Consumer confidence has certainly taken a dive, not the least helped along by the uncertainty and unpopularity of the effects of a carbon tax. Westpac joined the observation over the weekend that the next likely direction of interest rates is down. Last week when I wrote about interest rates, the 3 year government bond rate was 4.60% against a RBA cash rate of 4.75%. This morning the 3 year rate fell to 4.27%. Don't miss the message here, consumer sentiment is depressed, and the political acrimony is not helping.
Michael West in The Age put it best this morning: "The rub for Julia Gillard is that only one quarter of the country backs her. That's not enough to push through such a landmark reform. The public mandate is too skinny, the risk of parliamentary defections too fat. Only one member has to cross the floor. And bear in mind, Liberals crossed the floor to support the CPRS when Kevin Rudd was in power. It happens."
Looking back in history might help us to find a solution.
The Gair Affair. Vince Gair was elected the Premier of Queensland in 1952 by the Labor Caucus when the then Premier, Ted Hanlon died. Even though Gair won the 1956 election he managed to get the union movement offside after circumventing union support for a shearers' strike by arranging the Federal Government to support the export of wool shorn by non-union labor. Although the strike eventually ended, an anti-Gair alliance was formed by the militants of the Queensland Trades and Labor Council.
One of the main issues that caused conflict was the Labor Party's support for 3 weeks paid annual leave to be included in State Industrial Awards. The Party's Central Executive directed the Parliamentary party to introduce legislation for the leave. Although a bit heavy handed, Gair "promised" to introduce the legislation after the 1956 election. Gair was re-elected but then said circumstances had changed, saying it was financially irresponsible to extend the leave.
The Central Executive of the party, not happy with a broken promise, removed Gair as the leader of the party on the 24th April 1957. Unlike Kevin Rudd's removal as party leader, Gair was able to convince 25 Labor ministers to resign with him from Caucus and form the Queensland Labor Party. Gair tried unsuccessfully to form a minority government with the Country Party. The ALP, Country Party and the Liberal Party blocked supply (it can happen) forcing a new election in August 1957. The Liberal Party won, ending 25 years of Labor Government.
Gair held his seat, with the Queensland Labor Party merging with the Democratic Labor Party. In 1964 he was elected as a Federal DLP senator in the Senate. This brings us to the 1974 Whitlam Labor Government. Whitlam was trying to create a vacancy in the Senate to give Labor a better chance of picking up an extra seat. Whitlam offered Gair to become Ambassador to Ireland if he resigned. Gair, who was a leader dumped by the Labor party and was disillusioned with the DLP, happily took the opportunity offered.
The Queensland Premier Joh Bjelke-Petersen tried to thwart the plan by issuing 5 rather than 6 writs for Senate Vacancies. Whilst this was going on, two Country Party senators kept Gair occupied in his office with beer and prawns until 6:05 in the evening. Gair missed the 6pm cut-off time to resign and Whitlam's plan was thwarted. The event became to be known as "the night of the long prawn".
After the May 1974 Senate election the ALP failed to have a majority in the Senate, precipitating the eventual sacking of the Whitlam Government and the double dissolution in 1975.
So there are some similarities to today, a former Labor leader sacked by his own party, a minister who likes to go overseas, a Labor party that is without control in its own right in the Senate (or the House of Representatives), a party at a low point in the opinion polls, a general mistrust and disenchantment with policies, never has a political environment felt more like 1975.
The current Government needs to re-stablish its mandate with the people, given the opinion polls (Rudd was sacked with better polls), the broken "carbon tax"promise, and a softening economy focusing voters minds on the economic decisions being made.
Abbott could try a Whitlam tactic and find a former Labor leader sacked by his own party, who likes to live overseas, and who wouldn't get a plum overseas posting if Labor lost the next election. Just try it without the prawns.