to Brisbane. The NBN will fix this. In Gladstone they're setting up a Korean Language Centre with children both here and in Korea. Only possible with broadband. In Childers, the largest tomato grower in the southern hemisphere wants to cut down on travel, improve ordering and set up reliable video conferencing. Yes, only broadband can do it. That's the transformative power of the NBN."

Gillard argues the NBN is the contemporary reform to match past reforms such as the dollar's float, tariff reductions and financial deregulation. Such comparisons are indefensible. She said, in effect, the public monopoly was justified because "the private sector could not do the job" and NBN was a commercial operation paying its way. The defect in this line, as opposition spokesman Malcolm Turnbull argues, is that such a large public equity commitment demands a transparent cost-benefit analysis. This is the principle Labor has championed but now violates. It is also being violated by the independents and Greens who voted for Labor's bill.

The sublime irony yesterday was that as the Senate voted for the bill, Reserve Bank governor Glenn Stevens, giving evidence to the House of Representatives economics committee, repudiated the government's position.

Asked by Liberal MP Kelly O'Dwyer what hurdles such projects should meet to warrant taxpayer backing, Stevens in reply, while admitting that the public sector might assume projects the private sector was unprepared to risk, said: "But there ought to be, of course, a proper cost-benefit analysis of that case." Of course.

At times Labor's arrogance scaled the peaks of infamy. The opposition, Gillard told parliament, was not entitled to more information on the NBN because it had no goodwill and was bent on wrecking. So much for the public interest.

Yet this does not deny the important reforms in Stephen Conroy's legislation, notably structural separation of the retail arm and network ownership. Labor is right to hail this victory. As Gillard said Australia had got telecommunications policy "wrong over the past two decades". Gillard is correcting mistakes of past governments: first, the Hawke government's decision (opposed by Paul Keating) to merge Telecom and OTC into a market giant and, second, the Howard government's privatising of Telstra without creating a competitive marketplace.

The NBN gives Labor heart because it suggests the parliament may work and that Gillard may see out three years before the next election. Albanese said Labor had carried 51 pieces of legislation and not a single government bill had been defeated. Yet it is early days.

Gillard must extract maximum dividends from each success given recent caucus concern about Labor's performance. To be precise, she must lift Labor's poll standing next year, otherwise pessimism will take root. So the PM had a message this week to caucus and cabinet: she has an ambitious 2011 reform agenda in the form of a strong economy heading to surplus, a carbon price, a mining tax, a Murray-Darling basin reform, health and education for an inclusive society.

Gillard's aim is to press ahead despite the uncertainty of numbers. It reflects a personal decision: she must look strong and eliminate any scent of weakness. Labor's problem, however, is the ghost at its table, the Foreign Minister and the Rudd legacy.

This week was the third anniversary of Rudd's 2007 election victory over John Howard, the third time in the past 80 years that Labor had come to power at a general election after Gough Whitlam in 1972 and Bob Hawke in 1983. But Labor was struck dumb. There was no celebration. Who mentioned the grand occasion and the third anniversary? Who used the event as a reference point? Abbott, would you believe.

This is a government confused about its history and its record. Is Labor proud or embarrassed? This question is hopelessly entangled in personalities and animosities. In the past three years, Rudd governed for 31 months and Gillard for five months.

The irony of Gillard's championing of the NBN is that Rudd and Conroy stamped it. It was Rudd who first presented the NBN as proof of Labor's commitment to modern infrastructure.

So, Gillard still operates with Rudd's legacy, seeking through time to adapt and modify the framework and shape her own prime ministerial agenda. It is a tricky task because, as an activist PM, Rudd's fingerprints were everywhere.

This conundrum is stark. Labor refuses to credit Rudd because it chose to destroy him; yet the party cannot deny Rudd because it still runs on his agenda. It was Rudd who orchestrated the fiscal stimulus, the carbon price, health and hospital reforms, the NBN and the infrastructure program.

For Labor, Rudd must remain a symbol of what went wrong. But the public is confused; indeed, it seems unsure of exactly what did go wrong. The task for Gillard next year is to break free from this conundrum. If she falters, the public will be unforgiving.