Kevin in the middle: a hotter place

Kevin Rudd has seen his environmental strategy fall apart, eroded by the Bob Brown-led Greens, and then by Tony Abbott. Picture: Jason Bitneris

Together, Tony Abbott and Bob Brown have destroyed some government policies

THE centre cannot hold. Here in four words is the dramatic story of the past year's politics defined by Kevin Rudd's climate change retreat with the threat this poses for Labor at the coming poll.

Labor is losing votes to the Coalition on its Right and the Greens on its Left. The middle ground that is the bedrock for successful Labor governance and policy reform is being pulled apart. This is a new phenomenon and a negation of the politics of the past generation.

Recent Newspolls show Labor's primary vote has fallen to 35-37 per cent, with the Coalition lifting to 43 per cent and the Greens surging towards 12 per cent. The Right and the Left are the new winners.

An analysis of Newspolls across 18 months shows Labor's lost primary votes going 60 per cent to the Coalition and 40 per cent to the Greens and others.

Tony Abbott and Bob Brown savage Labor from opposing polarities with conflicting messages. But their effect is self-reinforcing. The centre is weakening; votes are moving to the polarities; populists on both the Right and Left carry sway.

This undermines the basis for middle-ground Labor reformism. If this phenomenon became the new trend, the policy consequences would be far-reaching.

Labor's self-excuse is that votes lost to the Greens will return via preferences; even if true this overlooks that losses in Rudd's primary vote betray a sharp lack of confidence in his reforms.

The task facing Rudd, Julia Gillard and Wayne Swan at the election is to rebuild the Labor centre ground.

The event that inaugurated the new politics came on December 1 last year, when Abbott became Liberal leader and the Liberals switched to defeat Labor's Carbon Pollution Reduction Scheme. It was a disaster for centre-ground politics. This triggered Rudd's abandonment five months later of his climate change legislation for the declared reason of being unable to persuade the Coalition to vote for it.

This event remains misunderstood. In essence, it is a shared victory for the Right and the Left, Abbott's Coalition and Brown's Greens. Rudd's emissions trading scheme was discredited by the Greens and then destroyed by the Coalition.

Dancing on its grave, both Abbott and Brown have been rewarded. Rudd's investment in this reform was immense; his model was based on two years of policy work that involved the Garnaut report, the green discussion paper, the white policy paper and the final deal with Malcolm Turnbull.

During the past generation such reform commitments (witness tariff, tax, privatisation and many microeconomic reforms) have been carried on the strength of the centre.

On this occasion Rudd came to the brink of victory when the Coalition party room initially backed the deal under Turnbull, only to change its mind.

Destroying Rudd's policies has enhanced the authority of Abbott and Brown with their own constituencies.

For Abbott, Rudd is a reckless economic manager putting Australia at risk with his ETS and resources tax. For Brown, Rudd has failed to honour his convictions and the Greens now campaign as the only party willing to price carbon.

The success of Bob Hawke, Paul Keating and John Howard as prime ministers lay in their ability to construct a shifting centre ground. But Rudd's centre ground has shrunk, putting his policy agenda under chronic threat.

Under Abbott, any hope for future Labor-Coalition voting deals on policy reforms seems remote. Any re-elected Rudd government is likely to face the Greens holding the Senate's balance of power, raising the prospect of a de facto Labor-Green legislative alliance, a dangerous but perhaps inevitable move for Labor.

Last year Rudd and Climate Change Minister Penny Wong strove to construct a consensus across the centre and, for much of the time, had the Business Council of Australia, Australian Industry Group, the trade unions, the financial sector, moderate environmental groups and the Turnbull wing of the Liberal Party in support of their ETS. This coalition should have prevailed yet its conviction faltered. The Left defected first and then the Right.

Rudd initially was ruined by the forces he helped to mobilise, the moral imperative on climate change. His unconditional policy pledge to reduce emissions at 2020 by 5 per cent below year-2000 levels was widely thrashed as tokenism that required little sacrifice to achieve and revealed Australia as an "easy rider" among nations, unwilling to shoulder its responsibility for emission reductions. Such perceptions became entrenched. Each of them was demonstrably false.

But the Left-liberal establishment, led by green groups and the media, seized this idea to discredit Rudd's policy. It became an article of faith, almost a standard joke in media coverage, led by universal sentiment in the ABC, that Rudd's 5 per cent target was pathetic and would not impinge on the problem. (With this writer sometimes guilty of such error.)

In fact, Australians were being asked to do more than Europeans. The 5 per cent target equated in per capita terms to a 27 per cent reduction for every Australian. Labor's initial policy of a 5-15 per cent reduction range translated in per capita terms to a 27-34 per cent reduction. This was tougher in per capita terms than either theEU or the US, though the 2008 white paper said such efforts were "broadly comparable".

Put another way, Europe's 20-30 per cent reduction pledge below 1990 levels equated to per capita reductions at 24-34 per cent while the US pledge to return to 1990 levels equated to a per capita reduction of 25 per cent below. These efforts were less onerous than Australia's 5 per cent target that equated to a 34 per cent per capita reduction below 1990 levels.

The Garnaut report spent dozens of pages arguing per capita is the fairness way to assess national performance because it accounts for population growth. Garnaut made the obvious point that the reason Australia's targets in absolute terms were much less strident than others was because population growth had been taken into account.

Further evidence about the difficulty of Australia's 5 per cent target came from the head of the Climate Change Department, Martin Parkinson, in a speech of March 31 this year.

Parkinson said Australia's baseline emissions "are forecast to rise strongly over the next decade" to 121 per cent of 2000 levels by the year 2020. Warning of the "sheer scale" involved in meeting the bipartisan 5 per cent target, Parkinson said it was daunting but not impossible. It could be achieved only by pricing carbon.

In summary, the evidence was that Australia's 5 per cent (let alone the conditional targets of 15 per cent and 25 per cent depending on global progress) was a meaningful, responsible and justified target.

This analysis was plain as day in the Garnaut report and the white paper. But it was never explained or pursued with commitment by Rudd Labor. Why?

Because it meant admitting that Labor's targets involved hurt, sacrifice and difficulty. Port Jackson Partners economist Rod Sims said recently: "I have said privately to a number of politicians that I am amazed that the current government kept talking of a 5 per cent absolute cut as its target rather than using the 25 per cent per capita target as recommended by Ross Garnaut. Perhaps the government does not want to scare the voters. Each Australian will need to do more to meet our minus 5 per cent target than the average European will to meet their 20 per cent reduction target."

Labor's political tactic of pretending its targets were "trouble free" was absurd. It invited the liquidation of its policy on grounds that it was fraudulent.

In March this year, social researcher Hugh Mackay said: "The signs of disenchantment on climate change policy came as early as the first half of 2008. People expected that Rudd would recruit them in response to climate change. But eventually the public decided 'he's not serious'."

In effect, Rudd allowed the Greens critique of his policy to prevail and invade the mainstream: that he wasn't serious.

This was reinforced by two other constituencies, the scientists and the economists. The scientists demanded far higher cuts on the basis that "time is running out" and the economists said Rudd had over-compensated households and industry and that his scheme failed the economic responsibility test.

The Greens played Labor off a break. Their plan was to paint Rudd Labor as too brown. It

worked a treat. The more compromises Rudd made, the more purist the Greens looked. They opened their arms and welcomed the believers, the idealists and the disillusioned walking away from Labor.

The media followed its strange golden rule: the Greens were almost never criticised as they assaulted the only policy on offer to combat global warning. One senior Rudd minister remarked: "The environmental movement in Australia is still geared to a Liberal government. It is oppositional in nature. Its aim is build its own support and not take responsibility for policy advances."

It is a cardinal insight. On this issue the perfect become the enemy of the good. As environmental groups melted away and the Greens rejected Rudd's ETS their popularity increased and they won media kudos for their moralism.

However, all such events were mere prelude to the slaughter from the Right. Rudd's tactic was to carry his historic ETS with Coalition votes. He needed the Turnbull Liberals as his legislative partners. Turnbull was a passionate public advocate of an ETS and Rudd's policy made tactical sense. Yet there was a problem.

As usual, Rudd wanted the best of both worlds; he wanted the Liberals to legislate his ETS and he wanted to exploit climate change as an instrument to discredit the Liberals in an election year. A difficult and contradictory ask. These competing objectives were almost achieved, but the wheels came off Turnbull's cart.

It was the grassroots conservative revolt that destroyed Turnbull and then destroyed Rudd's policy. This revolt was based on an utterly opposing interpretation of the ETS to that held by the Greens. The populist Right denounced Rudd's policy because it would ruin the economy.

In the words of Nick Minchin, then Liberal Senate leader, Rudd "was asking every Australian to pay a huge price [when] it will do nothing for the environment" since Australia contributed only 1.4 per cent of global emissions. The bills, Minchin said, constituted "a massive and damaging impost on the Australian economy" notably its resource sector.

The Nationals were bent on defeating the ETS. Its populist spearhead, Barnaby Joyce, said: "Everywhere there is a powerpoint in your house, there is access to a new tax. A new tax on ironing, a new tax on watching television, a new tax on vacuuming. If you go to the supermarket Kevin will be in the shopping trolley." The policy the Greens dismissed as pathetic had become an agent of economic destruction in the Right's narrative.

Once a group of Liberal senators decided it was their solemn ideological duty to defeat the ETS, the politics reached an incendiary peak. One senior Liberal said: "This became the greatest potential crisis in the history of the Liberal Party."

Aware that the long-run unity of the conservative side was at stake, Abbott changed his position, deserted Turnbull and told his colleagues the only hope for holding the Liberal Party together and saving Coalition unity was to reject the ETS.

It was the unity imperative within the Right that shattered Rudd's plan to recruit the Liberals as legislative partners.

From this moment Abbott led the Coalition on to a different ideological and strategic path. His aim was to sharpen the policy and philosophical choices. Abbott rejects many of the orthodoxies supposed to govern our politics.

A political grenade thrower, Abbott felt sure Labor was weaker than it looked. He believed Rudd could be destabilised by a political mugging. Once this theory was verified by Rudd's ETS retreat, Abbott was emboldened to repeat the tactic on the resources super-profits tax.

Will Abbott and Brown continue to thrive from their opposing positions and force Rudd Labor into more unpalatable concessions? Is the political model created by the ETS crisis the new norm or the exception? This question is fundamental for the election year.

The combined ability of Rudd, Gillard, Swan and Lindsay Tanner to re-establish to the authority of the political centre should not be underrated. Their future depends on it.