Labor exits bad year on better note

NOW an ascendant Julia Gillard needs a clear agenda.

In a rare moment of bipartisan togetherness, Julia Gillard and Tony Abbott attend the White Ribbon Day launch in Canberra yesterday. Picture: Kym Smith

NOW an ascendant Julia Gillard needs a clear agenda.

THE final parliamentary session of the year winds up today leaving politicians to return to their home states filled with uncertainty about which party will come back in the new year in the more politically dominant position.

"We just had a parliamentary session where nobody won," former Labor powerbroker Graham Richardson says. "There were plenty of losers but victors were hard to find."

Most of the post-election attention has been on the woes of the government and Julia Gillard's inability to articulate a fresh agenda for Labor's second term.

However, the Coalition is not without its problems. There are divisions at the top as Andrew Robb continues to covet Joe Hockey's job as shadow treasurer.

Many Liberals believe Malcolm Turnbull also covets Hockey's job, if not Tony Abbott's, although he is being kept busy holding the government to account over the National Broadband Network, the issue that may determine the success or failure of the Gillard government.

"Malcolm looks like he is enjoying the challenge, but how long can he be seriously occupied in a mid-level shadow portfolio?" one senior Liberal asks.

This week's Newspoll gave Labor some respite from poor post-election polling. It was the first time Labor got above the 50 per cent threshold on the two-party vote as well as the 40 per cent primary vote mark since the election.

Importantly, Gillard also extended her lead over Abbott as preferred prime minister, including the all-important net satisfaction rating, the number of voters satisfied with her performance minus those who are dissatisfied.

Gillard and her supporters continue to claim they are avoiding poll watching for fear of falling into the same trap Kevin Rudd did when he became consumed with the 24-hour news cycle instead of the philosophical direction of the government.

The reality is that the way a party heads into the summer break can dictate how it emerges. Momentum is all important, and for a government foundering since the August election, it had a relatively good final week in parliament to cap off an otherwise disastrous year.

Labor achieved cross-bench support for a long awaited structural separation of Telstra, a move most industry insiders applaud. That so-called micro-economic reform, as Gillard has referred to it, is a necessary prerequisite for Telstra to take the role that it now can in the NBN rollout agreement.

And the release of one of the worst kept secrets in Canberra -- that the cost of the NBN would be substantially less than the $43 billion figure that was bandied about before the election -- may just help Labor rebut opposition claims of excessive spending on an untried technology.

If Labor is to make a success of its second term, it needs the NBN debate to fall its way, along with ensuring that the budget returns to surplus in the timeframe promised.

Using parliament effectively to argue its case is something Labor must do next year, especially given that opposing the NBN is a unifying principle for the conservatives, who see it as emblematic of a large-scale Labor spending program.

That is the way Abbott is looking to couch the debate. "Labor has demonstrated that they know they have lost their way by hiding away from the details of the NBN," Liberal senator Bill Heffernan suggests. "Ordinary Australians would think spending billions of dollars should come with a little more scrutiny, you would have thought."

Gillard has long been regarded as Labor's best parliamentary performer. On the evening she announced she would be challenging Rudd for the Labor leadership in late June, her supporters began updating her Wikipedia site with positive commentary about her achievements, including her abilities in question time.

Yet since becoming Prime Minister, and despite announcing midway through the election campaign that the "real Julia" would be making an appearance, she hasn't been as comfortable under the bright lights of question time in the way she was when serving as Rudd's deputy.

That changed this week, perhaps as a consequence of a successful trip abroad for the Group of 20 meetings in Lisbon, where she started to feel as if she was the national leader.

Mingling with world leaders (or fellow world leaders, as Rudd used to say) is a tried and tested method of helping new prime ministers settle into the top job.

"She came back with a little more confidence," Richardson says. "She had lacked confidence as the boss before now. She was better this week and she needed to be."

If momentum going into the summer months is important politically for Gillard, just as important for party stability and Labor's second-term agenda is what she does to heal the wounds of the Rudd overthrow and develop a policy strategy for the new year.

Despite the election win, senior Labor figures, including national secretary of the Australian Workers Union Paul Howes, have described this as one of the worst years in the party's history. "Twenty-ten will go down as one of Labor's worst years, alongside 1996 and 1975," Howes claims.

Healing wounds will be a matter of using the summer to continue to work her way around the party, making people feel included in the setting of the second-term agenda and implicitly sending the message that she has no intention of governing with the autocratic style that Rudd did.

Coming back next year when parliament resumes in February will require the early laying out of an agenda, otherwise the opposition will paint federal Labor as a larger version of state Labor governments that lack direction.

In a year where the NSW Labor government appears destined to fall at the ballot box, Gillard will want to ensure she has plenty of product differentiation.

Looking back on 2010, Gillard will be glad to have made it to the end of the year with her prime ministership intact. But approaching Labor's second term as an exercise in holding the team together won't suffice. Remember, if Labor only holds its existing configuration of seats at the next federal election, in all probability it will lose power. The rural independents are likely to retire or lose their seats to the Coalition at the next poll, which would give Abbott the 76 seats he needs to win the election.

For Labor to be returned to government once the politics and policy of this term are completed, it will need to expand its franchise of voter support, as John Howard did at consecutive elections in 2001 and 2004.

And that's before even considering some of the difficulties it may have in holding seats in Tasmania, where electorates such as Bass and Braddon were retained on the promise of the NBN; Victorian seats won on the back of early euphoria surrounding one of the state's own becoming prime minister; and in South Australia where, if Abbott can overcome personal dissatisfaction with voters, Liberals can start picking up seats.

Western Australia is unlikely to return to the Labor fold quickly. And Labor out-campaigned the Liberals in NSW in a way the conservatives won't permit next time.

But not everyone on the Labor side is pessimistic. "I think Labor will definitely come back in seats in Queensland next time," Richardson says. "The QR float will help and the Rudd effect will fade. But predictions are largely meaningless. It will all come down to whether Gillard has a good year next year."

On the Coalition side of the chamber, reminiscing about what a difference a year makes is easy but also risky. Complacency was something Labor suffered from between 1998 and 2001 after coming so close to removing Howard after only one term.

It was the precursor to Kim Beazley's much maligned small-target strategy that left him vulnerable late in Howard's second term when the September 11 terrorist attacks and the arrival of the Tampa favoured the fortunes of the incumbents.

Gillard is working hard to paint Abbott as a wrecker, not a builder, a summary some of his own MPs worry about. The image, if seared into the minds of voters, could turn Abbott into an un-prime-ministerial figure.

As Steve Ciobo said in the Coalition partyroom on Tuesday, "We can't just define ourselves on what we are opposed to, we also need to define what we believe in."

This time last year the Liberals had just ripped themselves apart over the emissions trading scheme and replaced their leader with someone few really believed would succeed in the job (but at least he wasn't Turnbull); their prospects in the looming election looked grim.

Now the Coalition is united and many Liberals believe it needs only to stay unified to return to the government benches. If Gillard embraces a bold agenda, that may not be enough.

Even so, staying united from opposition is easier said than done, particularly when the senior leaders are all vying for each other's jobs.

At 59, Robb knows time isn't on his side. He doesn't want to be finance minister in an Abbott government, he wants to be treasurer.

He also doesn't think much of the job Hockey is doing in the shadow treasury role.

Hockey finds the constant white-anting about his performance frustrating and is believed to be getting close to demanding that his leader find a way to put an end to it.

That could spark an internal war between Hockey and Abbott supporters, proxies for moderate and conservative tensions inside the Liberal Party.

Turnbull has little or no support in the partyroom for a return to the leadership, but that won't stop him eyeing it off if he thinks he can do a better job than the incumbent. Increasingly, large sections of the media are talking up the job he is doing in communications, with reference to the notion that he could be put to better use in a more senior portfolio.

Hockey no longer trusts Turnbull, his one-time close friend, and the Coalition's deputy leader Julie Bishop doesn't trust either of them.

In short, the upper echelon of the Liberal Party is a snake pit, and that's before considering the divisions inside the Nationals that see Barnaby Joyce wanting Warren Truss's job.

While Labor remains under pressure and the Coalition's polling numbers stay strong, the personal ambitions dividing the conservatives will be papered over. But a polling downturn could lead to more public questioning of the negative strategy Abbott has adopted and whether his team has been configured in the most appropriate way to form government at the first available opportunity.

Both main parties are going into the parliamentary recess from where it is hard to see which side has the advantage.

Labor has more healing to do and must set the agenda for the new year.

The Coalition mustn't lose its momentum since coming so close to forming government.

Which party starts the new year better could be crucial to who has the more prosperous 2011.