Kevin Rudd’s Mission Impossible

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Kevin Rudd’s Mission Impossible

Rudd’s return as Australian PM will make the elections more competitive, but Labor still faces a tough challenge.

Kevin Rudd’s return as Australia’s prime minister has reignited an election race that had previously appeared a foregone conclusion. Political analysts that had once been questioning only the extent of the victory for Opposition leader Tony Abbott’s conservative Coalition have suddenly started asking the trillion-dollar question: can Rudd 2.0 win the unwinnable poll?

Speaking to the party faithful in Brisbane on Saturday, Abbott said: "You all know that if we had been meeting a month earlier, we would have all been laughing, joking, relaxed…I've got to say, I am grateful to Mr Rudd. Because if there’s one thing he has done, he has dispelled any complacency that might have existed on our side of politics.”

The Liberal-National Coalition were previously nearly unbackable favorites to win the September 14 poll called by Rudd’s predecessor Julia Gillard, who had seen her popularity and that of her center-left Labor party slide into dangerously low territory amid political scandals, faltering economic growth and the introduction of carbon and mining taxes. On June 26, after a phony war of botched challenges and media leaks, Rudd gained his revenge on the woman who had ended his first, tumultuous stint in office.

Despite Coalition advertising reminding voters of Rudd’s previous failures, the response from the opinion polls was exactly what Labor’s strategists had hoped. For the first time in three years, the traditional party of the labor unions returned to level terms with the free market Coalition, with both locked at 50:50 each on the two-party preferred vote. And unlike Gillard, Rudd rated significantly higher as preferred prime minister than the Opposition leader.

“He’s got a bounce, and I’d describe it as a ‘fair go’ bounce,” Tim Wilson of the pro-market Institute of Public Affairs told The Diplomat. “People are going to give him a few weeks to prove that he’s actually up to the job before passing judgment.”

Similar to Gillard before the 2010 election, Rudd has moved swiftly to neutralize issues seen as hurting the government’s re-election prospects, including a growing influx of asylum seekers arriving via boat and the unpopular carbon tax on emissions.

“Rudd’s spoken to business, environmentalists, indigenous groups – basically trying to get around as many ‘power points’ in the electorate as possible to gauge what they’re thinking, and he’s plugging holes in Gillard’s policies according to what the sectional pressure groups have told him,” Griffith University’s Paul Williams said in an interview.

Policy changes

Rudd’s biggest economic and environmental call has been “terminating” the carbon tax which his predecessor introduced, by moving to a European-style floating price on emissions in July 2014, a year earlier than planned.

"The government has decided to terminate the carbon tax to help cost-of-living pressures for families and to reduce costs for small business," Rudd told reporters on July 16. "This is the fiscally responsible thing to do. The nation's 370 biggest polluters will continue to pay for their carbon pollution, but the cost will be reduced meaning less pressure on consumers.”

While Abbott described Rudd’s move as being a “fabricator, not the terminator,” the policy change is seen preventing further Coalition attacks on the “great big tax on everything”. However, moves to help fund the A$3.8 billion budget cost by increasing taxes on employer-provided cars have sparked opposition from businesses and even other Labor leaders, with the auto industry describing it as a “greedy grab”.

Rudd’s earlier comments on the end of the China resources boom were endorsed by his new Treasurer Chris Bowen, who said returning the budget to surplus too quickly would be a “terrible strike to the Australian economy.”

Noting China’s slowing growth, Bowen has spoken of the economy’s transition to more normal conditions after the cooling of the mining boom originally sparked by Chinese resources demand.

“China's year-on-year GDP growth rose by 7.6 percent in the first half of the year. This is well down from the double digit growth of past years. The second quarter's result was 0.2 percentage points lower than the first quarters…This emphasizes the emerging challenge of slower Chinese growth. As our economy transitions so too does China's which is why our renewed focus on productivity growth is so important,” he said in a July 21 statement.

A major economic statement reportedly planned before the election is set to reveal the impact on government revenues, which are expected to have been hit by declining export prices along with the carbon tax change.

In foreign policy, the Mandarin-speaking Rudd has quickly put the spotlight back on Australia’s free trade agreement negotiations with China, which have failed to reach a conclusion after eight years of talks.

However, his first overseas trip after regaining the leadership was to Indonesia, where he pushed trade issues including cattle exports along with addressing the politically costly issue of people smuggling from Indonesia to Australia.

“Boat people” warned off

The issue of so-called “boat people” arriving on Australian shores has consistently been seen as an electoral weakness for Labor but a strength for the Coalition, with Abbott repeatedly pledging to “stop the boats”.

Record arrivals of asylum seekers have sparked a A$5 billion blowout in the immigration budget, with more than 20,000 reaching Australia by boat this financial year – equivalent to the official refugee intake, which had been increased by Gillard.

After Gillard’s previously failed solutions to the issue involving East Timor and Malaysia, on July 19 Rudd announced a new political quick fix – Papua New Guinea.

“From now on, any asylum seeker who arrives in Australia by boat will have no chance of being settled in Australia as refugees,” Rudd said in Brisbane at a press conference with PNG Prime Minister Peter O'Neill.

“Asylum seekers taken to Christmas Island will be sent to Manus and elsewhere in Papua New Guinea for assessment of their refugee status. If they are found to be genuine refugees they will be resettled in Papua New Guinea…If they are found not to be genuine refugees they may be repatriated to their country of origin or be sent to a safe third country other than Australia.”

The policy includes a A$200,000 bounty on people smugglers, with Rudd saying he was seeking to end the “business model which says if you jump on a boat, you’re going to end up in Australia”.

While Abbott criticized the plan for subcontracting the problem to Papua New Guinea at taxpayer expense, Rudd’s policy was seen outflanking the Coalition on an issue that had plagued his first spell in office.

Party reforms

Rudd’s third major reform was against his own party, with plans approved Monday to reduce union control, broaden membership and decrease the threat of a challenge to his leadership. Under the changes, a sitting Labor prime minister cannot be challenged without a signed petition from 75 percent of caucus, with the threshold lowered to 60 percent in opposition.

“In effect it was a back me or sack me play by the Labor leader and the latter was never an option. Even if they perform poorly, Labor prime ministers will now be substantially insulated from factional or other pressures for leadership change,” the University of Queensland’s Ian Ward told The Diplomat.

Election date?

Having distanced himself from Gillard’s election proposal of September 14, Rudd has kept analysts guessing with his likely choice of a poll date, which could be held as late as November 30.

“Australians want a poll soon, and if [Rudd’s] seen dragging it out I don’t think he’ll be doing himself any favors. Personally I think he may go at the end of August, as they’re aware that they can only command the political agenda for as long as they can create distractions and draw attention to themselves,” the IPA’s Wilson said.

Griffith University’s Williams said Rudd needed time to address more key constituencies, but “it’s going to be a hard sell to go beyond September because it looks like he’s clinging to power”.

Both Williams and the University of Queensland’s Ward said the campaign would be a “presidential-style” battle between Rudd and Abbott, with Rudd attempting to distance himself from his predecessor and both sides running negative campaigns, with the Coalition boosted by greater donations.

“Labor’s strategy is about Kevin Rudd the product…It’s going to be a referendum on whether you want potentially the most conservative prime minister in Australian history in Tony Abbott, or this likeable, ordinary nerd Kevin Rudd,” Williams said.

In contrast, Wilson said the campaign would be “all about policy, and their very different visions for the country. In many ways it will be 2007 all over again…a fight about what are the key issues to make Australia a more competitive economy,” he said.

The independents and Greens are expected to be casualties of the polarized election, with the rising cost of living likely to figure prominently.

Ward said the Coalition would remind voters of Rudd’s previous failings and the criticisms of his former colleagues. “We’ll see lots of images reminding us that even Rudd’s colleagues thought he was terrible in government,” he said, saying that Abbott would “try and recreate himself as a person interested in policy ideas”.

Yet despite Rudd’s poll boost, all three analysts suggested it would be Abbott with the biggest smile on election night.

“If you were betting, you’d probably have money on a Coalition victory. It’s highly unlikely that Labor can claw back to a more substantive electoral position – they’ll probably lose fewer seats than they might have,” Ward said.

Wilson said the Coalition’s higher primary vote would keep it in a winning position. “It’s very hard to come to an outcome that shows Labor winning, short of some catastrophic failure on the part of the Coalition,” he said.

Williams said Labor was starting from a worse position due to the retirements of independents, giving the Coalition an ostensible 75 seats initially compared to the current 72 seats each of both Labor and Coalition parties in the key lower house.

“I can’t see the Coalition winning more than 80, and I can’t see Labor lower than say 69. It’s going to be very close – and that means another hung Parliament is possible,” he said.

In 2010, Gillard outnegotiated Abbott to win government in alliance with independents and Greens. Having already ruled out doing deals, Abbott will be hoping this year’s poll is much more like 2007, when another first-time leader came to power.