Gillard poised at a tipping point

THIS week Julia Gillard revealed her toughness in appeasement.

She offered the independents more than expected in a singular campaign to salvage her brief prime ministership and save her career.

Gillard, ever the pragmatist, has adopted a new guise. After a political lifetime thriving in Labor's winner-take-all ethos, factions and deal-making, Gillard overnight has become agent of the new inclusiveness and sweet conciliation demanded by the independents. Cometh the hour, cometh the woman.

Much of this week's debate has been a farce, with talk of new paradigms, multi-party democracy and a kinder, gentler politics. The joke of the week peddled by many columnists is about Australia's alleged paradigm shift. What, pray, will they say after the next election that delivers a clear majority to Labor or the Coalition?

This nonsense has been a huge distraction. Australia's political culture is not about to change. The risk, however, is that the independents will bungle their historic chance to win vital, long-run governance reforms now readily obtainable.

The story, however, is Gillard's emergence in her new guise as change agent. She is shifting tactics on to a reconciliation path (remember, Bob Hawke is her favourite leader) to devise a survival strategy for Labor in its weakened condition. In this project Gillard draws on contemporary Labor practice at the state level most exemplified by South Australian Premier Mike Rann, initially elected as a minority premier and carefully studied by Labor strategist Bruce Hawker, who has been appointed adviser to the independents.

Gillard began the week by declaring she believed the election outcome "reflects the desire for change in the way politics is conducted in our nation". So Gillard, ruthlessly installed pre-poll as PM in a sudden, overnight winner-take-all coup, now offers post-election a new politics of inclusion.

She hails the hung parliament as an opportunity, backs parliamentary reforms, offers a fixed election date in three years, fights to provide the independents with election costings, declares her intention to form a government and says Labor should govern because it is best able to pass bills through the Senate with the Greens holding the balance of power.

How far would Gillard go? She would probably, if needed, offer an independent such as Rob Oakeshott a ministry. Presumably she will draw the line at giving her opponents, the Greens, a place in her government.

Since the hung parliament empowers Kevin Rudd, the appeasement strategy will tempt Gillard to give Rudd what he wants, even perhaps, foreign affairs.

The message from Labor is that minority government can work -- since 1989 there have been 16 minority governments in Australia at state and territory level. There are minority governments in Tasmania, Western Australia, the ACT and the Northern Territory.

It is still impossible to predict the winner between Gillard and Abbott, though the seats are likely to fall 73-72 Abbott's way.

The week, however, belonged to Gillard's astute exploitation of incumbency and, if she prevails, the incumbency advantage will be decisive.

But Gillard was also playing old-fashioned adversary politics as ruthless as ever. She converted the request by the independents for election program costings into a Labor propaganda coup and depicted Abbott's initial refusal to co-operate as evidence of a man with something to hide.

Independents such as Bob Katter were angry at Abbott's refusal and the Greens leader, Bob Brown, undermined Abbott on this issue. At week's end Gillard had made progress in creating the atmospherics of Labor as the party best able to deal with the Greens and independents.

But where, exactly, is Labor heading? Its tactical skill at clinging to office is impressive. The risk, however, is that Gillard is affirming Labor's weakness and accentuating its decline into a situation where, with a falling primary vote, its future is to share power with Greens and independents as the once mighty Labor Party fades into history.

This risk should neither be exaggerated nor ignored.

The failure of the Rudd government during its first term is an event of long-run import. While the Abbott-led Coalition is entrenched as the banner carrier of the Centre-Right, Labor and the Greens fight over a crowded spectrum on the Centre-Left.

In half of Australia Labor's primary vote this poll is at alarming levels: in Queensland 33.9 per cent, WA 31.5 per cent and NSW at 37.7 per cent. It is reduced to one-third of the vote in the two growing resource states.

The strategic question if Gillard forms a government is whether such a government will only deepen Labor's historical crisis and compound its problems of fighting the Coalition on the Right and the Greens on the Left.

Consider the implications of Gillard's concessions. She would be a minority PM relying in the House of Representatives on independent and Green votes with the nine-strong Greens holding the balance of power in the Senate. In this situation she has agreed (along with Abbott) on a fixed date three years hence for the next election, abandoning her right of election timing in a situation where parliament may get close to unworkable and Labor may need to exercise this right.

She has surrendered her right to call a double dissolution, thereby denying herself the power to take deadlocked issues to the people -- the exact failure over carbon pricing that triggered Rudd's demise and probably cost him his job. These constitutional powers of the prime minister are highly relevant in the coming parliament yet Gillard becomes the first PM to surrender them. Sound like strong government?

Labor's nightmare message from election 2010 is that while Labor and Coalition fail to back a carbon price, the Greens, as the only party pledged to price carbon, will keep stealing votes from Labor. Gillard will never propose a carbon bill that satisfies the Greens and the Greens know that however long this structure lasts they are the ballot-box winners. Somehow, some way, Labor must break out of the log jam.

Much of this criticism about the election date also applies to Abbott yet the Coalition's overall strategic stance is much clearer and easier.

The Greens have a far stronger platform in the new parliament to put both Gillard and Abbott under pressure. But it is Labor that will feel the heat. The Greens are emerging in economic terms as the party Labor used to be (pledged to redistribution) and in social terms as the party Labor is afraid to be (backing same-sex marriage).

They are pledged to an industrial re-regulation and trade union rights that Labor will not accept.

On Afghanistan, the Greens will get the parliamentary debate they want and, as the only party pledged to withdrawal, will set the terms of this debate, putting huge pressure on Labor's Left inside and outside the parliament.

With the coming parliament devising a new school funding policy the Greens have staked their ground: they will attack Labor's formula as too generous to private schools and depict themselves as the real champions of public education. On climate change, unburdened by the responsibility of office, the Greens will always have a purer policy than Labor. Labor is sucking close to the Greens, whose preferences it needs to win office, while the Greens keeping stealing Labor votes and seats. Post-election, Greens leader Brown, as well as new Greens MP Adam Bandt, is talking to Gillard. What is this agenda?

Gillard needs to beware any formal arrangement with the Greens, yet she has paraded Labor's superior ability to pass bills through the Senate (on Green votes) as a reason the three independents should install Labor in office. Since when did Senate arrangements determine who governs Australia? Since never, apart from 1975.

The question is whether being PM at this point is a poisoned chalice for Gillard and Abbott. As professionals they both want the job. If Gillard fails there is no certainty she will survive as opposition leader for three years. Both believe they will manage minority government and emerge stronger, and that may happen.

The immediate pressure is on the independents. They have two jobs: to win improvements in governance and to take a justifiable decision to back Gillard or Abbott as prime minister.

On the former, the evidence is not promising. The independents have been scrambling. They need to get this right and secure a parliamentary budget office, campaign funding reform, an independent Speaker, a debates commission and government advertising reform. They need to inject fresh blood into the House of Representatives as an institution.

Their written requests, so far, fall short of the mark.

On their second job, delivering stable government, they have taken refuge in process.

It is by no means certain that Katter, Tony Windsor and Oakeshott can stick together. Making a commitment to Gillard or Abbott defies the essential meaning of being independent.

Abbott's best prospect, as shown by Newspoll, is that their own electorates favour the Coalition over Labor. On the other hand, Gillard has a trump card: the Treasury costings are likely to show a black hole of some dimension in the Coalition program.

Every sign points to a period of weaker government delivering poorer policy. If this doesn't work, the nation should not fear another election to deliver the stable government being much discussed.