The ugly stoush Labor has to have

If there’s no challenge this week Labor's rupture will come after the election, when the fight will be between Kevin Rudd’s media-friendly leadership and Bill Shorten’s union power.

* This piece was written prior to Tony Windsor's announcement that he will not contest the seat of New England at the September federal election. See: Windsor has blocked the Rudd challenge.

The corridors of power have been unusually quiet this week. When speculation over a Rudd challenge filled the papers a few weeks ago, a gaggle of around a dozen journalists waited outside the Caucus meeting to see if a leadership change was taking place.

This week, only four journalists loitered in the hall – it’s as if even the press pack is tired of this story.

When the Caucus members streamed out, the blandness of their expressions revealed little other than their own sense of ennui. They don’t just want the leadership speculation to end. They want this term of government to be over.

With Labor currently expected to retain between 30 and 40 lower house seats after the election, it will be a leaner, meaner Labor team that holds the likely Coalition government to account.

That much looks fairly certain, but a hell of a lot of other things do not. Most analysis of which seats will fall is based on crude ‘uniform swing’ reasoning – that is, if Labor is down 8 percentage points in the two-party preferred vote, the seats with less than an 8 per cent margin are expected to go.

Nobody really believes that analysis, but it’s a rough way to say ‘Labor’s screwed’. The reality on election day will come down to subtle shifts in sentiment – some condemned MPs will survive, and some assumed to be survivors will fall.

That pattern, which we will know more about closer to election day after more precise seat-by-seat polling has been done, or when internal party polling is leaked, will to a large extent shape the next parliament.

As explained previously, an Abbott government is extremely unlikely to command absolute control of the senate, but might get effective control by forming closer ties with a right-leaning independent or two (Can Abbott pay the price for carbon repeal? June 21).

If that happens, the only ‘holding to account’ that Labor does will be through the newspapers, and by hampering the passage of legislation by moving spurious amendments to legislation or dragging its heels through the committee process which scrutinises bills.

More likely is that the Senate will have some degree of balance, with the Greens holding the balance of power – their electoral strategy is very much skewed towards maintaining a strong presence in the upper house. This will be no mean feat, as their primary vote has tracked down since the departure of former leader Bob Brown. The latest polls put their primary vote at around 9 per cent, whereas at the last election it was 11.8 per cent.

On the Labor side, the composition of the lower house will be all important. The big question is whether supporters of Kevin Rudd or Bill Shorten are in the majority. Nobody can predict that, but knowing which of these two leads the party into 2014 is all important.

If it is Rudd, the parliamentary Labor Party will have embarked on a long process of redefining itself and cleansing itself of external union influence. For the ALP that is so radical a shift that it could destroy the party. If it does not, there will be some kind of centrist, socially progressive party led by one of Australia’s most popular political figures – Kevin Rudd.

With Rudd at the helm, holding an Abbott government to account would be easier, simply because Rudd is such a media darling. The magnetic attraction of Rudd-the-celebrity would likely trump any focus on Rudd-the-party-manager (which would be a much less flattering tale).

If it is Shorten leading the party, the ALP will be emboldened to continue developing as a union-influenced party with deep roots into the labour movement (which Rudd does not have). Shorten would be marshall-in-chief for the street protests and industrial action that are likely to dog Abbott’s first term.

Why bring all this up now? Because, dear reader, the junction that the Labor Party has been speeding towards for some time is not going to vanish if there is no leadership challenge this week. If there is no challenge, the junction will be encountered after the election, and the party will veer one way, or the other.

There is a third contender in the frame, of course. Greg Combet, industrial warrior of the waterfront, has all the policy brains and corporate memory to be a good opposition leader and potential PM. But the work has begun early to make sure he does not get a look-in – have a look, for example, at the backgrounding against him evident in a Daily Telegraph story published yesterday.

Readers can sift through that story and work out for themselves whether it will be Rudd’s or Shorten’s fingerprints that will be found on Combet’s neck.

Australia is at a historic turning point. The economy is slowing more rapidly that most thought, and as BCA boss Tony Shepherd points out in today’s papers, the economy will go through painful structural adjustments in the next couple of years.

Likely Treasurer-to-be Joe Hockey even seems to have grasped this, hinting in a speech on Monday night that the Coalition might have to stimulate a stalling economy. He said: “I would not be doing my job if I had not already given some thought as to how economic activity could be safeguarded should the downturn in the private sector become more protracted.”

And making this turning point all the more acute will be the new shape of the Labor Party. Will it be a Rudd populist opposition lambasting Hockey’s ‘debt and deficit/wasteful spending’, or a grass-roots Shorten opposition attacking any attempt to tweak the Fair Work Act?

We’re getting a little ahead of ourselves now. The twelve weeks to September will be the window in which the groundwork for the new turn in Australia will be laid.

There is still the slim possibility of a leadership challenge, but more likely there will be subtle, behind the scenes rearranging of the deckchairs, and of course, plenty of character assassination between the two/three contenders for the job of rebuilding Labor. 

It’s not going to be pretty.