Aussie Political History not on Gillard's Side

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IN THE wake of a leadership ballot last week that saw Australian Prime Minister Julia Gillard win a vote of confidence from her parliamentary colleagues, the nation’s top business trade union leaders have been calling for the government to refocus on running the country. Unfortunately, history suggests that this will be far easier said than done.

Ms Gillard’s future is also far from assured. No Australian prime minister who faced a leadership challenge has ever gone on to unite his party or win an election.

The leadership struggle was a major distraction, said Business Council of Australia president Tony Shepherd.
The Australian Retailers Association (ARA) called for continuity. The last thing retailers or consumers needed, declared ARA executive director Russell Zimmerman, was further instability resulting from unnecessary ministerial changes in the wake of the ballot.

The trade union movement, the traditional backbone of Ms Gillard’s ruling Labor Party, had a similar message. Last week’s ballot, insisted Australian Council of Trade Unions secretary Jeff Lawrence, should put an end to leadership speculation, otherwise it would be to the “detriment of Australian workers”.

At first glance, the idea that Ms Gillard will now be able to focus on running the country without fear of being stabbed in the back by political rivals within her own party seems logical enough. After all, her victory in the party room involved the highest winning margin – 71 votes to 31 – of any Australian prime minister over a challenger in the country’s history.

Her nemesis, former prime minister Kevin Rudd, said he bears “no grudges” and ruled out a further challenge.

A closer look at the events leading up to the challenge, as well as a brief survey of Australian political history, however, suggests that the national soap opera is far from over.

Last week, Mr Rudd was looking for revenge, having been ousted as prime minister in 2010 by Ms Gillard in what observers still refer to as a party-room “coup”.

The language in the days leading up to last week’s party vote was vitriolic. Prominent Gillard loyalists lined up to attack Mr Rudd in personal terms, accusing him of chaotic leadership and ill-treating staff.

Mr Rudd had his supporters. As tensions rose, five ministers declared they would vote against the Prime Minister. Critics described Ms Gillard as cold and insincere and cast aspersions on her private life. The scathing comments are unlikely to be easily forgotten by either side.

Meanwhile, Ms Gillard now has to win over the voters. Labor continues to trail the opposition conservative coalition in the opinion polls. And while she is clearly popular among party colleagues, public opinion surveys show that voters continue to prefer Mr Rudd.

The economy also needs attention. A mining boom helped Australia avoid a recession in 2008, and is continuing to power growth. However, the increasingly strong currency is hurting manufacturing. Last year, the economy recorded its worst annual job creation performance in 19 years.

Despite his protestations of loyalty to Ms Gillard in the wake of last week’s leadership contest, Mr Rudd will be looking to take advantage of any sign of weakness. In doing so, he will have precedent on his side.

In May 1991, after unsuccessfully challenging then Prime Minister Bob Hawke for the party leadership, Mr Paul Keating declared his loyalty to him. Later that same year, however, as unemployment rose and Mr Hawke’s hold on the government weakened, Mr Keating changed his mind. In December, he became prime minister after launching another leadership challenge.

Australian politics is no stranger to personal feuds, many of which have had little to do with major policy issues. Other Australian prime ministers have faced similar party- room revolts, among them John Gorton (1971) and Malcolm Fraser (1982).

An election is due in Australia next year, and public opinion polls have consistently shown that Labor is heading for defeat. Trailing the Liberal-National opposition by 10 points in opinion polls, Ms Gillard’s administration is seeking public support behind an agenda that includes controversial taxes on mining profits and carbon emissions due to take effect on July 1. She leads a minority government that relies on independent and Green party lawmakers to pass legislation.

Labor MPs may not like Mr Rudd, but the fact remains that voters do. If the party’s electoral support does not improve as polling day approaches, MPs may feel they have no choice but to back the horse most likely to win.
It is a prospect Ms Gillard can hardly relish. The back-stabbing is not over yet.

(C) Singapore Press Holdings Limited 

Key Political Risks

Asia is the fastest growing region in the world, and is likely to remain so in 2013. However, a number of risks cloud the picture.

The good news is that domestic demand in the region remains strong and should continue to cushion the impact of weaker external demand on overall economic growth. The completion of national elections in Japan and South Korea in December 2012 should also help reduce political uncertainties. 

But Asian governments will need to guard against the adverse impact of prolonged easy financial conditions on inflation.

Rising inequality also continues to threaten social stability. Ethnic and religious rivalries remain just below the surface in many countries. When combined with government corruption and (in some countries) high youth unemployment, this could become a deadly mix. This seems particularly true of China.

Territorial disputes also require close monitoring. Much diplomatic activity in the new year is likely to be centered on finding ways to reduce tensions over resource-rich islands in the South China Sea, where Beijing's claims overlap with those of Japan, Vietnam and other Southeast Asian states. South Korea and Japan also have rival territorial claims.

North Korea remains the wild card. Inclined to believe its own propaganda, Pyongyang's new leadership could miscalculate, making belligerent moves that plunge the region into a military conflict that nobody wants.

About Me

My name is Dr Bruce Gale and I am a senior writer with the Singapore Straits Times. I studied at  LaTrobe University (BA Hons) in Melbourne and later at the Centre for Southeast Asian Studies at Monash University (MA). My PhD thesis, which focussed on Malaysian political economy, was completed at the Malaysian National University (Universiti Kebangsaan Malaysia) in 1987.

From 1988 to 2003 I was Singapore Regional Manager for the Hong Kong based Political and Economic Risk Consultancy (PERC). 

I have written several books and articles on Southeast Asian affairs, including Political Risk and International Business: Case Studies in Southeast Asia (Pelanduk Publications, 2007). Books on language include Mastering Indonesian: a guide to reading Indonesian language newspapers (Pelanduk Publications, 2008)

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