Foreign Correspondence

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Why it's easier to barrack for Julia

Laurie Oakes
The Daily Telegraph
November 12, 2011 12:00AM

MIXING with the great and powerful on the international stage does not always give Australian prime ministers a boost in their domestic standing.

Hosting President George W. Bush and a string of other world leaders at the APEC summit just before the 2007 election did nothing to help John Howard with Australian voters.

But Labor strategists are pretty confident that next week's visit by Barack Obama will be a positive for Julia Gillard.

She has started, at long last, to look prime ministerial.

Having her close relationship with the US President on show should burnish that improving image at least a little.

It might have been different if Obama had headed for these shores a few months ago when Gillard's poll ratings were in free fall, her party was in total despair and it seemed that she could do nothing right.

For some time, the government's back-room operators have believed that Gillard would get a chance to rebuild her authority if industrial relations could be brought back to the centre of political debate.

They were considering ways to achieve this when Qantas management did the job for them by locking out workers and dramatically grounding the troubled airline.

Suddenly Gillard was in her element. As the former workplace minister, IR is her issue. More important, it is an issue that involves fundamental Labor values and directly affects many traditional Labor voters who had been feeling dis-illusioned with the party.

And it is an issue that Tony Abbott, scorched by WorkChoices, is desperate to avoid and clumsy in handling.

So Gillard looks confident, portrays herself as defender of Australian workers and the travelling public, wrong-foots the opposition, outperforms Abbott in parliament - and goes up in the polls.

Labor, with a two-party vote of 47 per cent compared with 53 per cent for the Coalition, according to Newspoll, is still in an electorally disastrous position. But just two months ago it was 41 per cent Labor, 59 per cent Coalition. An 18-point gap has shrunk to 6 per cent.

For the time being, at least, Gillard has seen off the likelihood of a leadership challenge from Kevin Rudd.

And the trend in the polls, combined with the prime minister's newfound assurance, has unsettled the Coalition.

"We need to reconsider where we are over Christmas. What we've been doing might not continue to work as well as it has," a prominent Liberal MP said yesterday.

Abbott's basic strategy, which has served him well, has been to fight only on limited ground, and ground of his own choosing. The resurgence of industrial relations as an issue has shown this is not always possible.

Gillard was out on the IR battlefield again this week with the promise of pay rises for 150,000 mainly female community sector workers - a major step towards equal pay for work of equal value. And the government has plans to announce some changes to how the Fair Work Act operates.

IR is likely to stay on the political agenda, whether Abbott likes it or not, which means he will have to involve himself in developing a new IR policy, despite the risk of opening up divisions in Coalition ranks.

The opposition's most serious problem is that its own inconsistencies are becoming increasingly apparent as some of the pressure comes off Labor.

There was an example overnight when Abbott delivered a major speech in London comparing Australia's economic situation with that of Britain, the US and major European nations, emphasising in particular our low level of government debt - 8 per cent of GDP compared with 73 per cent in Britain and the US and 100 per cent in Italy.

"On the face of this comparative performance, Australia has serious bragging rights," Abbott said.

"Compared to most developed countries, our economic circumstances are enviable."

This from an Opposition Leader who has been proclaiming economic gloom and doom himself, whose shadow treasurer, Joe Hockey, described our debt level at Budget time as "a mountain to climb", and whose National Party mate Barnaby Joyce claims our gross debt is "tearing through the roof" and warns: "We are getting to a point where we can't repay it."

Some Liberal leading lights admit privately there is no way Hockey and shadow finance minister Andrew Robb will be able to find savings anywhere big enough to pay for the spending commitments Abbott and others keep rolling out.

The latest example was the backflip on increased superannuation payments that the government intends to finance through its mining tax.

While pledging to repeal the tax, the Coalition has now decided - via a discussion involving Abbott cronies but pointedly excluding Robb - that it will leave the super measures in place if it wins office.

Where will the money come from? No one knows.

What everyone does know, however, is that political pragmatism again trumped policy, as happens so often under Abbott. The Opposition Leader set up another test of his own policy consistency by telling the London audience: "The Australian government's most urgent economic task is to return to surplus as quickly as possible."

Quite soon - coinciding with the release of Treasury's Mid-Year Economic and Fiscal Outlook - treasurer Wayne Swan will announce new spending cuts to help bring the budget back to surplus.

Will Abbott support them, or take the populist route and oppose? Liberal MPs concerned about the Coalition's economic credibility are just as interested as the government in the answer.

In the meantime, Gillard can enjoy her moment in the sun with the US President.

Laurie Oakes is political editor for the Nine Network. His column appears every Saturday in The Daily Telegraph

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