Why Shorten needs Labor to 'lose well'

One cannot fault Julia Gillard for a lack of optimism. The prime minister continues to put the hard sell on the states to sign up to the Gonski school funding reforms, even though in her heart of hearts she knows it’s not impressing voters as it should, and that it will all be torn up if an Abbott Coalition government is formed in September.

South Australia signed up on Friday and the ACT and NSW are also on board, though last week’s generous increase in the funding offered to Western Australia has given a miffed NSW government new cause to walk away from the deal. And yet Gillard keeps on having the conversations with state and territory leaders. It’s her signature issue, and she won’t let it go.

By while Gillard is steering her government down one path, in the background Labor MPs, who are near-grief-stricken at the thought of losing their seats and careers in politics, agitate for the return of Kevin Rudd or the early rise of Bill Shorten.

The Gillard and Rudd-or-Shorten paths offer vastly different outcomes. 

Gillard’s determination to see this term of government through as leader is about setting up a moral high ground for the party in 2014 – ‘we got Gonski done’, ‘we tried to end the digital divide’, ‘we priced carbon’, ‘we got a national disability insurance scheme up’ and so on.

The Gillard path is also about giving her leadership a legacy, in which the first female prime minister was also a full-term prime minister. Losing an election ‘well’, with some modicum of pride and some ‘true-believer’ policy achievements in place is, to the PM, more important than the ever-receding chance of a more cynical victory under Rudd or Shorten.

The other path, which must haunt the dreams of Shorten, involves grasping the nettle and throwing out a serving prime minister for the second time in three years. Whether Gillard graciously ‘steps aside’ or is ‘knifed’ (to use the language of the 2010 Rudd coup), in both cases she will have been pushed.

And who is doing the pushing? Bill Shorten used fairly concrete language on Thursday to say that it wasn’t him doing the numbers in caucus to see if a coup could succeed. He told reporters: “I categorically deny that there is canvassing going on that I'm involved in about the leadership.”

In contrast to most commentators, I cannot see any upside in a Rudd or Shorten coup taking place. Existing opinion polls that have Rudd’s popularity still high (though falling), do not take account of the ruthless attacks that would flow from the Coalition the minute he assumed the leadership – they have literally hours of footage of Labor MPs rubbishing Rudd as a leader and as a person capable of running the country.

Likewise for Shorten – though his prospects after the election look reasonably bright, he would only suffer personal damage if he was seen to be ‘knifing’ the very candidate he and his right-faction coterie installed when they got rid of the previous PM in 2010. To paraphrase Oscar Wilde's famous line in The Importance of Being Earnest, 'to knife one serving PM may be regarded as a misfortune; to knife two looks like viciousness'.

While commentators such as Barrie Cassidy on the ABC’s Insiders have been told (presumably by either Shorten or Stephen Conroy) that a leadership challenge is imminent, it’s worth stopping for a moment to consider the world of trouble that powerbroker Shorten is already in.

Many Rudd supporters within caucus have an axe to grind with Shorten, the lead 'faceless man' in the Rudd execution. And whoever leads the party, some of those Rudd supporters will be losing their seats in September. That’s a given.

And what do aggrieved ex-MPs do immediately after seeing their positions in parliament and their entire future political careers go up in smoke on election night? Why, they dish dirt. The dirtiest dirt. As fast and as furiously as they can.

Political operatives who have worked close to Shorten describe a meticulous and hard-working politician – not the kind of man to leave too many skeletons in the closet. However, if Labor loses power on September 14 in the way the polls suggest, many closet doors will be flung open. One former Labor staffer told me he though the first dirt would be flung “by 7.30pm that night, if not earlier”.

There will be attempts to smear not only Shorten, but Gillard (his star pick) and the men who helped push her forward to replace Rudd – David Feeney, Stephen Conroy and Don Farrell.

There will, of course, be further revelations about Kevin Rudd, but then nobody will be much interested in them – we’ve heard just about every slight possible.

These important factors have been largely ignored in all the excitement of the latest ‘Rudd challenge’ stories – that Rudd is utterly discredited by his own side, and that Shorten has more to gain by not challenging.

Until the middle of last week, when Gillard made her disastrous speech raising abortion as an issue (when the Coalition has no plans to alter abortion law, even if it was a federal issue), it would have been a near certainty that Gillard would have had Shorten support through to election day. Labor losing well was the best thing that could happen for his ambitions to one day be PM.

Now that Gillard has lost one of her few trump cards, by alienating a lot of women through a shockingly ill-thought-out speech, Shorten (or even Rudd) must be more on a knife edge than ever about whether to get rid of Gillard and save friends and allies in Labor seats likely to fall with Gillard as PM.

But then both men will know that a whole heap of mud is about to be thrown on their side of politics. For Rudd, that’s why he shouldn’t stand.

For Shorten, that's also the reason he'd be wise not to.