Rudd Set to Avert Wipeout as Labor Faces Australia Poll Loss

Kevin Rudd, Australia's prime minister, meets a worker at Futuris car parts factory in Melbourne on Sept. 4, 2013. Photograrpher: Stefan Postles/Getty Images Close

Kevin Rudd, Australia's prime minister, meets a worker at Futuris car parts factory in... Read More

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Kevin Rudd, Australia's prime minister, meets a worker at Futuris car parts factory in Melbourne on Sept. 4, 2013. Photograrpher: Stefan Postles/Getty Images

Kevin Rudd vowed to save Labor from a “catastrophic” Australian election defeat when he took over as leader in June. While polls show he’s narrowed the gap, the party still faces eviction after six years in power.

Under Rudd, Labor initially erased a 14-point deficit with the Tony Abbott-led Liberal-National coalition. As his popularity waned over the course of the five-week campaign the gap crept back to eight points and he was eclipsed as preferred leader by Abbott. If Labor loses, the immediate question would be whether Rudd stayed on as opposition leader.

His struggle to revive Labor’s fortunes ahead of the Sept. 7 ballot underscores the challenges facing Australia’s oldest party, which has been battered by corruption scandals, leadership spats and the loss of power in the four largest states. Labor as the traditional party of the worker has struggled to stem a loss in membership as a decline in manufacturing and a rise in education levels sees voters drawn to coalition policies aimed at the middle class.

“Rudd’s comeback has probably saved it from a complete wipeout, but it hasn’t been nearly as successful as Labor would have hoped,” said Paul Williams, a political analyst at Brisbane’s Griffith University. “The damage to Labor was already done.”

The party may face further turmoil if Rudd, who mounted two challenges to predecessor Julia Gillard and was criticized by Labor lawmakers for undermining her government, opted to return to the back benches in parliament rather than resign his seat.

Salvage Seats

Opinion polls forecast Rudd will salvage some districts, while failing to keep Labor in office. The party needs to win at least five additional seats in the lower house of parliament, where government is formed, to get a majority, compared with four for the coalition. Labor currently has a minority in the 150-member house.

The coalition leads Labor by 54 to 46 percent on a two-party preferred basis, a Newspoll published Sept. 2 in the Australian newspaper showed. The survey of 1,116 voters was held Aug. 30-Sept. 1, and had a 3 percentage point margin of error. Such a swing to the opposition from the 2010 election -- if uniform across the nation -- would see Labor lose about 14 seats.

Before Gillard was ousted by Rudd in a party-room vote on June 26, Labor trailed the coalition by 14 points. That deficit would have translated into a loss of about 30 seats.

Sold Themselves

“Politics in Australia have come to be dominated by the Liberals, who have sold themselves as a non-class party that represents the whole community,” said Frank Bongiorno, a historian at the Australian National University in Canberra. “The big issue facing Labor after the election is whether it has the will to reform itself to again make itself palatable to the mainstream.”

Internal tensions and corruption scandals have overshadowed Labor’s achievements under Rudd, 55, and Gillard, 51, who led a minority government for nearly three years. Since coming to power in December 2007, the party has implemented a 30 percent tax on coal and iron ore profits, paved the way for greater funding for government-run schools and disabled care, and apologized to the indigenous population for past abuses.

During the campaign, Rudd has promoted the party’s economic record leading Australia through the 2008 global financial crisis, and said Abbott’s planned spending cuts would risk sending the country into recession. He’s adopted a tougher approach to asylum seekers attempting to arrive in Australia by boat, pledging to send them to camps in developing nations such as Papua New Guinea.

Fixed Price

Rudd has also vowed to scrap a fixed price on carbon emissions by moving a year early to a trading mechanism. He’s taken steps to end the infighting that saw three leadership contests in as many years by changing internal party rules for selecting or removing a leader.

“It could take a sobering defeat for real changes to be made” within Labor, said Rob Manwaring, a lecturer in politics at Adelaide’s Flinders University who’s writing a book on the party. “Some of Labor’s problems are internal, some are policy-related and some are structural.”

Founded more than 120 years ago with unions as its cornerstone, Labor formed a minority government in 1904 -- the first Labor party worldwide to govern at a national level.

Fortunes Waned

Its fortunes have waned as the unions have declined and manufacturing heartlands have been battered by a strong Australian dollar that undercut competitiveness. Economic growth is forecast by the central bank to slow to 2.25 percent by the end of the year and Treasury estimates unemployment will reach an 11-year high by the middle of 2014. Demographic shifts have turned some of Labor’s more loyal areas on the fringes of state capitals into middle class districts where the policies of the coalition resonate.

“Labor has to offer something the coalition cannot,” said Griffith University’s Williams. “That’s a tough one, because the coalition has done a good job at making itself the catch-all party for Australia.”

Males identifying themselves as union members in their main job fell from 43 percent in 1992 to 18 percent less than two decades later. Labor’s membership was around 50,000 in 2007, according to a report by its national secretariat; the party said in an e-mailed statement it currently has about 44,000 members. The Liberal party -- the main wing of the coalition -- has more than 80,000 paying members, according to its website.

Structural Decline

The report commissioned by Gillard after the 2010 vote that saw Labor forced to cobble together a minority government to stay in power said “the party is in decline” structurally. “Membership continues to age,” the report said. “Members feel alienated and disenfranchised.”

About half of Labor’s candidates are selected from unions, according to Manwaring.

“Unions that represent an increasingly smaller part of the workforce have a disproportionately large influence on the party,” said Bongiorno, co-author of “A Little History of the Australian Labor Party.”

The last losing prime minister to stay on as opposition leader was Labor’s Gough Whitlam, whose government was dismissed in 1975 by Governor-General Sir John Kerr and who went on as opposition leader to contest and lose elections in 1975 and 1977.

Labor’s Future

While nine present and former Labor ministers are not standing for re-election, Deputy Leader Anthony Albanese, 50, Education Minister Bill Shorten, 46, and Treasurer Chris Bowen, 40, have been touted as future leaders if Rudd were to resign.

After the election, Labor needs to “be in the business of maintaining continuing values but reforming our structures and policies consistent with the challenges of the future and the different compositions of our society,” Rudd told reporters in Canberra today. He declined to answer questions regarding his future after the ballot.

He may be hard to dislodge if he wanted to stay. Sixty percent of caucus members must now back a leadership ballot if Labor is in opposition, up from a third previously.

“Rudd has just got the leadership back again and may well argue that he hasn’t been given enough time to turn the party’s fortunes around,” said Manwaring. “He may not rush off.”

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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