Julia Gillard creating far too many enemies playing to the faithful

THE dominant story in national politics today is how an aggressive Julia Gillard is taking a series of decisions that appease and appeal to the Labor Party yet discredit her government.

With the election date announced, governing has been engulfed by campaigning. But in the past fortnight the danger of overreach has infected the heart of Labor's campaign.

In politics you define yourself by your enemies. The Gillard government, in a rejection of proven Labor re-election methods, has embarked upon a campaign that is creating far too many enemies.

The media reform package, in its decision-making, its delayed timing, presentation and content suggests a dysfunctional government that is turning inwards and taking decisions that constitute a net political negative for Labor yet satisfy its internal lusts.

Why would Labor, only months before an election, bring down a package that it struggles to justify and that achieves the unlikely task of uniting most of the media industry against the government?

This defies usual political logic. No previously successful ALP national government has deployed such tactics. Senior ministers who backed this media package conceded privately to Inquirer that it was recognised that the decision was a political negative.

It accentuates Labor's dangerous atmospherics, where the leadership bubbles below the surface. Given the Prime Minister's vulnerability in the polls and the mounting threat from forces determined to install Kevin Rudd as leader, throwing political petrol in the face of much of the media industry is astonishing.

The key to the decisions of the past fortnight - the assault on the 457 visa scheme, the raft of industrial law concessions to the unions and the media package - is that they appease the party and indulge the faithful but discredit the government.

There are two responses to this situation. You can argue that Gillard's internal position is being consolidated because she is feeding the party's preferences and prejudices, or you can argue that by bringing her government into discredit Gillard has misjudged and is actually weakening her own position. I believe the latter view is more potent.

On the ABC's 7.30 program on Thursday night, Australia's leading demographer, Peter McDonald, who supports Labor's announced 457 visa reforms, rejected Labor's economic justification and said the Prime Minister's rhetoric "really undermines the system". There are now signs the issue is getting adverse coverage in Asian papers.

Meanwhile, senior cabinet ministers privately call the media package political madness, in exactly those words. The point is that Labor felt compelled because of internal dynamics to proceed with new regulatory controls long advocated by Communications Minister Stephen Conroy, though watered down from the models originally proposed.

Opposition spokesman Malcolm Turnbull captured the risky nature of this project: "This is the very first time the government has sought to regulate, in any way, newspapers. That's a big move, a very, very big move. First time in peacetime. And to present that and say, 'You've got four sitting days to consider it and pass it into law', is holding the parliament and the people the parliament represents in complete contempt."

Frankly, it would be best for Labor if the parliament voted down the package or declined to give passage according to Conroy's deadline. One point is clear: if parliament does pass this package, it will do so without sufficient scrutiny of a policy that looks shoddy and ineffective at best.

Kerry Stokes, chairman of Seven West Media, signalled his opposition to the entire package despite an estimated $150 million licence fee break for the commercial networks. His implicit message was the damage to media freedom was not worth the money.

Despite Gillard's determined performance in western Sydney, the past fortnight has seen Labor move into more high-risk re-election politics.

It has turned a tightening of the 457 visa scheme into a calculated and xenophobic attack on this program in the teeth of mounting employer alarm. It has announced a series of further pro-union industrial law changes, deepening its alienation from big and small business, the latest being Gillard's pledge this week to protect penalty rates in law.

And it has announced it will appoint a Public Interest Media Advocate to impose a new and vague public-interest test on media mergers and to retaliate against companies that fail to meet the standards arising from the industry self-regulation bodies.

The risk is obvious. Gillard is defining her values by a series of fights she has initiated or joined. But a government with so many enemies appears as a government with so many problems, inviting an adverse judgment on its competence.

Consider the pattern this year. Labor has unnerved the superannuation industry; it keeps finding new ways to irritate the mining industry. After the past fortnight, the Business Council of Australia has declared, in effect, no confidence in a government engaged in "ill-disciplined regulation-making for political expediency". The two other main business bodies, the Australian Industry Group and the Chamber of Commerce and Industry have passed the point of alienation. There is agitation in the sporting communities about Labor's management of the drugs issue; groups pledged to a strong skilled migrant intake, the IT sector, healthcare and hospitality have real concerns; and Labor has now triggered a political war with much of the media industry.

This constitutes a re-election strategy? It gifts Rudd with a brilliant agenda of items to correct if somehow, some way, he does return. The justification for his return would be obvious: to return Labor to the middle ground. You can hear Kevin in your head making the case.

Gillard's agenda over the past fortnight is not a middle ground strategy. It is not the re-election strategy adopted by Bob Hawke. Nor does it resemble the re-election strategy adopted by a range of state ALP governments in the past generation. Think Neville Wran, Bob Carr, Steve Bracks, Mike Rann or Peter Beattie.

Gillard's aggression is polarising the country as intended. The danger is that she polarises the country with Labor in a passionate but entrenched minority. Yet the cabinet seems unable or unwilling to dissent. Over the second half of last year, Gillard's political recovery was based in minimising the carbon tax and promoting her own agenda on disabilities and school education. It made sense and she got results. But things are now getting derailed. The pitch to Labor's base, the blue-collar vote, the trade unions and demonising the enemies has gone too far. It may yield some polling dividends but this is hardly an agenda for electoral success.

It is obvious what is coming next: tying Tony Abbott's support for 457 visas to the resurrection of Work Choices. This is, by the way, a reminder that the Opposition Leader has been absolutely correct in his tactic of being super-cautious on industrial relations and rejecting the intellectually valid but politically misconceived argument that he should promote more labour market deregulation.

There is a further bizarre twist to the situation. As some commentators have noted, Gillard's plight resembles Rudd's three years earlier, with the government at war with a major industry, the PM not for turning and the government looking increasingly incompetent.

There is no major Labor principle at stake in the media package. This policy is critical neither to Labor belief nor the interests of its supporters. The issue should have been done and dusted last year.

Instead Labor locked itself into a stance of newspaper regulation, felt it could not retreat, deluded itself into thinking that by abandoning the more draconian aspects it would minimise criticism and then put a gun at the head of parliament by imposing an unacceptable timetable.

The chief executive of News Limited (publisher of The Australian), Kim Williams, is emphatic there has been no consultation with his company on this policy. The proposed Public Interest Media Advocate is a part-time position of immense discretion whose decisions cannot be appealed on merit and who is the interpreter of a public-interest test lethal in its potential application but extremely vague in its meaning.

For example, in the case of a merger the media advocate may have to decide whether the benefit of a change in control "outweighs the detriment to the public" due to a loss in diversity. This officer, apparently, can decide whether media organisations lose their exemptions under privacy law according to their professional conduct.

This proposal is bad public policy and defective administration. Labor has singularly failed to identify the exact problem such laws are to solve. It testifies, again, to the defining quality of this government - its addiction to new forms and levels of government intervention in virtually every area of public policy in the utopian delusion that more regulation is the sure path to progress and public satisfaction.

Many of Labor's most recent initiatives require legislation. In a range of areas including media, environment and industrial relations, Labor is locking in detrimental statutory positions that will brand the record of this minority government and that, unless unwound by a future government, will become a permanent drag on the nation and its economy.

The real issue in this election year is how much enduring damage will be done between now and voting day.