Can Houston package stop the boats?

Kudelka

AUSTRALIA is nearing a moment of high peril. Julia Gillard, vanquished and humiliated, has retreated to embrace the Coalition policy on Nauru. But will it stop the boats or will this fragile political deal end in a deeper humiliation for Australia?

The clock is ticking. It started when Immigration Minister Chris Bowen announced late on Monday that henceforth boat arrivals were on notice: future arrivals ran the risk of being moved offshore for processing. Gillard used the authority of her office to issue the same declaration yesterday.

Will this Gillard-Bowen warning carry credibility and have traction? If not, the danger is that the Houston package will be destroyed by the sheer momentum of an asylum-seeker industry that thinks Australia is a chronic soft-touch country.

This means the political class is now on trial. What is needed is swift, resolute legislative action and, beyond this, projection of a new policy and psychology from Australia that unnerves and intimidates the smugglers and potential boat arrivals.

They must be convinced the rules have changed. If this does not occur, then failure is certain. Such perceptions depend entirely on the conduct of the domestic debate.

The Houston report is about a new approach. This point is still not grasped. It was the central message on Monday from Angus Houston and his panel members, Michael L'Estrange and Paris Aristotle. While the panel revives Nauru and Papua New Guinea as offshore processing centres to apply a short-term fix, this report does not believe old ideas from the Howard era can suffice to complete the job.

Yes, the Howard Pacific model has an immediate urgency, but Houston's long-run strategy depends on a new regional model where Malaysia and Indonesia become the pivotal players.

The Houston report is an astute document that allowed the leaders to terminate the Nauru-Malaysia deadlock. It gave cover for Gillard to retreat and accept Nauru without insisting on Malaysia as the required trade-off. It enabled Gillard to declare further compromise was essential and virtuous. "I am over it, we're all over it," Gillard said of the impasse.

Tony Abbott has won a smashing political victory. Indeed, Abbott says Labor's new bill is really his bill. Abbott is entitled to claim vindication because Labor, having told him for years that Nauru would not work, is now ringing the President of Nauru and the Prime Minister of PNG. Rarely does vindication came with such embroidery. At question time yesterday Abbott and Scott Morrison rubbed Labor's nose in the political mud.

Gillard as PM is now doing exactly what Abbott intended to do. She won agreement yesterday morning from the leaders of Nauru and PNG for offshore processing centres.

The Defence Force Chief told Gillard our military teams could be on the ground as early as Friday, the day after the bill should pass. Gillard said processing could begin within the month. Gillard has become the new John Howard. What a fate for a proud Labor leader! On asylum-seeker policy Labor is battered and beaten, forced into a subjugation so complete and comprehensive that it is difficult to imagine a comparable ignominy in recent decades.

Labor is tainted by this reversal precisely because it was the issue where it declared its moral superiority over Howard when it dismantled his policy. Labor's beliefs have been mugged by reality and abandoned. As the Houston report makes clear, Labor was blind to the power of pull factors. It substituted moral self-righteousness for sound policy. The Australian people will not forgive Labor for elevating its moral vanity before the national interest. The reckoning will be protracted.

The Houston report, however, is not primarily about Nauru and PNG. It calls Nauru "a necessary circuit-breaker" in the short term to curb the surge in boats.

The heart of Houston's strategy involves a trade-off: Australia will increase its humanitarian intake from 13,750 to 20,000 at once (doubling the inclusive refugee element to 12,000 places) and then to 27,000 with a bigger intake from the region to persuade the region, in turn, to embrace offshore processing deals with the goal of ensuring that every boat arrival into Australia is processed offshore.

This is an epic task in diplomacy and politics. It will be difficult to implement. It will require winning the trust of Malaysia, Indonesia and other nations, and the incentives here are significant -- we take more refugees from the region and offer more funding to build its capacity.

In effect, the panel takes the "people swap" principle of the Malaysian agreement as the foundation for a new Australian regional strategy.

The Houston report finds against the Malaysian deal in its current form. It wants stronger human rights safeguards and a formal memorandum of understanding with Malaysia. That may be hard. Yet the report sees this Labor arrangement as a step of "great significance" and a "potential building block for a stronger framework of regional co-operation".

At this point the political risk is obvious: it is that Nauru and PNG are implemented but nothing else happens in terms of regional progress. That would make the Houston report a short-term success and a long-term failure. Critically, such an outcome is most unlikely to halt the boats.

It is noteworthy that Gillard, under pressure, has compromised her policy, but Abbott, the obvious winner, has offered no compromise at all. Gillard endorses the report in full but Abbott makes no such endorsement. Herein lies the critical insight -- this report, in the long run, is a more confronting challenge for the Coalition than for Labor because the Coalition is sceptical of the regional strategy it champions.

Not for a moment does the Houston panel think the solution lies in the trifecta of Nauru, temporary protection visas and boat turnings. It says Australia must deal with the wider region and that includes processing in nations that have not endorsed the Refugee Convention -- a repudiation of core Coalition policy. This critique was explicit by Houston and L'Estrange, deeply trusted advisers in office to Howard.

The Houston panel has enunciated a new "no advantage" test, that boat arrivals should not gain an advantage by their actions over what would otherwise have happened within UN regional processing. It is a fair principle but its application will be harsh. It means people may wait on Nauru for many years, thereby igniting the cry of unjustified imprisonment. If it sticks, however, it will invest the revived Pacific Solution with sterner disincentives. And that would help Abbott in office.

In the interim, Gillard is about to implement Abbott's Nauru policy. Both leaders have a deep interest in seeing it work.

Gillard needs to halt the boats and Abbott needs to have his own policy vindicated.