Labor must face up to high cost of reform

REFORM is never easy and the federal Labor government is finding out just how hard it can be as it goes about prosecuting its carbon tax argument.

Doing so is made all the more difficult for this government on two important counts: it pledged not to introduce such a tax before the election last year, and Julia Gillard and Wayne Swan were the senior politicians who talked Kevin Rudd out of fighting the last election on an emissions trading scheme.

If conviction for a cause is a vital part of good salesmanship, the Labor leadership team just doesn't have it.

That, at least, is the situation at the moment. If Labor wants to win the argument in favour of a carbon tax the public needs to be convinced the Prime Minister and Treasurer believe strongly in its importance themselves. If they can't grab that argument effectively in the months ahead, one of the pair may need to step down and that person can't be the the Prime Minister.

That's the price a party pays for an audacious coup plotted against Rudd in Labor's first term.

The replacement becomes untouchable, lest the leadership turn into a revolving door. To move on Gillard now or at any time this term would consign Labor to guaranteed electoral annihilation.

Swan therefore is the only option at the apex of the party who could be replaced if Labor's fortunes don't improve, but he would have to execute himself. That time may not be now, it may never come. But his performance needs to be watched closely in the months ahead.

How ironic that the Labor team that spent so many years in opposition running scare campaigns against the GST now finds itself on the other side of the mother of all scare campaigns by Tony Abbott over a carbon tax. How ironic Labor opposed important reforms (while downgrading their significance) yet now argues for reforms that no one could claim are any more significant or difficult to implement than those John Howard instituted on scripts such as industrial relations, taxation policy and gun laws.

And Abbott as a member of the Howard front bench in the wake of Labor's scare campaigns while in opposition learned a thing or two from those times, as well as from when he worked as John Hewson's press secretary while trying unsuccessfully to sell a GST from opposition at the 1993 election. In that election, Labor ran a relentless (and unfair) scare campaign against Fightback!, claiming its effect on prices and cost of living would buckle the economy and harm household budgets. I well remember the powerful images on television.

Abbott's national tour today talking up what a carbon tax would do to prices and living standards is as damaging to Labor today as Paul Keating's anti-GST campaign was to Hewson in the 1990s. It is also just as overstated. But so long as cost of living pressures persist, it resonates with voters feeling the strain.

It is much easier to tear ideas down than build them up. Howard's win in the 1998 election fighting for a GST came at a significant political price. He went into that election with a 46-seat majority and won the election with less than 49 per cent of the two-party vote, only holding on in key marginal seats flooded with incumbency advantages.

Hewson lost what was dubbed an unlosable election in 1993 because he spelled out a package that Keating easily was able to dismantle rhetorically, even if the policies themselves went on to feed strong economic growth during the Howard years when the Coalition instituted many of the Fightback! initiatives Hewson had advocated.

Hindsight is a wonderful thing, but it sometimes distorts the historical realities of what has happened. While the easy analysis is to compare the successful reforming governments of Bob Hawke-Keating and Howard-Peter Costello with the present underperforming Labor administration, that can be like comparing apples with oranges.

When each of the political leaders mentioned was in the throws of selling their reformist ideas they were well behind in the polls, struggling to make the arguments necessary and facing protests and scare campaigns that diminished their standing in the public's eye at the time.

Graham Richardson was even cornered in very un-Australian scenes while touring northern Queensland as environment minister. The governments led by Hawke and Howard nevertheless came out on the other side of the arguments they pushed enhanced and bolstered in the public's eye. But they had to win the argument (and the following election) to receive such accolades.

The danger for this Labor government is that if it doesn't win the argument, loses the debate and is consigned to the dustbin of political history, it will go down as the equivalent of the Whitlam government, only without the reformist zeal.

You see, whatever anyone thinks of the Whitlam government, it instituted change. The present Labor government has laid a platform for change - agree or disagree with it - but because it was so consumed in its first term with cementing its polling dominance, it is one term behind where new governments need to be in terms of policy implementation if they wish to be remembered as reformist. And Labor today is staring down the barrel of defeat before it gets the chance to enact much beyond the Fair Work Act.

Policy scripts such as the carbon tax and mining tax, even if successfully implemented during this term, will be wound back by the Coalition if it wins the next election. That, at least, is Abbott's commitment.

Many commentators warned the present Labor government against more of the overt caution it showed in its first term. Failing to cut deeper into the first budget, failing to take the emissions trading system to an election, failing to seriously implement education and health revolutions as pledged.

Getting close to embracing reform ain't the same thing as getting it done. As governments work their way through a natural political life cycle, reform becomes harder as electoral margins narrow. That was Hawke's experience, and even as Howard extended his electoral mandate in 2001 and 2004 he found it hard to do anything other than cling to power as old age set in for his administration.

Make no mistake, the Labor government is in a desperate fight for political survival. The next election is still more than two years away, to be sure, assuming Labor runs full term.

But the election will be fought in a climate of rising inflation, interest rates and cost of living pressures. The carbon tax will be an easy target for voter disenchantment on each of these fronts. And because Labor is a minority government, it has no electoral fat to absorb rising voter anger when it next faces the people.

Peter van Onselen is a Winthrop professor at the University of Western Australia.