The incredible shrinking Labor party

THERE are lessons for the ALP from Queensland, but is anyone listening?

Gillard

THE big question for the federal Labor Party is what it can learn from the crushing electoral defeat state Labor suffered in Queensland.

It has now lost three state elections on the trot in the three largest states in the commonwealth in just 18 months. That's on the back of a poor federal election result in 2010 which saw the government lose its majority.

The lessons are many, but yesterday in a press conference from South Korea Julia Gillard shut the door on at least one of them. Asked whether the federal government needed to reconsider the design and implementation particulars of the carbon tax, Gillard responded: "The carbon tax will be implemented exactly as legislated."

Not a lot of room for adjustment there.

Anna Bligh sold state assets without first seeking support from voters for doing so and she suffered accordingly. Gillard legislated a carbon tax despite promising not to do so at the last election and voters may be waiting patiently to deliver her a similar message when they get their chance late next year.

The parallel has not shifted the PM's thinking. Gillard had already told reporters at the press conference that her government would carry on managing the economy in the interests of voters, with the implied suggestion that government knows best. If Labor MPs were looking for the PM to show contrition in the wake of the Queensland result it wasn't forthcoming. Having told journalists the previous week that they should "look at the scoreboard" as she went about implementing an agenda few thought she could realise, what Gillard doesn't seem to understand herself is that voters are not impressed with this government's achievements.

The numbers do not lie. When Labor came to power federally it was in office in every state and territory and it held 351 (nearly 60 per cent) of the state, territory and federal seats on offer. It now holds just 223 or 37 per cent. And while hopeful Gillard supporters try to point to slow growth in Labor's polling numbers in recent months, the party's primary vote has in fact been bobbing around in the low 30s. Today's Newspoll has seen federal Labor's support dip once again, with its primary vote falling back down to just 28 per cent.

The last two state by state Newspolls for 2011 put federal Labor's Queensland primary vote at just 29 and 26 per cent respectively. That's close to the 26.9 per cent primary vote Queensland Labor recorded on Saturday. Federal Labor's lower house representation in Queensland was reduced to just eight at the 2010 election, but on these figures those MPs will not all hold their seats.

Federal issues may not have played a central role in the Queensland election, but the lessons, implications and parallels for the federal arm of the Labor Party are obvious. While state Labor had been in power for 20 of the past 22 years in Queensland, and long-term governments winning re-election is always difficult, Bligh was far more popular than Gillard and the Queensland Labor government never faced the same criticisms for lacking core competency that federal Labor does.

It invites the question federal Labor MPs have already started asking each other: if voters in Queensland were prepared to send such a strong message to state Labor, what do they have in store for federal Labor?

Former Queensland Premier Peter Beattie suggested on Sunday morning that Gillard needed to spend more time in Queensland, perhaps even buy a house there. But one Labor MP joked "that would seal the fate of our few remaining (Queensland) members".

Given that exit polls on Saturday evening put cost of living pressures at the top of the list of issues affecting Queenslanders' voting intentions, and the carbon tax featured as the most significant federal political issue on their minds (for 44 per cent of voters), Gillard's answer at the press conference that "the carbon tax will be implemented exactly as legislated" suggests federal Labor may learn very little from what happened in the Sunshine State.

"Without an acknowledgement of the broken promise or changes to the scheme, voters are ready to send Gillard the same message Anna just received", one former Kevin Rudd supporter told The Australian. It's ironic that Rudd supporters could favour a climb down on the carbon tax when it was Rudd's climb down on the emissions trading scheme (a position advocated by Gillard) that cost him the leadership.

More likely they are alluding to a change of leader as the circuit-breaker that Labor needs, but the opportunity for that came and went before Saturday's results.

It is difficult to see how Gillard can shift direction even if she is willing to, so wedded is she to the carbon tax and its implementation. It comes after years of backflipping by all sides on the issue of climate change. And with a budget surplus for the coming financial year now a political article of faith for Wayne Swan, there does not appear to be room in the budget to lessen the burden of the carbon tax when it is introduced half way through this year.

Ministers loyal to the PM argue that when the carbon tax is introduced and the compensation measures start flowing voters will see that it isn't as bad as the opposition is making out. But even if that happens, which is doubtful, it doesn't provide a mechanism for moving past the broken promise, irrespective of how the operational aspects of the scheme are received. And if the economy continues to suffer from a high dollar and globally high interest rates, voters may not distinguish between those factors and the newly introduced carbon tax that the opposition remains focused on condemning.

On current polling a defeat for federal Labor late next year will be followed by defeats in South Australia and Tasmania as well, where elections are due in early 2014. That would leave the party out of office in every state and federally, just two terms after it won office at the commonwealth level, putting it in power in every jurisdiction.

The fallout would leave Labor with deep questions about its political relevance and need to adapt to the modern political environment. But some Labor sources claim these are questions that need answering now. The government has spent much of the past 12 months arguing against Tony Abbott rather than for its own agenda. The negative campaign against Abbott has not worked, just as Bligh's negative campaign against Campbell Newman did not work. Recent efforts by Swan to appeal to Labor's base by attacking mining billionaires may be too narrowly focused and out of step with the growing of the pie analogy Paul Keating famously favoured ahead of wanting a larger slice. It was Keating's approach that helped Labor appeal to the aspirational voter.

So can Labor learn anything from the Queensland result? Doing so may require learning from history, indeed, from Labor's political opponents. Apart from deeper questions about Labor's core belief structure, there is the realpolitik need to calibrate political strategy with policy directions to win back voter support.

Right now Labor has adopted a wait and see approach. One senior minister told The Australian "we'll just keep going the way we are for now, see where we land after the budget. But yeah, later this year if we haven't picked up we'll have to think about where we are at for sure."

But the wait-and-see strategy isn't enough, according to one Labor powerbroker who says the government needs a "circuit-breaker", which could have included using the Queensland result to apologise to the voters and redirect the message. He says distancing the federal party from the state result in Queensland is a lost opportunity to reach out to voters upset with federal Labor.

Labor MPs adorning the panels of television and radio networks covering election night went into overdrive to distance the results coming in from federal political issues. Nevertheless, it is hard to escape the parallels between what happened to Bligh's government and what could happen to Gillard's if she doesn't seek to remedy the situation. Much of yesterday's media commentary reflected this dilemma.

Irish author James Joyce once said that "mistakes are the portal of discovery", but only if mistakes are realised. Even Gillard's closest allies admit she is not one for learning from mistakes. In fact, they often cite her stubbornness as a virtue. John Howard was known for stubbornness, but he was also quick to learn from his mistakes. Laurie Oakes has said of Howard that he made every conceivable mistake an Australian politician could, but he made each of them only once.

In early 2001 Howard found himself in a similar situation to that which Gillard is in now. In mid-March Newspoll revealed that the Liberal Party's primary vote federally had fallen to just 27 per cent, 35 per cent for the Coalition. Howard's personal numbers were no better, his satisfaction rating was just 28 per cent, dissatisfaction with the PM was running at 64 per cent. The following Saturday the Liberal Party lost the Brisbane seat of Ryan at a by-election, a seat it had always held, with a swing against it of nearly 10 per cent.

The previous month the Coalition in Western Australia led by Richard Court suffered a surprise election defeat, two weeks later Peter Beattie crushed the Nationals in Queensland, reducing the Liberals to just three seats in the process.

Rather than sitting back and blaming the state defeats on state issues alone, Howard's strategists acknowledged that the federal government had contributed to the decline of conservative parties at the state level. Howard pointed out that voters differentiate between state and federal issues to be sure, but he also acknowledged that his government needed to listen to the message the electorate was sending.

Former party president Shane Stone's internal memo describing the Howard government as mean and tricky was leaked into the media to start debate (perhaps also to quash talk of a Peter Costello leadership challenge). On the back of all of this Howard used the May budget to back down on petrol indexation, giving motorists some relief at the bowser. Business activity statements were simplified and the budget surplus was used to win back voters weighed down by cost of living pressures with various forms of middle-class welfare.

The Liberals went on to narrowly win the Aston by-election in July and by the time of the Tampa incident and the September 11 terrorist strikes, momentum was with the incumbent.

Labor strategists like to point to Howard's comeback in 2001 as a reminder that they, too, can fight back from where they are now, forgetting what it took for him to make that happen.

Howard had not painted himself into a corner on GST particulars in the same way that Gillard has with the carbon tax. Howard had fiscal room to move to entice voters back into the Liberal fold with inducements, whereas Swan's budget will be very tight and is likely to cut middle-class welfare, not expand it.

Most importantly, Howard was prepared to learn from his mistakes and shift course as required, creating the circuit-breaker needed to recapture voter attention. Labor, in contrast, is relying on incremental improvements in the polls in the hope that the opposition panics that it is vulnerable to a Labor comeback because its leader isn't popular.

Today's poll is a blow to Labor's short-term strategy, and compensation relief attached to the carbon tax won't start flowing until the second half of this year.

In the meantime, voters will stay angry with Labor (at all tiers of government) and Gillard has shown no signs that she is listening to them.