It's not Rudd's strength but his weakness that matters

KEVIN Rudd brings a new brand of governance to Australia marked by political control yet policy compliance, a contradiction at the heart of Labor's rule.

KEVIN Rudd brings a new brand of governance to Australia marked by political control yet policy compliance, a contradiction at the heart of Labor's rule.

There seems no end to paradoxes Rudd has wrought. His control over his government is driven by a compulsive, activist and driven personality yet Rudd has neither remade the Labor Party nor recast its policy or philosophy. Indeed, Rudd accommodates himself to the party as much as the party accommodates itself to Rudd.

The claim that Rudd is Australia's most powerful Labor Prime Minister is false since both Bob Hawke in the 1980s and Paul Keating in the 90s were not just supremely dominant within the party but able to change its direction, the real test of authority.

The supreme paradox of Rudd's rule is that the power centralisation he exerts (branded by former ALP minister Robert Ray as the symbolic manifestation of Nelson's column) is sustainable only because of the sheer orthodoxy of his policies, their acceptability to the party and their success with the public.

The real issue with Rudd is not his strength but his weakness. The weakness is concealed by control and activity. The mistake in judging his government is to confuse control with real authority.

Rudd is an activist but not an innovator. His political control delivers compliant policy amid seamless interest group appeasement beloved by state Labor governments. Rudd talks of evidence-based policy but always delivers highly political outcomes. The gap between his rhetoric and his deeds is widening.

While a genuine policy wonk, Rudd is a highly conventional thinker. Indeed, the master modernist often seems locked into ideas from the past. Every major philosophical step resonates with Labor's faiths, old and new: an interventionist government, more economic controls, belief in state power, repudiation of free market excesses, an expansive nation-builder, champion of more labour market regulation, a utopian Christian socialist seeking a better society with better behaved people, a moralistic crusader for climate change mitigation and a multilateralist seeking global concord from economic co-ordination to nuclear weapons restraints.

His friend and former boss, Ross Garnaut, captured the contradiction in Rudd's character when he branded Labor's emissions trading scheme as "one of the worst examples of policy-making we have seen on major issues in Australia". And Garnaut is a supporter! This does not point to a government of quality policy.

The politics of climate change work for Rudd but the actual policy design is seriously impaired.

Research company ANOP chief Rod Cameron warns: "The ETS is essentially a polling issue. But when the public sees that there is a cost then support will fall dramatically."

The sources of Rudd's power remain poorly analysed. He became leader in 2006 without a factional power base, an unusual achievement. His path to power is utterly different from his ALP predecessors. Coming from a farm in Queensland, Rudd was never tribalised in the party or the unions. His conversion to Labor was intellectual during the Whitlam age.

He came to leadership via foreign affairs, an unlikely route.

Yet he blitzed his rivals by mastery of modern politics, phenomenal energy, a relentless media campaign and ferocious internal lobbying. Rudd became an irresistible force, a point Julia Gillard recognised. He became leader on a ticket with Gillard that united her left base with a pro-Rudd right-wing breakaway from Kim Beazley. This did not happen by accident: Rudd positioned himself as a candidate with ideological appeal to the Left and Right of the ALP.

This is how he governs as Prime Minister. His cabinet is balanced between Left and Right, very different from Hawke's in 1983.

His policies and his ideological declarations (on the global crisis, neo-liberalism and climate change) are pitched to both Left and Right.

Rudd can be a bold leader but he is bold within these fixed boundaries. Witness his Aboriginal apology, ratification of the Kyoto Protocol, global aspirations on climate change, interventionist industry policy, his fiscal stimulus and bank guarantees. Rudd reinforces Labor faiths; there is no sign he seeks to reinterpret Labor belief.

On the other hand, Rudd is a historic departure by virtue of his modernist style as Prime Minister.

A leading authority on how PMs govern, Pat Weller, says: "Technology is changing the nature of government and Rudd has adapted to this transformation. I think the Paul Keating brand of politics -- 'I'll talk to you when I feel like it' -- doesn't work any more. Prime ministers are now subject to a seamless process of communications. Rudd is a different type of Prime Minister, probably two generations beyond (John) Howard in handling new technology. He makes it look easy and it fits his support among young voters. But we need to be careful of seeing him use technology as a super-control freak. Just imagine Billy Hughes with a mobile phone and the internet!"

Rudd's political ethics set the standards for his government: work, discipline, unity, satisfying intellectual argument. These are his benchmarks.

His ministers know the rules and they follow: the government sets the agenda and ministers must speak with one voice. It originates from Labor state governments during the Howard era.

As Weller says: "Rudd's technique of control seems to have worked darn well. He has lost only one minister (Joel Fitzgibbon from Defence) and kept leaks under control apart from the Godwin Grech event.

"It has been a culture shock for the public service. Rudd is a demanding PM. He wants sound advice and he wants ideas, more so than the Howard government."

But Rudd's is a special type of control, it is control with chaos. There are too many anecdotes from the public service: about advisers kept waiting, urgent issues today that become non-urgent tomorrow, of a failure to determine priorities and, too often, of a lack of people skills at close quarters.

The irony of Rudd's rule is its making by the global financial crisis. For Rudd, it has been a beautiful crisis. It defined him as a strong leader, won the public's regard, united the party and sealed the nexus between Rudd and Treasury chief Ken Henry.

"I think Rudd has had more dealings with the Treasury secretary than other PMs have had with Treasury chiefs," Weller says.

He puts this in the context of the financial crisis and sound relations between Rudd and Treasurer Wayne Swan. The crisis not only changed perceptions of the government but transformed the way the government, notably Rudd and Swan, saw themselves. The risk is that Rudd treasures the crisis for too long and misreads his polling ascendancy.

Cameron says: "Rudd has been very lucky with the GFC. The speed of his response was laudable and that was Rudd at his best. But the electorate is moving on and getting back to normal. That means Rudd must adapt his agenda. The public still doesn't know this man. They like him but his 70 per cent approval rating only masks the fact that people don't know him and don't have a feel for what he's like."

Rudd is conducting a grand experiment in process and content. Decision-making tends to be centralised and focused in the four person strategic priorities cabinet committee (Rudd, Gillard, Swan and Lindsay Tanner) and in bilateral dialogue between Rudd and individual ministers.

But Rudd won't write off decisions in areas that matter to him unless he is fully satisfied, so decison-making is hostage to his time, priorities and personal intellectual conclusions. It can be government by exhaustion. Rudd is less traditionalist than Howard, operates at a faster rate, but makes constant changes in his diary, appointments and agenda. A senior public servant says: "With the government polling well its more centralised approach is seen to be working, but the test is whether the system delivers when the politics start to slip." It's called the Tony Blair reality test.

But the bigger test is how Rudd resolves the contradiction within his government. This is the clash between his softly-softly political tactics of caution, gesture, compensation and appeasement on the one hand and the ambitious, challenging policy goals he constantly invokes on the other. These range from productivity gains, the education revolution, carbon reduction, tax reform, the return to fiscal discipline and the numerous pledged benchmarks in social policy, notably in indigenous progress.

A micro example of the contradiction was displayed this week in the government's rejection of cheaper book imports. A double protectionist decision on behalf of printing unions and the local writers, it put Labor politics before the public interest. As usual with Rudd government decisions, it should prove popular.

A growing list of respected figures has openly questioned, directly or indirectly, Rudd's policy courage: Garnaut, former Australian Competition and Consumer Commission chairman Allan Fels, Access Economics principal Chris Richardson, Productivity Commission chairman Gary Banks. None is a Coalition stooge. Each has an integral role in the policy debate. Such doubts reflects a growing sentiment.

Garnaut warns that Australia must embrace a new strategy of prudence. Henry warns future prosperity depends on long-run policy decisons to manage population ageing, population growth, city planning, climate change, water resources, the communications revolution and expansion of the resources sector in supplying China and India.

Warning about the need to contain public spending Richardson says: "What scares me is the political cycle. Don't let them (the politicians) go to the next election saying this isn't a problem. It is a problem." Richardson says the government's aim of holding spending to 2 per cent annual growth in real terms is tougher than realised.

Meanwhile Reserve Bank governor Glenn Stevens warns that resource sector investment may lift Australia's current account deficit considerably above the "4 to 5 per cent of gross domestic product we have seen on average for the past generation" and that this will need both policy management and "some explaining, not least to the foreign and international oerganisations, many of which have a more traditional view of current account positions".

There is a unifying theme in such warnings: that management of Australia's vulnerabilities demands a government with policy courage credentials. It demands the emergence of tougher character traits within the Rudd government. The "daily announcement" media tactics that typify its 24-hour news cycle management will not suffice.

Of course, Rudd and Swan know this. It is significant that Rudd depicts himself in the Hawke-Keating pro-market reform tradition. His ability to juggle this contradiction between policy and politics should not be under-estimated. In the end, however, successful economic reform needs a political strategy that works with it and not against it. Somehow, someway, there will be a train wreck that resolves the contradiction between Rudd's political tactics and his policy ambition.

With Rudd, the easy judgment is his fixation about political control. The harder judgment, the one that counts, is whether he will be seen as strong or weak.