ECONOMIC AND POLITICAL OVERVIEW PHOTO: PAUL LOVELACE PHOTOGRAPHY Professor Ken Wiltshire AO Professor Ken Wiltshire is the JD Story Professor of Public Administration at the University of Queensland Business School. He is a Political long-time contributor to CEDA’s research and an honorary trustee. overview As Australia enters an election year in 2007, Ken Wiltshire examines the prospects for a long-established Coalition and an Opposition that has again rolled the leadership dice. 18 australian chief executive RETROSPECT 2006 Prime Minister and Costello as Treasurer. Opinion Politically, 2006 was a very curious and topsy-turvy polls and backbencher sentiment at the time vindi- … [Howard] became year. There was a phase where the driving forces cated his judgement. more pragmatic appeared to be the price of bananas and the depre- From this moment the Australian political than usual … dations of the orange-bellied parrot, and for a dynamic changed perceptibly. Howard had effec- nation that has never experienced a civil war there tively started the election campaign, and in the “ were plenty of domestic skirmishes, including same breath had put himself on notice that he culture, literacy, and history wars. By the end of the would have to win the election. Almost immedi- year both the government and the Opposition had ately he became even more pragmatic than usual, ” changed their policy stances on a wide range of and more flexible in policy considerations, espe- issues. cially in relation to issues that could divide his own Coalition. The defining moment For Kim Beazley and the ALP, Howard’s decision The defining moment in Australian politics was clearly not what they had wanted, despite their occurred on 31 July 2006 when Prime Minister claims to the contrary, but at least they now knew John Howard, in response to yet another effort to the lay of the battleground and could design appro- revive a transition of leadership to his Deputy Peter priate tactics. Early in 2006 Beazley too was put on Costello, announced that he would be staying on notice by the ALP factions and some of the union as leader to fight the 2007 election. Until that movement, and so endeavoured to change his episode, anecdotal evidence was that Howard image and style – no more Mr Nice Guy. would most likely step down in late 2006. Thus arose the spectre of two leaders both However, having been forced to take stock, he desperate for a win in 2007; both presiding over argued that his party and the Australian people teams which had become much fractured since the wanted the status quo to continue, with himself as 2004 election. 19 FEBRUARY 2007 ECONOMIC AND POLITICAL OVERVIEW Coalition capers regional seats than the Nationals and that there is a The year 2006 saw the continuation of the politi- secular decline in the Nationals’ vote and represen- cal trend apparent since the last election, when the tation. Towards the end of 2006 a fracas broke out focus of attention fell on the backbenchers of the over the New South Wales Senate ticket and some Coalition parties because the Coalition holds the potential three-cornered contests in other states balance of power in the Senate with a majority of forced the Prime Minister to intervene to keep the only one seat. Consequently, Coalition harmony is peace. Both the Liberals and Nationals experienced crucial for the passage of legislation and imple- some unseemly fights over preselections, with mentation of public policy, particularly when accusations of branch stacking and stripping, and dealing with politically difficult matters. some sitting members were displaced – an unusual The Prime Minister and his cabinet team have event. Nationals leader Mark Vaile switched from become familiar with the need to negotiate with his Trade portfolio to Transport and Regional dissident National Party backbenchers to obtain Services so that he could spend more time in the the passage of legislation or, if this is not totally country overseeing his party in the run-up to the successful, to negotiate the support of Family First’s election. Senator Fielding. But 2006 saw some Liberal back- benchers from both Houses also prepared to cross Labor turbulence the floor. In addition, the PM was obliged to allow In this mid-election year, in which Labor might conscience votes on selected matters. well have taken the opportunity to revise policies, Legislation that had to be amended significantly build unity, and lay the groundwork for the very during the year, as a result of Coalition fragmenta- important election battle, the opportunity was tion, included voluntary student unionism in largely wasted. universities, cross-media ownership, Telstra privati- Early in the year there was strong talk of yet sation, mergers and the role of the Australian another challenge to Labor leader Kim Beazley, Competition and Consumer Commission with polls showing him to be only the third most (ACCC). Legislation that was withdrawn, or popular person to lead the party. Having report- defeated by allowing a conscience vote, or through edly been put on notice by his backbenchers and crossing the floor by government backbenchers, the union movement to lift his game and become included decision-making on the abortion drug more forceful, he soon complied with some very RU 486, offshore processing of asylum seekers, and strong stands on policy issues. These included the privatisation of the Snowy Mountains hydro promising to “rip up” the Australian Workplace scheme. Legislation to override the ACT govern- Agreements (AWAs) under the Coalition govern- ment’s civil union Bill was passed, but caused some ment’s workplace relations laws, bringing troops ruction in the Coalition and division on the floor home from Iraq, and revising Labor’s three of Parliament, and the workplace relations legisla- uranium mines policy. In response to Costello’s tion, especially relating to independent contrac- budget, he pledged a “pact with middle Australia”, tors, produced internal division of opinion as well. which incorporated increased spending on train- Towards the end of 2006 other matters loomed ing, banning foreign apprentices, spending that promised to cause further fracturing of Coali- $2.8 billion on a high-speed fibre optic network as tion solidarity. These included a potential trade a joint venture with telcos, including a fibre-to- agreement with China, stem cell research, breaking the-node broadband network; he also pledged up the single desk for wheat exports and the to cut the nation’s greenhouse gas emissions by Australian Wheat Board (AWB), and the elimina- 60 per cent by 2050, establish an emissions trading tion of perceived legal discrimination against same scheme, sign the Kyoto protocol, fund solar energy sex couples. and give a subsidy of $2,000 for hybrid cars. Coalition tension also came through other devel- Regarding innovation policy, he pledged to estab- opments. Foremost of these was an unsuccessful lish a new ministry or unit within the Prime Minis- move by the Queensland Liberal and National ter’s Department for the commercialisation of parties to undertake a merger that would have seen innovative products and technologies. The new- the Nationals join the Liberals. Despite having look Beazley seemed to have arrived. some support at the state level, the federal However the leader and his party continued to members of both parties moved quickly to quash it receive flak from within, with the release of two because of fears it would destabilise the Coalition books that were collections from Labor authors at a national level. Not long after, National federal attacking the structural and tactical weakness of backbencher Julian McGauran defected to the the party, especially the dysfunctionality caused by Liberals, triggering off a cabinet reshuffle that saw the factions and their grip over preselections and the Nationals lose one cabinet spot and reopened policy-making. The autobiography of former party old Coalition wounds, with many Liberals point- president Barry Jones portrayed Beazley as an ultra ing out that their party actually holds more conservative, favouring the “small target” approach 20 australian chief executive to the detriment of the party’s image and standing some of the government’s measures and the in the electorate. Indeed, the party’s presidency was tendency for people to lodge a protest or park their much in focus as many Labor members wondered vote outside of the election period proper. out loud why all party members could vote for the However, it also reflected the effectiveness of presidency but not in local preselection of candi- Labor’s parliamentary tactics in focusing on, and dates and formulation of policies. In the 2006 elec- targeting, government policy and performance in tion for party presidents to serve for the next three controversial arenas such as the AWB scandal, the The challenge to years, under Labor’s rotating presidency system, Iraq war, petrol prices, and the perennial topic of Beasley’s leadership there were allegations of factional influence and interest rates. even vote-rigging to deny former leader Simon So the challenge to Beazley’s leadership from from Kevin Rudd and Crean a spot. This came on top of the life and Kevin Rudd and Julia Gillard in early December Julia Gillard came as a death struggle he had experienced to win preselec- came as a bolt from the blue, since Beazley had “bolt from the blue … tion for his own seat at the hand of the factions, an given a solid performance to that point despite the experience repeated in several Labor seats. Mean- occasional human stumble. while current party president Warren Mundine looked on in dismay as the West Australian Labor Wedging and dog whistling government announced it would lodge an appeal The year 2006 saw the further refinement of polit- against the Noongar decision of the Federal Court ical techniques being used in Australia that have ” granting Native title in Perth.