Abbott needs to be ready

Bookmark and Share Ideas & Liberty | John Roskam
Australian Financial Review 24th February, 2012

Kevin Rudd and big business have a lot in common apparently. According to Labor ministers they're both willing to put self-interest ahead of the "national interest".

On Wednesday Industry and Climate Change Minister Greg Combet was at the National Press Club berating big business for complaining too much about industrial relations.

According to Combet, when big business points out that the Fair Work Act has resulted in more strikes and lower productivity, companies are talking in their "self-interest" and not the national interest.

Then a few hours later, after Kevin Rudd had resigned as foreign minister at a 1am press conference and let loose at Julia Gillard, Treasurer Wayne Swan let loose at Rudd. Swan accused him of putting "his own self-interest ahead of . . . the country as a whole". Since Rudd's resignation there are a few other things he's been accused of as well.

Until this week, Labor politicians usually waited until their party was in opposition before they started abusing each other in public. At the rate they're going, Labor will have the luxury of years in opposition to continue this fight regardless of who wins Monday morning's leadership ballot. ALP members will have the time to ponder what their party stands for.

The ideological condition of today's Labor Party is revealed in the fact that Kevin Rudd's pitch for the leadership is based entirely on one simple assertion - that he has the best chance of beating Tony Abbott.

The Gillard-Rudd leadership battle has nothing to do with policy; it is entirely about electability. It's another demonstration of how federal Labor politics is now virtually indistinguishable from NSW Labor politics.

Everything that's happened this week is, of course, good news for Tony Abbott. It's likely that this time next week Julia Gillard will still be Prime Minister, and that's more good news for Abbott. Coalition MPs are not unhappy about facing an ALP led by Gillard.

Rudd as prime minister again is an entirely different dynamic. He could say he's sorry for swearing, dump the carbon tax (or at least delay it) and break Labor's alliance with the Greens. At a stroke he'd negate half of the Coalition's election campaign and overnight the race would become competitive. Tony Abbott knows this, Julia Gillard and Kevin Rudd know this, and so does virtually every Labor backbencher.

It's a testament to the level of hostility Rudd has generated that despite all of the above only a third of the caucus are likely to vote for him.

It's easy to preach from the sidelines about the need for the federal Coalition to have a transition to government plan when there's an election to be won. But we've seen in Victoria what happens when parties win government and they're not ready. The Baillieu government is starting to govern effectively but it's taken at least a year for that to happen.

Abbott needs a plan because there won't be any time to lose. He will need to make massive spending cuts to fund his promises, to finance the raft of taxes he wants to abolish, and to get a budget surplus. And he'll have to do this while fighting a potential double dissolution election to get the repeal of the carbon tax through the Senate.

The cuts Abbott needs to make provide him with an unprecedented opportunity to reshape the country's tax and welfare policy framework. Welfare and income transfers are where the savings in government spending will come from. Instead of Labor's piecemeal cuts to so-called "middle-class welfare", Abbott has the chance to go back to fundamentals and ask the questions no one has asked for decades, such as "what is welfare", "who should get it", and "how much should they get".

This is the opportunity the Coalition missed after it commissioned the McClure report on Australia's welfare system in 1999. Politics and elections got in the way and the report was buried. Trends identified a decade ago, such as the rapidly growing number of Australians on welfare and the high prevalence of inter-generational joblessness, have continued.

Abbott won't win the next election by promising welfare reform and spending cuts. But regardless of whether he talks about these things or not, if he gets to be PM they will dominate his first term.

Labor is doing Tony Abbott's work for him. Which gives Abbott the chance to spend less time worrying about winning the next election, and more time worrying about how to make sure he'll run a good government.


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