Gillard's challenges colossal, not impossible

SOMEWHERE Labor lost its agenda, and the PM needs to find it before the weather turns.

LABOR is hurting at the moment. It may have won the federal election, if only just, but it is nevertheless at one of the lowest ebbs in its history. That may sound unlikely given the amount of time Labor spent in the political wilderness during the Menzies years, when it split over the issue of communism.

Today the crisis is one of identity. A speech by Greg Combet this week lamented how Labor was a party of ideas that had lost its way. The speech was typically optimistic about the future, as you would expect from a serving cabinet minister. But reading between the lines it highlighted how hard the road back to political respectability could be.

Today Inquirer has exclusive extracts from Paul Howes's new book, Confessions of a Faceless Man, a campaign diary from the recent election. In it he accuses Kevin Rudd of being the leaker during the campaign. Howes could hardly have been more scathing about Rudd's performance as prime minister, his lack of loyalty to the labour movement or his inability to play a team game.

It raises the obvious question of how Rudd can go on as one of the most senior cabinet ministers in a government run by the woman who ousted him, especially, if Howes is right, when it comes to cabinet confidentiality.

Julia Gillard admitted when she took over the leadership that the government had lost its way. Initially we were led to believe she was talking only about the salesmanship of its agenda. In time it became clear that even the agenda was lost.

Fast forward and Labor did manage to win the election, albeit as a minority government in a hung parliament. But concerns over what the party stands for, threats from a populist opposition and a lack of ideological direction all persist.

The factions were united by their collective efforts to remove Rudd, but unity sometimes stifles debate, thereby reducing the battle of ideas on which Labor has always prided itself. After a period where Rudd didn't entertain debate because of his autocratic style, uninspiring factionalism is no solution to Labor's woes. And while the factions in the party are getting along better than they usually do, that doesn't mean personalities driven by ambition aren't white-anting each other.

Thrown into this mix is certain defeat at state level in NSW, a risk of minority government in Victoria, likely defeat in Queensland and outright capitulation from opposition in Western Australia. The Labor governments in South Australia and Tasmania are hanging on by a thread.

Some people inside Labor say they haven't seen the party this down on itself since the mid-1970s, and they probably draw the line there only because they are too young to have lived through the earlier periods.

Liberals, and even the community writ large, don't fully understand the tribal nature of the Labor Party. It really is one big (not always happy) family, with all the dysfunction that type of structuring entails.

They socialise together, marry each other, they have worked together in political offices and unions all their lives. Young Labor is like a breeding ground for the politicians of the future, much more so than is the case on the conservative side.

If the Labor Party weren't a respectable political organisation - Australia's oldest political movement - it could be a cult. It certainly attacks those who don't stay loyal to the cause, in the way a cult may. (If you don't believe me, pick up a copy of Howes's book and check out what he has to say about Mark Latham.)

But the serious issue for Labor now, down on its luck but at least still in power, is: What does it do from here?

A break in political hostilities during the summer will give Gillard time to turn her attention to what she must do to become an effective Prime Minister. She has been elevated to the job earlier than she thought she would be and it shows. She clearly hasn't nailed down yet what she wants her government's legacy to be.

If Gillard can't find clarity on that score during the summer, she will be in for a long and difficult year, and just holding together the government will consume her time, leaving the electorate feeling as if it may as well have gone that extra step in August and thrown Labor out of power.

When determining what Labor's second-term agenda will be there are no amount of challenges for Gillard to consider.

Does she recalibrate the message to be a more compassionate one, thereby quelling dissent on her left flank but risking the mainstream centre?

Does she pursue a reformist agenda that should have been the focus of the first term? But because Labor's mandate is so weak, hard reform could cost Gillard her incumbency.

Does the government pander to the rural independents to forge compromises that allow it to pass legislation reflecting Labor values (on education, for example) and therefore appear active?

The problem with this course is that it may not be achievable while also honouring the commitment to return the budget to surplus in three years.

And what about how Labor handles the opposition? Does it ignore the Coalition and focus on its own agenda or does it mindfully watch what Tony Abbott does - as with Joe Hockey's statements on the banking sector - even if that means its agenda is being dictated by the opposition?

These challenges are not insurmountable, but they are bloody difficult. Abbott has come a long way as an Opposition Leader. If he can overcome the demons of defeat to test Labor next year he could well round out 2011 as the prime minister in waiting, as long as he doesn't let that tag cause complacency in his ranks.

Gillard as the incumbent should be able to steer the agenda in the new year, ensuring that Labor rises or falls on its own terms. That's the advantage forming government has given her.

It won't be a relaxing summer in the Lodge for the new Prime Minister and her first man. She will need to spend time drawing up plans because if Labor starts the new year badly it is likely to also end that way.

If Labor is near to its lowest ebb now, just imagine what things will look like if it loses the next federal election on the back of a series of state election defeats between now and then.