With the Federal Labor minority Government’s sudden slump in opinion polls on the back of the arrest of Craig Thomson, Prime Minister Julia Gillard enters 2013 facing the political fight of her life. Wells Haslem Special Counsel, Julie Sibraa, examines what Labor can do to pull off an unlikely win on 14 September.

Say what you like about Julia Gillard, but don’t ever say she’s not up for a fight.  From the minute she ousted Kevin Rudd in June 2010 and became Australia’s first female Prime Minister, she’s been under constant fire from all sides and all the time carrying some heavy political baggage.

After a stumbling and often inept election campaign in August 2010, she limped back into government holding a one vote shield in the Parliament, facing the fury and frustration of a barely vanquished Tony Abbott and a public fully expecting to be going back to the polls in six months.

A necessary but thankless deal with the Australian Greens heralded her first and most controversial backflip – the introduction of a carbon pricing scheme to commence on 1 July 2012, the very policy she told Prime Minister Rudd to dump to save the Government from certain electoral defeat.  Even more mystifying was the decision to call its first phase, before the introduction of the cap and trade scheme, the Carbon Tax.  A vote loser if ever there was one.

This was followed by the commitment to bring the Budget back into surplus in the 2012/2013 budget. 

The pundits said this was simply irresponsible in a time of such economic uncertainty when governments should be increasing expenditure and cutting taxes not cutting spending and increasing revenue.  

But this was always a no-win decision because once Swan announced a surplus was no longer possible thanks to dwindling revenues and the evaporation of expected mining tax revenues, their opponents are having a “Labor can’t manage the economy” field day. 

Then there was the decision to back then Liberal now Independent MP Peter Slipper for the position as Speaker of the House of Representatives after serving Labor Speaker Harry Jenkins stood down from the position to “spend more time in his electorate”.  What began as a piece of political mastery in gaining an extra vote for the Government in Parliament, quickly degenerated into tawdry scandal and accusations, then undermined by the necessary expulsion of Craig Thomson from the Labor Party, culminating in some of the most vicious and vitriolic mudslinging seen in Parliament for quite some time.  
It also resulted in one of the Prime Minister’s most impressive Parliamentary performances – the now famous “misogyny” speech directed at the Opposition Leader that quickly went viral and served as an inspiration to women around the world.

It was this moment that more than any exemplified the kind of courage and fighting qualities Julia Gillard has and how she got to be Australia’s leader and first female Prime Minister.  When things get really tough, when the media and anyone else with an opinion on politics declare “it’s over”, that’s when we see her at her best.

She’s also not averse to taking some political risk.  She leapt out of the blocks in 2013 announcing an election date eight months ahead, taking everyone, including her own Party, by surprise. Tossing away what conventional wisdom says is one of the main benefits of incumbency - the element of surprise - she is clearly banking on Abbott and the Opposition exposing themselves as a budget and policy free-zone. 

And as the Opposition starts the inevitable pre-election jostling around who will get the plum jobs and perks of Government, Gillard might be hoping the voters will not take kindly to an attitude that they’ve got the election in the bag.  

It’s also possibly the 2013 version of Paul Keating’s “I’m going to do you slowly” jibe to John Hewson, when he asked why Keating didn’t call an immediate election.  And we all know how that one ended. Hewson lost the ‘unlosable’ election.

The polls initially gave Gillard a positive start to 2013 with the first Newspoll showing the two-party preferred vote narrowing to 51-49 to the Coalition – a significant comeback from the 59-41 poll taken in April 2012, and the fourth out of five polls showing the two parties nearly neck and neck.  It was starting to look like a positive trend was emerging for the Government.

But the most recent Newspoll taken after her election announcement (with the media calling it “eight months hard Labor”) and news of the Craig Thomson arrest, reversed that quite dramatically, with the two-party preferred vote widening back out to 56-44 and an alarming 6 per cent drop in the ALP primary vote, from 38 to 32. 

To say Julia Gillard faces a monumental challenge is an understatement.  Winning the next election seems nothing short of climbing Everest without oxygen.

So what can she do?  She needs to hold her nerve and get out on the front foot with a positive message in the areas of policy that really matter to the majority of Australians – the economy, jobs, health, education and paid parental leave.  She needs to demonstrate and most importantly, communicate her legislative and policy achievements even in the most difficult circumstances of a minority government.  

The policy areas voters still consider the ALP better able to manage are education and health.  These two areas encompass some of the voter’s broadest areas of concern – their children’s/grandchildren’s future and the ability of themselves and loved ones to access high quality medical care.

Expect the Prime Minister and every backbencher to campaign hard on the long term benefits of the National Broadband Network, the implementation of the Gonski reforms to education with its increased funding to schools and the rollout of the ground breaking National Disability Insurance Scheme (NDIS).  The fact the Opposition supports the NDIS will be of little relevance. It’s a Labor idea and a Labor policy that will positively affect the lives of hundreds of thousands of families around the country who struggle to support a family member with a disability. At the same time as highlighting these policies, Labor will be campaigning locally against the spending cuts to education and disability support being undertaken by the conservative State Governments, particularly in NSW and Queensland. In the key western Sydney seats, expect highly localised campaigns from MPs targeting traditional state issues like law and order.

And back to carbon pricing – the reform everyone said would lose Labor government. It’s been in for six months and already the voters’ anger is dissipating as the dire prophesies of the Opposition scare campaigns fail to materialise. Add to that some pretty extraordinary weather patterns through the summer with devastating results and voters might start to think differently about the reality of climate change. 

When all is said and done, the phrase “it’s the economy stupid” rings true. The economy and its impacts on the everyday lives of Australians remains one of if not the top political issue.  And Labor has a positive story to sell that, despite all the global endorsement Australia receives, does not seem to have made an impact on voters who traditionally tend to believe the Coalition is better capable of managing the economy than Labor.

Even though the impact of the fragile global economy on Australia is still a real challenge for the Government, recently highlighted by the slight rise in unemployment to 5.4 per cent in December, which remained steady in January, Australia’s economy has largely withstood the buffering from a range of external sources. Julia Gillard needs to claim credit for presiding over good economic management and fiscal discipline.  Despite the bias towards the Coalition, their grasp on matters economic appears flimsy to say the least, with some of their more credible performers sitting on the economic policy sidelines.  Most of their rhetoric to date has relied upon the same simplistic messaging and negativity deployed to most areas of policy – come the election, they will need to do significantly more.

It would be exceptionally naïve and foolish to say that for Julia Gillard and Labor this election will be anything other than one of the toughest. Like all election campaigns, the real fight takes place in the marginal seats.  It is more than likely that Western Sydney alone will determine the outcome of the election with a swathe of Labor seats currently set to fall.  If this happens, Tony Abbott will be Australia’s next Prime Minister.

But you can never write off a fighter. Julia Gillard has come through the other side of two and a half of the toughest political years that can be imagined. But not only has she come through it and gotten off the canvas, but she’s shaping up for the political fight of her life.

The State of the states

Much has been written about the impact of state governments on federal voting patterns and vice versa. Although voters do clearly distinguish between the two jurisdictions and their issues, traditionally there has been a certain degree of voters hedging their bets when it comes to State/Federal colours.  So looking at the State political environment in 2010 and the Federal election result and comparing the situation in the States now is useful.

In NSW the ALP only lost one seat held by a sitting member in 2010, Bennelong, previously held by Prime Minister Howard, with former tennis star John Alexander for the Liberal Party defeating Maxine McKew.  It also lost the seat of Macquarie but the seat’s boundaries had been substantially changed following a redistribution in NSW and Labor was fielding a new candidate following the retirement of the popular Labor MP Bob Debus.  The seat was won by another popular Liberal MP who previously represented the seat of Greenway, Louise Markus.

This was a remarkable result given the State Labor Government was in its death throes which resulted in a wipeout for Labor the following year.  Possibly the one positive to come from Julia Gillard calling an early election was that many Liberal candidates in key Labor-held western Sydney seats had not been preselected and started the campaign late.

Although Barry O’Farrell has been at times criticised in the media for not doing enough, quickly enough, to justify his mandate, he is nonetheless still riding high in the polls.  That, alongside the ongoing ICAC investigation into alleged corruption by two former Labor MPs which is expected to continue over the next few months, puts Labor in a perilous position in NSW.  Not even the formidable marginal seat campaigning of NSW Labor would seem likely to withstand such a challenge.   

So assuming some losses in NSW, that means Labor needs to pick up in other States.  But where?  Although the worst electoral result in the 2010 federal election took place in WA where Labor managed just 31 per cent of the primary vote, the most electoral damage in 2010 was suffered in Queensland, where Labor lost seven seats with a primary vote of 33.58 per cent. This can be attributed to several factors - the dumping of Queenslander Kevin Rudd, the mining tax and the unpopularity of the then State Labor Government.  

In 2013 Queensland has a LNP Government led by Campbell Newman that almost wiped out the Labor Party in the election held in March 2012. Since coming to office, Newman has not done any favours to his federal counterparts by announcing the axing of tens of thousands of public sector jobs, cut spending and foreshadowed further privatisations and asset sales. A December 2012 poll undertaken by market research firm ReachTEL revealed that as a result of the Newman Government, 45.1 per cent of Queensland voters are less likely to vote LNP at the upcoming federal poll. This would give plenty of hope to Labor that some of those lost seats could be regained in 2013.  We can expect the federal campaign in Queensland to focus on Campbell Newman’s policies and their impacts on the people of the state, with the warning that a vote for Tony Abbott will mean more of the same on a federal scale.

In contrast to the poor results in NSW, QLD and WA, the southern states of Victoria, South Australia and Tasmania all delivered two-party preferred swings to Labor of 1.0, 0.78 and 4.0 per cent respectively.  

In the Prime Minister’s home State of Victoria Labor actually picked up two seats from the Coalition while losing the seat of Melbourne to the Greens.  Since 2010 Victorian voters have also elected a State Coalition Government, a somewhat unexpected result given the solid performance of the previous Labor Government.  Since then the voters of Victoria haven’t seemed all that happy with their choice, and the most recent State poll (Newspoll December 2012) has Labor ahead on the two party-preferred vote by 55-45, repeating the result of the poll taken in October and therefore suggesting a trend.  This would seem to augur well if translated to a Federal election, although there are few, if any, winnable Coalition held seats, which makes it difficult to make up for losses in NSW or elsewhere.

2013 is also a State election year for Western Australia. The current Government has an overwhelming lead in the polls and should win comfortably come election time on 9 March.  
It would be difficult to see Labor doing worse federally in WA than in 2010 but the opportunity to vent any anti-Labor sentiment at a State election may take out some of the sting.
Given the bet hedging scenario (and current polling), the residual Labor states of South Australia and Tasmania could be problematic for Labor.

At the 2010 election in Tasmania there was a 4.0 per cent swing to Labor, which won four of the five seats, with the fifth being won by Independent Andrew Wilkie.  Recent state polls in Tasmania show the State Labor Government well behind the Coalition in the polls with the State not due to go to an election until May 2014.  This is a serious problem for Labor and could result in the loss of two to three seats. 

No seats changed hands in South Australia in the 2010 Federal Election, which was a fairly remarkable result.  The longevity of the current State Labor Government, whose election is also not due until 2014, poses a risk but is being mitigated by the recent leadership instability in the state Coalition. Given all these factors status quo could very well be the outcome again federally in South Australia.

There is unlikely to be any change to the two Labor-held seats in the ACT, but the election result in the Northern Territory election in 2012 indicated the second seat held by longstanding Labor MP Warren Snowden could also fall to the CLP.