From the boss down, new ministry has much to prove

MANY people in Julia Gillard's new ministry have much to prove. The list starts with Gillard herself, who has promised a more consultative way of governing, both with cabinet and the caucus, including new structures to involve backbenchers "at the ideas-generation stage".

By InvestSMART · 13 Sep 2010

By InvestSMART ·
13 Sep 2010

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Kevin Rudd has to show he can rehabilitate himself, and put the intense bitterness he must feel behind him. His challenge is to work constructively with Gillard, accepting that she has the last call in his area of expertise. He also has to show that, sleeves rolled up, he is a good enough negotiator to get the East Timorese to have the asylum seeker processing centre that Gillard has proposed.

His judgment in having his first "picture opportunity" as Foreign Minister-designate on Saturday with the American ambassador seems problematic.

It's not just that this sent a selective message to other countries, but it did seem to shout "Look at me".

Peter Garrett's move to the Schools portfolio gives him a fresh start to show he can perform competently. But Gillard has been caught between giving him a second chance and lacking full confidence in him. When she was education minister she had responsibility for higher education, schools and the Building the Education Revolution program. So did her successor, Simon Crean. Now she is saying higher education and the building program belong with the new Jobs portfolio of Chris Evans. This is a too narrow view of higher education, while the building program decision is transparent. (Garrett's problems with insulation make it politically impossible to have him oversee the program.)

Penny Wong, who has got the plum role of Finance, must demonstrate she can sell the government's economic message strongly.

Bill Shorten, who was a coup leader and is a big winner, becoming Assistant Treasurer and Minister for Finance Services and Superannuation, needs to prove he is as good as the hype that has surrounded much of his career. Various other coup-makers who have been promoted have to demonstrate they can do more than put together a putsch.

Greg Combet has to prove it really is possible to do what has so far been impossible for the Labor government win acceptance for a price on carbon. Stephen Smith must overcome some disappointment. Smith had to yield to Rudd in Foreign Affairs but with the consolation of a good portfolio in Defence.

Tony Abbott has something to prove, too, when he reshuffles his frontbench this week. He needs to clean out under-performers, or people who won't be there for 2013, and put in some fresh talent. It might involve painful decisions, but if these are going to have to be taken later, he should get them over now. There are two dangers in denying the restless talented a go. He will not have the best possible frontbench and some who feel their just case has been ignored might stir dissent.

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Frequently Asked Questions about this Article…

What are the main tests facing Julia Gillard's new ministry and why should investors pay attention?

The article says Gillard has promised a more consultative way of governing, bringing backbenchers into idea generation. Everyday investors may want to watch whether this new structure delivers stable, coherent policy making — because consistent government decision‑making can influence economic confidence and long‑term policy direction.

What challenges does Kevin Rudd face as Foreign Minister‑designate and how might that matter to markets?

According to the article, Rudd must rehabilitate his reputation, work constructively with Gillard (who has the final call in his area) and negotiate sensitive deals such as an asylum‑seeker processing centre in East Timor. His early optics — notably a criticised 'picture opportunity' with the US ambassador — suggest he needs to rebuild trust and credibility, which can affect perceptions of diplomatic stability investors monitor.

Why was Peter Garrett moved to the Schools portfolio and what are the key details investors should note?

The piece describes Garrett's shift to Schools as a fresh start but notes Gillard is caught between giving him a second chance and lacking full confidence. Higher education and the Building the Education Revolution program were assigned elsewhere, in part because Garrett’s problems with the home insulation controversy make it politically untenable for him to oversee the building program.

What does Penny Wong’s appointment to Finance mean for the government’s economic messaging?

The article says Penny Wong, holding the 'plum' finance role, must demonstrate she can strongly sell the government’s economic message. For investors, that means watching her public communication and policy clarity, which can influence confidence in the government's economic direction.

What responsibilities does Bill Shorten have in the new ministry and why does that matter for superannuation policy watchers?

Bill Shorten became Assistant Treasurer and Minister for Financial Services and Superannuation. The article stresses he needs to prove he lives up to the hype surrounding his career; for people following superannuation policy, his performance will be important to track as he now has direct responsibility for that area.

What is Greg Combet expected to achieve on carbon policy, and why is that significant?

The article says Greg Combet faces the difficult task of winning public and political acceptance for a price on carbon — something the Labor government has struggled to achieve. Success or failure on this issue would be a major policy outcome to watch, given carbon pricing implications for energy and related sectors.

How did Stephen Smith’s role change in the reshuffle and what should investors know?

Stephen Smith had to yield Foreign Affairs to Kevin Rudd but was given the Defence portfolio as consolation. The article suggests he must overcome disappointment; investors tracking defence policy or related contracting should note his new portfolio leadership.

What does the article say about Tony Abbott’s planned frontbench reshuffle and its potential impact?

The article argues Abbott needs to clean out under‑performers, add fresh talent and make potentially painful decisions now rather than later, or risk lower bench quality and internal dissent. For investors, this indicates the opposition’s team building is something to monitor as it shapes political alternatives and future policy debates.