Gillard Fights History of Australian Political Rebounds

Photographer: Ian Waldie/Bloomberg

Julia Gillard, Australia's prime minister, has struggled to focus voter attention on her record of passing legislation, including taxes on mining profits and carbon emissions. Close

Julia Gillard, Australia's prime minister, has struggled to focus voter attention on... Read More

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Photographer: Ian Waldie/Bloomberg

Julia Gillard, Australia's prime minister, has struggled to focus voter attention on her record of passing legislation, including taxes on mining profits and carbon emissions.

Australian Prime Minister Julia Gillard, accustomed to prevailing against the political odds, has history stacked against her quest for re-election.

The nation’s first female leader and her ruling Labor Party, in the first minority government since World War II, trails the opposition Liberal-National coalition by 16 percentage points, a May 7 Newspoll shows. The margin four months from an election is double that of predecessors Paul Keating and John Howard, who with more time in hand both recovered to win.

“The victories of Howard and Keating show there are historical precedents for big comebacks by incumbent prime ministers, but not of the magnitude that Gillard needs,” said Martin O’Shannessy, chief executive of Newspoll. “There would need to be a large external, unpredictable game changer or a complete collapse within the coalition. A Labor wipe-out looks more likely than either of those scenarios.”

With the government indicating today’s budget will show a A$17 billion ($17 billion) drop in tax revenues this fiscal year, limiting her ability to fund pre-election promises, the fate of Gillard, 51, on Sept. 14 may already be out of her hands. In past come-from-behind wins, luck played a part. Labor’s Keating benefited in 1993 from an opposition proposing a complex sales tax revamp that proved unpopular. Coalition leader Howard’s presence in Washington on the day of the Sept. 11, 2001, terrorist attacks gave him an international stage to show statesmanship and promise stability at a time of tragedy.

No Walkover

Grahame Morris, a former chief of staff to Howard, predicts the election will be closer than polls indicate, with many voters deciding who they will vote for on the day.

“The result will probably be decided in about 12 marginal seats throughout Australia that will swing to the coalition,” he said in an interview. “I don’t think it will be a walkover for Abbott.”

The survey by Newspoll, which says it has accurately predicted the result of all 56 state and federal elections since it began in 1985, showed the government trails the Tony Abbott- led coalition 31 percent to 47 percent among respondents’ first choices. Labor hasn’t led in that measure since July 2010, a month after Gillard ousted her Labor colleague Kevin Rudd in a backroom party coup. Newspoll is 50 percent owned by News Ltd. and 50 percent by Millward Brown Inc., a market-research company.

The poll’s two-party preferred measure, designed to gauge which party is likely to win enough seats to form a government under Australia’s preferential voting system, showed the coalition with a 56 percent to 44 percent lead over Labor. It has a margin of error of 3 percent.

Unpopular Abbott

Other polls also show Gillard behind. A Nielsen survey published April 15 in the Sydney Morning Herald showed Labor’s primary vote on 29 percent and the coalition on 49 percent. On a two party basis, it showed 57 percent support for the opposition against 43 percent for Labor. The poll has a margin of error of 2.6 percent.

Potentially keeping Gillard in the game is the fact Abbott isn’t popular either, due to perceptions he’s negative and too conservative. The Newspoll poll showed 51 percent of voters were dissatisfied with his performance, with 36 percent in support, compared with 61 percent dissatisfaction with Gillard.

The prime minister’s support has been sapped by infighting in her party and perceptions of untrustworthiness triggered by the way she came to power in 2010. That’s been exacerbated by media and opposition hostility toward her government and an economy under strain from a strong currency, creating pockets of high unemployment in areas traditionally supportive of her party.

Currency Woes

Even so, Australia’s headline economic figures under Gillard compare favorably. The unemployment rate of 5.5 percent in April is less than the 6.9 percent Howard faced during his September 2001 U.S. trip. When Keating went to the polls, the jobless rate was about 11 percent.

The national employment strength may not be enough to convince voters in seats that traditionally support Labor. An Australian currency that’s risen about 66 percent against its U.S. counterpart since late October 2008, triggered by demand for commodities, has created a two-speed economy with voters in manufacturing and services industries in the country’s south and east in the slow lane.

Gillard cobbled together a minority government in September 2010 with support from independents and Greens after the closest election in seven decades. She broke with protocol by declaring the date of the election in January, giving Abbott more than seven months to prepare, while Keating and Howard called their elections one month beforehand.

“Labor is looking for a game changer in a series of mistakes by Abbott, and at the moment he’s keeping his discipline,” said Morris, now director of political lobby group Barton Deakin.

Tampa Boost

Morris said Howard received a boost from his refusal in August 2001 to let the Norwegian freighter MC Tampa enter Australia and offload 438 refugees it had rescued in international waters, at a time Australians were concerned about the number of people seeking asylum in the country.

Less than a month later, when Howard was hosting a press conference in Washington, an election win was still unlikely. Voters were wary due to an economic slowdown, with the implementation of a 10 percent goods and services tax feeding a rise in fuel and other prices.

On Sept. 11, as televisions showed images of a plane plunging into the World Trade Center, Howard spoke of the “horrific, awful event” occurring in New York.

Increased Majority

That night, the Australian leader read a letter he had sent to President George W. Bush and the people of the U.S.: “We will stand by them, we will help them, we will support actions they take to properly retaliate.”

The next poll showed support for his government had jumped 6 percentage points. Three months later, the man later lauded by Bush as “a man of steel” won the election with an increased majority.

“The moment 9/11 happened Howard had the election won,” said Andrew Hughes, who conducts political-marketing research at the Australian National University in Canberra. “It seems Gillard’s only chance of winning from here would be an event in which she could show her leadership credentials during the country’s time of need.”

Eight years earlier, Labor leader Keating narrowed a similar poll deficit to claim what he described in his election night speech in March 1993 as the “sweetest victory of all.”

Abbott Discipline

Keating’s campaign, described by some media commentators as unwinnable, was aided by gaffs by opposition leader John Hewson. In an appearance on prime time television, Hewson struggled to explain how a goods and services tax he intended to implement would affect the price of a birthday cake.

That contrasts with Abbott, who has been careful not to release specifics on how pledges such as boosting paid parental leave for mothers will be funded, while criticizing Gillard for breaking her own budget promises.

Labor also benefited as Keating was able to unite the party under his leadership, according to Greg Turnbull, who was his senior media adviser in 1993.

“Keating had been in parliament for a quarter of a century by the time of that election, and he was able to galvanize Labor,” said Turnbull. “Gillard displays a couple of his key characteristics -- she is determined and she’s a fighter.”

Gillard Agenda

Gillard, a former union lawyer, has sought to sell her policies of boosting spending for education and health care.

She’s had wins in both areas, with Abbott supporting a rise in the public health levy to fund increased disabled-care funding, while New South Wales -- the biggest state and controlled by the coalition -- last month declared its support to boost education spending throughout the nation by A$14.5 billion over six years.

Gillard has struggled to focus voter attention on her record of passing legislation, including taxes on mining profits and carbon emissions. That message has been diluted by party infighting that culminated in March, when Rudd was urged by a Labor colleague to challenge Gillard for the second time in little more than a year.

“It seems there hasn’t been a week in the term of this minority government that hasn’t featured either bad management or bad luck, or both,” Turnbull said. “I don’t think Gillard can win from here,” although she could make up some ground before September, he said.

Gillard has accused the opposition of using gender rhetoric to undermine her leadership, a contention Abbott refutes.

“We know things can be better,” Abbott, 55, said on April 27 in Adelaide. “We know we can have a government that doesn’t try to divide Australians. We know we can have a government that doesn’t play the outdated class war card.”

Comeback Unprecedented

Abbott, a Rhodes scholar and former journalist who once studied for the priesthood, is pledging to scrap Gillard’s carbon and mining-profits taxes and revamp an industrial relations program he says gives too much power to unions. He claims Labor’s policies have damaged the economy, after the government backed down in December from a pledge to report a surplus when the budget is released in Canberra today.

The budget will focus on delivering jobs and economic growth, as well as making “big investments” in education and disability care beyond the four-year economic cycle, Treasurer Wayne Swan told reporters in Canberra today.

“The length of time that Labor has been behind combined with the size of the deficit would make a comeback from here unprecedented,” said John Warhurst, a political analyst at the Australian National University in Canberra.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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