Abbott’s Win Sown in 2010 Loss as Infighting Damages Labor

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Tony Abbott, Australia's prime minister-elect, center, stands with his wife Margie Abbott, second left, and their daughters Frances Abbott, left, Louise Abbott, second right, and Bridget Abbott after delivering his victory speech at the Liberal-National coalition's election function in Sydney on Sept. 7, 2013. Close

Tony Abbott, Australia's prime minister-elect, center, stands with his wife Margie... Read More

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Photographer: Brendon Thorne/Bloomberg

Tony Abbott, Australia's prime minister-elect, center, stands with his wife Margie Abbott, second left, and their daughters Frances Abbott, left, Louise Abbott, second right, and Bridget Abbott after delivering his victory speech at the Liberal-National coalition's election function in Sydney on Sept. 7, 2013.

For two weeks after Australia’s 2010 election failed to produce a winner, Julia Gillard and Tony Abbott raced to form a minority government. While Abbott lost that sprint, he triumphed in the marathon since.

After three years of attacks on the carbon-pricing deal Gillard struck with the Greens to help win office, Abbott’s Liberal-National coalition was on course for the biggest parliamentary majority since at least 2004 in the Sept. 7 election. His victory was cemented by keeping his team united and focusing voters on the Labor government’s disarray, which saw it return Kevin Rudd to the leadership 10 weeks ago.

“Abbott falling short of forming the government three years ago has proven to be a blessing in disguise for him,” said Stephen Stockwell, a political analyst at Griffith University in Brisbane. “He’s reaping the benefits now with a clear and strong majority in the lower house and none of the questions of legitimacy that plagued the previous government.”

Abbott’s task now is to switch from the negative attacks that saw Labor dub him “Dr. No,” to governing at a time economic growth is forecast to slow and unemployment climb to an 11-year high, denting tax receipts. In his victory speech, he pledged to scrap Gillard’s carbon price in his first term, put the federal budget on track to surplus, increase investment in roads and stop asylum seekers arriving by boat.

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A volunteer for the Labor Party removes campaign posters featuring Australia's Prime Minister Kevin Rudd outside a polling station in Brisbane on Sept. 7, 2013. Close

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A volunteer for the Labor Party removes campaign posters featuring Australia's Prime Minister Kevin Rudd outside a polling station in Brisbane on Sept. 7, 2013.

‘New Management’

“I declare that Australia is under new management and that Australia is once more open for business,” Abbott, 55, told cheering supporters at the Four Seasons Hotel in Sydney, moments after Rudd conceded defeat. “The time for campaigning has passed, the time for governing has arrived.”

Increased support for the coalition in the traditional Labor heartlands of Western Sydney, Victoria and Tasmania helped deliver Abbott an additional 14 seats, while he maintained the conservatives’ grip on the mining states of Queensland and Western Australia. The coalition led in 86 of the 150 seats in parliament’s lower house, where government is formed, compared with Labor’s 57, with counting continuing, the Australian Electoral Commission said on its website.

Abbott and Rudd, also 55, embraced similar policies on education, disability care and immigration through the campaign, leaving economic management as the defining difference. As well as promising to abolish Labor’s carbon and mining levies, the coalition said it would lower the business-tax rate; fund a A$5.5 billion ($5 billion) per year maternity-leave program; reduce the civil service by 12,000 positions; lower subsidies for automakers; and cancel handouts to parents of school children.

‘Disunity Is Death’

By adopting a small-target strategy eschewing major policy platforms, Abbott kept scrutiny on Labor’s infighting -- an issue senior party figures acknowledged cost it the election.

“Disunity is death in politics, unity is strength,” former Queensland state premier Peter Beattie, who failed to win the district of Forde, told the Australian Broadcasting Corp. “What Tony Abbott did is put up a unified team.”

Labor has been hobbled by internal feuding since Gillard ousted Rudd in a party coup in June 2010, days after vowing she wouldn’t challenge him. Three months later, she led the party to the polls and formed the nation’s first minority government since World War II by winning support from independents and breaking a pre-election pledge not to introduce a carbon tax to win backing from the Greens.

Those steps allowed the opposition to portray Gillard as untrustworthy, undermining her support in the electorate and eventually within her own party. Rudd, who remained in the media spotlight, reclaimed the Labor leadership on June 26.

‘Disunity’ Factor

“The disunity of the past four years was the dominant factor in the minds of people who had previously voted Labor and didn’t vote Labor at the weekend,” former treasurer Wayne Swan, who was re-elected in the Queensland seat of Lilley, said in an Australian Broadcasting Corp. interview today. “That gives us the task of rebuilding.”

Rudd’s early lead as preferred prime minister over Abbott encouraged a presidential-style campaign from Labor. The Mandarin-speaking former diplomat focused on his handling of the economy through the 2008-2009 financial crisis, when Australia was alone among major developed economies in avoiding recession.

His central charge against the coalition was that its planned spending cuts could cause the economy to contract. That attack was undermined in the closing days of the campaign. After Rudd and his two top economic officials held a press conference on Aug. 29 claiming a A$10 billion shortfall in the coalition’s funding plans and citing Treasury data, officials from the department issued a statement downplaying their involvement.

‘Low Point’

That was “the low point of the campaign,” former Labor prime minister Bob Hawke, 83, told Sky News.

Abbott’s campaign wasn’t without stumbles. On Aug. 13, he said a female coalition candidate for a seat in Western Sydney had “sex appeal,” reviving criticism of Abbott’s attitude toward women after Gillard last year labeled him a misogynist. In an Aug. 21 debate with Rudd, a frustrated Abbott asked “Does this guy ever shut up?,” sparking Labor claims he was arrogant and aggressive.

Abbott still managed to improve his standing in opinion polls, overtaking Rudd as preferred prime minister for the first time in the final week of the campaign, 43 percent to 41 percent, according to a Newspoll survey published Sept. 2.

On Message

“Abbott did not lose his cool: he kept to the same strategy, kept to the same major messages,” Liberal Senator Arthur Sinodinos told the ABC. He didn’t sell out his principles in 2010 when Gillard formed minority government “and that stood him in good stead for this election,” Sinodinos said.

Abbott’s political career began in earnest in 1990, when then-shadow minister John Howard told leader John Hewson that he knew of a potential press secretary. When Hewson’s “Fightback” platform of tax reform backfired, costing him the so-called unloseable 1993 election against Paul Keating, Abbott saw first hand how a policy-heavy election pitch can fail.

In a 19-year parliamentary career that started in 1994, he was promoted to Cabinet in Howard’s coalition government in 2001. After Howard was defeated by Rudd in 2007, the coalition churned through two leaders before Abbott won an internal ballot on Dec. 1, 2009, by a single vote.

He has sought this year to shake off the negative persona he attained in opposition, and to moderate his conservative image by pledging a paid maternity-leave program and saying that he would consider allowing his lawmakers a free-vote on making gay marriage legal.

‘Central Position’

“He does seem to have modified, to have come back to a more central position,” Hawke, who previously described Abbott as “mad as a cut snake politically,” told Sky News.

Abbott takes office at a time of transition for Australia’s economy. The Treasury and central bank forecast growth will slow and unemployment rise as a mining-investment boom wanes. The coalition has pledged a budget surplus equal to 1 percent of gross domestic product within a decade.

The Reserve Bank of Australia has reduced interest rates by 2.25 percentage points since late 2011 in a bid to revive employment-intensive industries including construction.

He has pledged his first act as prime minister will be to begin the process of repealing Gillard’s carbon tax. Abbott’s success in doing so will depend on the make-up of the upper house Senate, where early counting indicates minority parties and independents will hold the balance of power, rather than Labor and the Greens.

Such negotiations will require the determination that Hewson said Abbott has displayed in opposition.

“Abbott has stayed focused, disciplined, on message for the whole of the campaign, and indeed for the past four years,” Hewson, who led the Liberal party from 1990 to 1994, said in a phone interview. “One personal characteristic that people do underestimate is just his discipline and I think that will carry into government.”

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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