Shuffling deckchairs to shore up ship

Nicholson cartoon

BILL Shorten and Greg Combet are now positioned as the vanguard of Labor's next generation future. This reshuffle cannot change the character of Gillard Labor but it points decisively towards the changing of the guard in Labor's hierarchy.

This week's move is consistent with every step Gillard has taken since last year's election; it is about her survival as Prime Minister, building her defences against Kevin Rudd, putting fresh paint on the decaying Labor edifice and operating fix-by-fix devoid of an over-arching strategy for the remainder of the term.

This is a reshuffle made under duress. It has the stamp of a weak Prime Minister trying to look strong. Gillard's aim is to hold out Rudd in the near term and offer the party a future beyond Rudd in the medium term with Shorten and Combet the future stars.

But the demotion of Kim Carr as industry minister became a flashpoint for Gillard-Rudd tensions. With Gillard's dissatisfaction towards Carr on obvious display, Rudd went public yesterday. "Minister Carr has been, in my experience, a very good minister for industry," Rudd said.

He applauded Carr's efforts during the global financial crisis in remarks that could only be interpreted as a criticism of Gillard's demotion. Rudd then insisted the reshuffle was "entirely" an issue for the PM. Of course.

The mistake by the Gillard forces at the national conference in publicly snubbing and demeaning Rudd has only brought the leadership struggle more into the open.

The extent to which the reaction to Gillard's reshuffle was shaped by perceptions of Gillard-Rudd rivalry betrays the pervasive nature of this struggle. It also displays a PM under endless pressure, riven by compromises and unable to achieve the authority she seeks.

The Coalition used the reshuffle to depict Gillard as rewarding the alleged "faceless men", Shorten and Mark Arbib, who backed her into the top job against Rudd.

But the promotion of Shorten makes sense on merit. Shorten and Combet are sharp and politically astute. Labor has been looking too static on industrial relations and Shorten's challenge is to change that dynamic.

He not only enters cabinet, takes the employment and workplace relations ministry but keeps his carriage of financial services and superannuation, a hefty slice of the waterfront.

It won't be easy. With business shouting alarm about the Fair Work Act, Shorten needs to display his economic nous with a genuine response to business concerns yet also retain Labor's political attack against the Coalition's workplace reform plans. Tony Abbott's caution on IR policy may yet be seen as astute. More fascinating will be Shorten's dealings with the unions and an ACTU short on brain power.

One area to watch will be the financing of the lift to 12 per cent in the superannuation guarantee. A risky but bold move from Shorten, in the Keating-Kelty mould, would be to strike a deal under which this burden was shared between employers and employees, thereby bringing a more sophisticated policy mind to this area.

Combet is a big winner, retaining the climate change portfolio but taking the industry and innovation ministry as well, a vast political job. He must fight the carbon tax battle yet shift this debate to the economy of the future. Gillard wants a fresh focus on positives, new jobs and technologies flowing from clean energy and to strengthen policy in the non-resources sector now squeezed by the mining boom.

Combet sees productivity and competitiveness as central to his task. But these economic benchmarks are declining in Australia and they constitute a severe challenge. On the political front, however, Combet, like Shorten, guarantees more firepower upfront to boost Labor and take the attack to Abbott.

Robert McClelland was a safe, relatively non-political attorney-general. Gillard wanted him dumped from cabinet but was unable to enforce this result.

The upshot is an embarrassment -- McClelland stays in cabinet in the housing and homelessness portfolio and a new ministry of emergency management.

His resentment, like Carr's, was obvious in the release of a list of achievements in the job he was forced to quit. New Attorney-General Nicola Roxon will be more driving, reformist and politically aggressive.

Gillard now has two cabinet ministers dealing with health. Tanya Plibersek takes the main job with the task of negotiating a new dental care scheme and trying to carry the means testing of the private health insurance rebate.

Mark Butler enters cabinet as Minister for Mental Health and Ageing, signalling another ambitious agenda. In addition to her current jobs, Jenny Macklin is asked to devise the new National Disability Insurance Scheme, a sensible choice.

Gillard had worries about the schools portfolio held by Peter Garrett. This becomes political dynamite in 2012 with decisions required on the Gonski report on a new system of funding for government and private schools. Garrett told the PM he wanted to remain in the job. He did not threaten to quit the parliament.

Gillard decided, finally, on the bizarre idea of making Brendan O'Connor, the new Human Services Minister, also minister assisting Garrett on schools policy.

Arbib leaps ahead as Assistant Treasurer, Small Business Minister in addition to keeping his current role as Sport Minister, a job he loves. In her vague statement on the reshuffle Gillard said she wanted Arbib to "be in touch with the needs of small business". Sure.

This reshuffle is not about fundamental change. Wayne Swan still has economic management, Stephen Conroy retains the National Broadband Network and Rudd, the alternative leader, cannot be touched as Foreign Minister. None of the defects that plagues this government will be cured by these changes. The cabinet, now grown to 22 strong, begins to look like the Whitlam years, far too fat, and too fat means ineffective.

During the past several weeks Gillard has enjoyed a favourable series of events -- the Queen's visit, leadership summits, the eurozone crisis highlighting Australia's comparable success, deeper US ties from President Barack Obama's visit and the retreat of carbon as an issue.

And where has it finished? With a Labor primary vote at 29 per cent in the AC Nielsen and at 31 per cent in Newspoll. Despite promise of mini-recovery these remain dismal numbers.

If there is an underlying theme in this badly managed and heavily leaked reshuffle it is getting more political clout into play to bolster Gillard inside the government and against Abbott. It is the work of a PM keen to enhance her authority yet unable to surmount her authority problem.