Post-election, we'll be heading for a train wreck

IT is a bizarre 2010 election campaign weak on big ideas and heavy on survival politics.

There is the suspicion that Australia's political system is heading for a train wreck post-election.

A long shadow has fallen across the elevation of Julia Gillard. Indeed, the prime purpose of the Gillard coup against Kevin Rudd was cast into doubt this week with her desperate recall of Rudd to the campaign trail.

Gillard was made leader on June 24 for one reason only: to win the election that Labor's power brokers were convinced Rudd would lose.

In the weeks after the coup the party was consumed, literally, with stories of Rudd's appalling behaviour, his personal and political failings. His political corpse was devoured with a savagery rare even in Labor's rich history. The party, sure of the wisdom of its political assassination, looked to Gillard and the campaign with optimism. The strategy was to dash to the polls and Gillard obliged, calling the election for August 21.

How fast the wheel has turned and how Shakespearean the fallout. On Thursday August 5, Rudd appeared before the cameras in the guise of Labor's saviour. He announced that after Sunday, subject to his health, he would return to the national campaign trail after a request from Gillard and would focus on the two vital states, Queensland and NSW.

It was Rudd, not Gillard, who announced his return. It came not by press release but by dramatic announcement. Rudd still hasn't spoken to Gillard. They have communicated by text messages. Get the drift? Rudd explained what "a very difficult time" it had been for himself and his family. He would be seeing Gillard this weekend.

Rudd has been in the wilderness for 42 days. Though a Labor backbencher, his media performance (he refused to take questions) was distinctly prime ministerial.

Confronting the danger of defeat Gillard succumbed to the unthinkable. It was no longer feasible to keep Rudd in the wilderness. So Gillard asked Rudd to serve Labor and save her prime ministership from Tony Abbott's surge.

The sublime irony, in effect, is that Gillard needs Rudd to legitimise her coup against him since such legitimisation comes only through winning the election.

The reason Rudd looks prime ministerial is because this election is about his record, his legacy, his former government. He spoke with passion about the need to halt Abbott, about Rudd Labor's success in saving the nation from recession, about stopping Abbott from wrecking the National Broadband Network and of Abbott's dismissal of climate change as "absolute crap". "Let me say this proudly and clearly," Rudd said. "The policy directions of our country are absolutely right." And these are Rudd's directions.

Yes, there are two Labor leaders in this campaign: the current Prime Minister and the former prime minister. The next day on the trail Gillard seemed sharp and strong. She said she was full of "vim, vigour and fight". She wants to beat Abbott but she wants to show Rudd she is the real prime minister. Make no mistake, Labor is firmly behind Gillard. Any Labor victory will witness an orchestrated message that it was her appeal, not Rudd's, that did the trick.

But Rudd will extract a price for his role in a Labor win and demand a high seat at the cabinet table.

This extremely contrived unity "fix" is fragile but should assist Labor's campaign, notably in Queensland. It is far superior to Rudd's humiliating exile, with media leaks engulfing Gillard. Rudd's self-interest is obvious: a Labor victory to which he makes a tangible contribution.

Anyone who thinks a re-elected Gillard government will be a friendly, stable, united outfit needs a prize for gullibility. The Gillard-Rudd relationship has entered a new era that defies easy calculation. The trust is shattered and will not be restored.

Gillard's toughness and professionalism should not be misjudged. Her ability to defeat Abbott and then contain Rudd remains the most likely result.

In reality, this Labor government has been weakened. Re-elected, its majority is expected to be cut. It would be plagued by Gillard-Rudd rivalry. Gillard's campaign contortions from old Julia to new Julia expose the extent of her inexperience as leader.

The government has lost Lindsay Tanner and John Faulkner in retirements. It will face the Greens holding the Senate power balance, suggesting a structural shift to the Left. The Labor brand will be damaged despite any Gillard success. This will not be the sort of political environment that generates substantive policy reform. Gillard has put a carbon price into cold storage; she seeks no election mandate for an ambitious economic agenda; there is little sign re-elected Labor will plunge into productivity and competition policy initiatives; the best to be expected is the return to budget surplus in three years, and this is important.

This week in his Hamer Oration, professor Ross Garnaut criticised both Rudd and Gillard for their policy weakness on climate change. But Garnaut made a bigger and broader point. His thesis is that Australia's superior policy advances during the Hawke, Keating and early Howard periods seems terminated by the degrading of the political system as a result of the renewed influence of special interests, short-termism, poor leadership and an electoral politics that prioritises focus groups before national interest policy. Unless this malaise is confronted then Australia will retreat into a self-defeating under-performance. "Australians face hard economic policy choices in the period ahead," he warned.

Fiscal policy aside, there is no such recognition in the campaign.

Garnaut called for the "restoration of the political culture of the reform period" and the revival of leadership as "an essential missing ingredient". This is an adverse judgment on both modern Labor and the current Coalition.

The evidence, however, is that the character of politics is moving away from Garnaut's prescription.

What are the post-election prospects flowing from an Abbott victory and an Abbott-Truss Coalition government?

Abbott would have a far more difficult task than that facing John Howard after his 1996 victory. At that point Howard had already served five years as treasurer and more than five years as opposition leader in two stints. Abbott, by contrast, has been Opposition Leader for nine months.

For most of the past three years the Coalition parties have been disunited, plagued by mishaps and unready for office. Abbott is the third Liberal leader this term after Brendan Nelson and Malcolm Turnbull.

Consider the structural and atmospheric difficulties Abbott would face: he would enjoy, at best, a modest majority in the House of Representatives. The Senate would be controlled by a Labor-Green majority certain to be hostile to his agenda. Confrontation between the houses and deadlock over bills would be likely.

Labor would remember Abbott's special role in destroying its ETS bills in the Senate, the trigger that began Rudd's irreversible slide. Labor would be more than usually resentful at defeat after only one term; the Greens would be appalled at an Abbott triumph; the union movement would be shocked and sullen.

This suggests a highly polarised political system that would impose huge demands upon Abbott. His social conservatism would trigger immediate hostility from the progressive media. Holding the unity of his own side would be a challenge. Abbott has pledged that Joe Hockey would be treasurer but a senior place would need to be found for Malcolm Turnbull. The Abbott-Turnbull relationship would be improbable.

In this campaign Abbott has looked more prime ministerial than ever before. But converting his "action contact" of ending waste, repaying debt, stopping the taxes and stopping the boats is a tough call in office. The Coalition is pledged to restructure spending with $24 billion of cuts. Abbott's rejection of a carbon price is probably viable only for an interim period, yet the Coalition's divisions on climate change, so lethal in 2009, remain unresolved.

Abbott's ultimate test would lie in his economic credentials, previously derided by Peter Costello.

Abbott would need to meet the surplus deadline in his first term, tolerate rising interest rates, eliminate government waste and, above all, prove himself as a genuine pro-market economic reformer. His overall task, political, parliamentary and economic, seems daunting.

Abbott and Gillard are on notice. Without a post-election resurrection of braver leadership the political system will be failing the public interest test.