Nightmare in suburbia

LABOR faces a pasting in once-reliable outer Sydney.

Julia Gillard

AS parliamentarians return for the final sitting week of the year, opinion polls continue to show that on the national figures, Labor is back in the electoral hunt.

Today's Newspoll confirms a trend that has been established across the polling spectrum for months now: that the macro picture for Labor has vastly improved from where it was a few short months ago.

What the published polls have failed to pick up, however, are the difficulties the government faces in key regions across the country, nowhere more so than in western and southwestern Sydney.

Seat by seat, the micro picture for the government is not good. The growing realisation that Labor in NSW stands to get wiped out at the next election is focusing the collective minds of an otherwise divided NSW Right faction, with potentially profound implications.

GRAPHIC: Labor's twin problem areas

"Mate, I can tell you, we have a huge problem in western Sydney," one Labor powerbroker from NSW tells The Australian. "We are actually doing OK around the rest of the state. Eden Monaro, for example (the traditional bellwether seat that has gone with the winning party at every election since the 1970s), looks OK. We might even find a way to hold on in a seat like Robertson (Deborah O'Neill's seat on the NSW cental coast). But in our heartland out west, that's where we are in trouble."

Labor's pockets of poor polling despite improved macro polling at the national level aren't confined to Sydney. The grim picture coming out of suburban Sydney is matched by equally grim internal polling numbers for Labor-held seats in Tasmania (which even the PM's office admits to).

The way things stand, the government will be lucky to retain even one of its four Tasmanian seats, according to Labor insiders. And the party stands little chance of reclaiming the fifth and final Tasmanian seat of Denison, which independent Andrew Wilkie won off Labor in a surprise result in 2010.

In other parts of the country, the news for Labor is mixed.

The Coalition appears to be at or near its high-water mark for claiming seats in Western Australia, already holding 12 of 15 seats, but Liberal strategists in Western Australia are confident even of keeping seats such as Hasluck (0.6 per cent) and Canning (2.2 per cent), despite their narrow margins. "Given Labor's mining tax, we are even going after Brand (held by Gary Gray on 3.3 per cent)," one shadow minister says.

In Victoria and South Australia, Labor is believed to be doing reasonably well, and Opposition Leader Tony Abbott is especially unpopular in these southern states. But aside from a handful of electorates Labor strategists are hopeful of picking up, such as Boothby (0.3 per cent) and Aston (0.7 per cent), where the government has been blessed by favourable electoral redistributions, the Labor vote in both states is already at or near its high-water mark.

The Gillard government is using unpopular decisions by the LNP government in Queensland to make its case for winning back Sunshine State seats, helped by recent defections and scandals involving senior members of Campbell Newman's administration. But Labor has as many electorates at risk in Queensland (such as Moreton, Petrie and Lilley) as there are seats it believes it can reclaim (for instance, Brisbane, Forde and Herbert).

At any rate, electoral fat to be picked up in Queensland on a good day would be more than offset by Labor's woes in NSW. Concerns for Labor in Sydney are having the biggest impact on internal party dynamics leading into this final parliamentary sitting week.

"If the PM doesn't start paying attention to what's going on here in Sydney, she can forget green shoots of a recovery in other parts of the country," one Sydney-based Labor MP says.

"It won't matter, we'll lose enough seats here alone to comfortably lose the election."

Remember that as a minority government, Labor, unusually, needs to pick up seats to retain government.

The Australian has been made aware of internal Labor polling out of NSW that shows that as many as a dozen seats across the outer suburban areas are in trouble, and not only those seats which fall within the Australian Electoral Commission's definition of a marginal electorate (5 per cent or less).

Individual Labor MPs have been informally briefed on the polling results, which has targeted the west and southwest of Sydney, as well as key marginal seats across the state.

Kevin Rudd supporters are seeking to use the internal polling, which is slowly seeping out of NSW party headquarters, to drum up prospects of a comeback.

At the moment that is not on the agenda for those in NSW with direct access to the polling. They are more concerned that awareness of Labor's problems in Sydney forces the government to do something about it in the way that it frames itself, thus helping the machine sandbag seats at the next election.

The Prime Minister needs to be concerned about the state of Sydney for her own re-election, but NSW party officials are worried about it for the influence the state will have in any post-election Labor caucus, whether the party is in government or opposition.

The power of the NSW Right is predicated on its size within the caucus. A diminished NSW presence will leave the strong Labor state of Victoria controlling the caucus, in turn diminishing the NSW Right's prospects of playing king (or queen) makers.

State-based Newspoll numbers show that in Victoria the Labor vote is holding up from 2010, perhaps even slightly improving, and sources close to the PM have for months spruiked improvements for Labor coming out of Julia Gillard's home state.

It is a much more grim picture in NSW, where Labor internal polling shows that right up and down the electoral pendulum, western and southwestern seats in and around Sydney are struggling. Five of Labor's 10 most marginal seats on the electoral pendulum are located in NSW. Seats such as Greenway (0.9 per cent), Lindsay (1.1 per cent), Banks (1.5 per cent) and Reid (2.7 per cent) are all in Sydney's west and southwest.

The NSW Labor campaign unit held the line in these electorates in 2010, saving Gillard's prime ministership in the process. It was credit that the newly appointed state secretary Sam Dastyari and his then assistant state secretary Chris Minns were happy to take.

But since the last election, support for Labor in these electorates has plummeted. The combination of the carbon tax backflip, cost-of-living pressures, the asylum-seeker failures and ongoing corruption allegations going to the heart of the former NSW Labor government have created a toxic mix that is turning traditional Labor voters away in droves.

Rudd supporters now argue that the Australian Workers Union scandal that has enveloped the Prime Minister is the perfect excuse to change leaders and begin rebuilding in Sydney. But large chunks of the NSW Right are having none of it, for now at least.

It's no secret that the push to return Rudd to the prime ministership during this term of parliament gained momentum when an increasing number of right-wing voices within NSW Labor pledged their support to the former PM. At the top of that list was the convener of the Right and party whip Joel Fitzgibbon, not to mention senior current and former cabinet ministers Chris Bowen and Robert McClelland.

But some senior figures inside and outside of the parliamentary NSW Right continue to back Gillard, among them Environment Minister Tony Burke, rising star Jason Clare and Dastyari. Prominent union official Paul Howes is one of the PM's closest supporters.

Traditionally, when it comes to leadership showdowns, where the NSW Right goes, the rest of the party follows.

"And when the party moves, so quickly does the NSW Right, so they look like it was their doing," one Victorian powerbroker wryly adds, referencing the coup against Rudd, which was led out of Victoria (by Bill Shorten and David Feeney) and quickly joined by then NSW senator Mark Arbib.

While the NSW Right has in large part swung behind Rudd, with one or two exceptions the Victorian Right has consistently backed Gillard. A divided Right ensures Gillard is safely ensconced in the prime ministership.

While the NSW Right might still be divided over the leadership, it is increasingly united over the need for the PM and her strategists to sit up and take notice of the polling problems the government faces in Sydney.

Poor Labor polling in the west and southwest of Sydney isn't confined to extremely marginal seats like those already mentioned. Rudd-backers claim that the size of the swing against the government in and around Sydney's west and south could comfortably hit double figures, putting under real threat seats Labor has never lost at a general election, such as Throsby (12.1 per cent), Blaxland (12.2 per cent) and Chifley (12.3 per cent).

Party officials loyal to Gillard with access to the internal polling claim that this is deliberate scaremongering by Rudd supporters aimed at uniting the NSW Right (and perhaps Left) against Gillard.

"It's just so unhelpful that they try and turn poor polling that requires attention into a leadership issue. We've already dealt with that," one laments.

But they acknowledge that once-safe Labor seats, albeit not those with double-digit margins, are in trouble.

Off the back of an admittedly small sample-sized track polling in NSW, the Labor machine is concerned about a number of traditionally safe Labor electorates in and around Sydney that were already reduced to single-digit margins at the last election. Parramatta, on a margin of just 4.4 per cent, looks lost according to the internal polling, and seats like Werriwa (6.8 per cent), Barton (6.9 per cent), McMahon (7.8 per cent), Fowler (8.8 per cent) and Watson (9.1 per cent) are all in need of attention. Labor strategists are least concerned about Fowler and McMahon. Peter Garrett's seat of Kingsford Smith (5.2 per cent), taking in Sydney coastal areas, may also be in danger; it's an electorate where the Labor Right retains control of the party organisation, despite Garrett's standing as a non-factional representative. No internal party polling has been conducted in Kingsford Smith.

These are all areas that at the state level voted in new Liberal MPs as part of Barry O'Farrell's government, in some cases for the first time.

Self-interest can be a powerful motivator in politics. For example, supporters of the PM claim that Bowen's jitteriness about the electorate (in McMahon) is behind his continued advocacy for a return to Rudd. Whether a Gillard-backer like Burke, whose seat of Watson looks vulnerable for the first time in political history, would rather risk his electoral future by continuing to support the PM, or might take a chance with his ministerial future by switching allegiances to Rudd, is an interesting question.

For others, such as Assistant Treasurer David Bradbury, who holds the seat of Lindsay, the internal polling is so bad that even Rudd backers can't see how a change of leadership would save the minister.

Bradbury memorably said ahead of the February showdown that he might need to get a tattoo of the PM on his arm to prove his allegiance and negate speculation that he might be shifting camps.

There are some high-profile Rudd and Gillard backers in NSW whose futures may be on the line at the forthcoming election if a rout is in the offing.

The final parliamentary sitting week is often referred to as the "killing season" in Canberra politics, such is the propensity of parties to execute their leaders ahead of the summer recess. No such actions are on this week's agenda for either major party, despite both partyrooms housing former leaders who are significantly more popular in their electorate than the incumbents.