Keating-Shorten split to widen after poll loss review

Labor’s election loss post-mortem is set to widen the schism between Paul Keating and Bill Shorten.

The tensions over the policy mix under Bill Shorten’s, right, leadership spilled over on Tuesday when Mr Keating, left, accused Labor of losing middle Australia. Picture: Gary Ramage

The schism between Paul Keating and Bill Shorten is about to widen as the ALP steels itself for a no-holds-barred review of this year’s election defeat, which the former prime minister has blamed ­squarely on the party’s loss of ­middle-class voters.

The Australian understands that several Labor figures have ­offered similarly scathing assessments of the party’s taxation and franking credits policies, as well as its handling of negative gearing changes, saying the issues were central to the collapse in Labor support among affluent and aspirational voters.

Former South Australia Labor premier Jay Weatherill and former Gillard government minister Craig Emerson are co-ordinating the review, which will report to the party’s executive and new leader Anthony Albanese in October.

The Australian has been told a decision has still not been made as to whether the report will be ­released publicly.

Mr Weatherill declined ­requests for an interview yesterday, saying only that he was working through the material collated so far. However, senior Labor figures have told The Australian that the report is likely to make bracing reading for Mr Shorten, with it likely to mirror the central thrust of Mr Keating’s criticisms.

The tensions over the policy mix under Mr Shorten’s leadership spilled over on Tuesday when Mr Keating accused Labor of losing middle Australia. Backers of Mr Shorten rejected the analysis, saying they were “surprised and disappointed” the former prime minister had made the claim after backing Mr Shorten so strongly during the campaign.

Mr Shorten yesterday declined to respond to the Keating critique. One party figure said Mr Shorten “doesn’t really want to get into an argument with a Labor legend”.

However, sources within the party who feel sympathy for Mr Shorten took issue with Mr Keating’s claims, pointing out that Labor’s two-party-preferred vote had held up better than Mr Keating’s did when he was defeated as prime minister by John Howard in 1996. “It’s surprising and dis­appointing, given how much he’d backed us in,” one source said. “Particularly since Bill’s two-party preferred of 48.47 was higher than Kevin in 2013, Latham in 2004 and Keating in 1996.”

At the 1996 election, Labor received a two-party-preferred vote of 46.37, ending 13 years of Labor rule. Under Mark Latham in 2004, it received a two-party-preferred vote of 47.26, and 46.51 at the 2013 election when two-time prime minister Kevin Rudd lost to Tony Abbott.

In his interview on Tuesday, Mr Keating pinned Mr Shorten’s failure on drifting too far from the centrist policies of the Hawke-Keating era. “If you’re talking about the Labor Party and why it lost the election, it failed to understand the middle-class economy that Bob Hawke and I created for Australia,” he said.

The Australian understands that these same criticisms have been made repeatedly to the Weatherill-Emerson report, with current MPs telling this newspaper that Labor was “deluded” if it thought the problem was that its policies were simply too broad or too complicated.

“The problem was that some of them were just bad, or they were seen as bad in principle by more well-off voters who had a fundamental philosophical problem with the idea of going after ­people’s nest eggs, even if they were living comfortably,” one MP said.