Inspired by season two of Masterchef, the Canberra press gallery is feverishly cooking up a storm over an apparent leadership challenge to Kevin Rudd. But while too many cooks appear to be spoiling the journalistic broth in our Nation’s Capital, there are 5 good reasons why Rudd will lead the ALP to the next Federal election.
It’s too close to the election
Any political strategist will tell you that it does not make political sense to change leaders so close to an election. Changing leaders this close makes the race a more even playing field, something that the government wants to avoid. The contest becomes about two new leaders trying to win familiarity with the electorate (Gillard and Abbott), rather than a contest between a known quantity (Rudd) and one that is recognised but risky (Abbott).
The major advantage of an incumbent is that voters are more comfortable with the devil they know. While Tony Abbott is well known in the electorate, he is untested as a political leader. Rudd is a known quantity as a leader and the Australian electorate, while annoyed with him, are likely to stick with the devil they know.
The same dynamic is operating in the NSW Liberal Party. Even though Barry O’Farrell’s personal approval rating is rock bottom, are the NSW Liberals likely to change at this late stage to someone like Mike Baird? The advantage of incumbency means this is highly unlikely, although not impossible.
Gillard is a gun, but not a silver bullet
One of the criticisms of Rudd among the political commentariat is his desire to channel the government’s achievements through his own super human efforts. This analysis has focused disproportionate attention on Rudd’s personality, and by extension the popularity of Gillard’s personality.
While personality is important in any election campaign, it is ultimately superficial. In choosing who to vote for, Australian electors inevitably consider the character of the two leaders but move beyond personality politics to the menu of policies and achievements on offer. That is why it is dangerous to focus on Gillard as a silver bullet without looking at the broader picture.
Labor strategists know this and need to move the focus to these broader policies and achievements. While Gillard is a good politician and an excellent communicator, installing her as leader would be a superficial answer to a deeper challenge of communicating the guts of the government’s platform. If the food is average, changing the waiter makes little difference.
The tide is turning on the mining tax
It’s true the mining profits tax was not sold well in its early stages, but the tide is turning. The primary reason is not Kevin Rudd, but rather the internal economics of the mining companies.
Mining companies need certainty for projects because the impact of the tax needs to be factored into complex calculations. Those calculations are important for driving businesses forward and need to be resolved. Mining companies have been advocating for a profits-based tax for years, so the essence of the tax is no surprise to them. What is a surprise is the time taken to nut out the details and therefore make decisions about how to move forward.
While Twiggy Forest and Clive Palmer are grandstanding, more serious mining executives are nervous about when the pantomime will end and real negotiations will resolve the issue. Similarly, small and medium sized mining companies are hankering to rid themselves of the production based royalty scheme.
Companies also need time to make sure they manage their share price. One of the main functions of a corporate Board is to ensure the share price is going in the right direction for the benefit of shareholders and for themselves (Board members are usually shareholders too). But the longer things stay uncertain, the more share markets are likely to price in this uncertainty, and share prices could fall.
There are business incentives for the mining side to come to agreement as soon as possible, just as there are political incentives on the government to come to agreement before an election.
Rudd will be pragmatic
Rudd is politically pragmatic and will take advice on the key policies and messages that are required to win the election.
It would be different if Rudd was more like Turnbull – a maverick who believed his judgment was superior to all others. While Rudd clearly has a healthy dose of self confidence, he is not a political martyr, and is already this week moving back to a disciplined message, rallying the troops and delegating the mining profits tax for others in Cabinet to resolve.
It’s the economy, stupid
Putting aside the previously poor communication on the mining super profits tax, Rudd and Labor have a great story to tell on health reform, building the education revolution, the national broadband network, company tax cuts and an increase in super from 9% to 12%.
But the icing on the cake is that Rudd and Labor successfully shepherded Australia through the Global Financial Crisis. The fact is that the government’s stimulus package worked, and worked well, and Australia was the most successful OECD country in avoiding recession. Labor’s success in managing through the GFC undermines one of the Coalition’s traditional strengths – the mantle of responsible economic manager – and this is a powerful position to put forward in a campaign.
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