Julia Gillard and Tony Abbott had different emphases in their reactions to Ford’s announcement that it will shut down its Australian production – which started way back in the 1920s.

Gillard and Craig Emerson (filling in for Industry Minister Greg Combet, who was sick) focused on the high Australian dollar which is making life difficult for Australian manufacturing, as well as on Ford’s inability to reach economies of scale by linking into global or regional supply chains.

Abbott, invited at a news conference to target the carbon tax specifically, was careful not to fall into that trap – which in earlier times he probably would have.

While the carbon tax had contributed $400 to the cost of manufacturing a car, he said, which was something an industry under pressure didn’t need, “a whole range of factors” were involved, he said.

Abbott has learnt from that time last year when he foolishly ran out and blamed the carbon tax (and the mining tax) in BHP’s pause in its Olympic Dam project – when the company wasn’t doing so.

The opposition has been quick to give in-principle support to the structural adjustment funding which has been announced by the federal and Victorian governments in the wake of Ford’s decision.

It knows that being too partisan at a time like this could just backfire badly – like scoring points when there has been a tragedy. The blame game might get more willing later on.

Ford’s situation seems to reflect in part some misjudgements of its own – there is not enough demand for the large cars it is producing.

While its 2016 manufacturing closedown will be seen as a pointer to the longer term unviability of the car industry in Australia, for the moment Holden and Toyota are making reassuring noises.

Ford has given as reasons for its decision ‘'increasingly challenging market conditions – including market fragmentation and the high cost of manufacturing’‘.

CEO of Ford Australia Bob Graziano, asked about the carbon tax, said “there are a number of costs and it’s not just that cost”.

The overall cost of production in Australia was double that in Europe and four times that in Asia, he said.

In political terms, the Ford announcement will feed into the general argument by the opposition and business that Australian costs are too high. It will also add to the public’s feeling of uncertainty about Labor’s economic management, which makes it harder for the government to get over its message that the Australian economy is in good shape.

While the Ford decision inevitably raises fresh questions about the big amounts governments of both complexions have poured into propping up the car industry, neither side is going to give up on it – which would have big implications for the components industry – although a Coalition government would put in somewhat less.

The automobile industry remains iconic – though not iconic enough for most Australians to buy its locally-produced cars.

Kevin Rudd doesn’t do anything by halves so his announcement that he now believes in gay marriage was a big production.

There was a long and reasoned essay on his blog, followed by a news conference, called on another matter but dominated by same sex marriage, which was then soon put up on YouTube.

And, in nicely matched timing, an article by daughter Jessica in the latest issue of Cleo argued the case. She had tweeted on Monday (before dad posted his piece) that she had got “a little bit shouty” about marriage equality. After her father’s article, she joined battle on Twitter with the Australian Christian Lobby.

There is no reason to doubt the sincerity of Rudd’s change of mind on the issue. Some might wonder why it took him so long.

Inevitably, however, the cynics question the timing.

In the blog, anticipating that “my opponents both within and beyond the Labor party” would read all sorts of political significance into when he had chosen to speak out, Rudd gave a couple of explanations.

First: “This issue has been a difficult personal journey, as I have read much, and talked now with many people, and of late for the first time in a long time I have had the time to do both”.

Second: “My core interest is to be clear-cut about the change in my position locally on this highly controversial issue before the next election, so that my constituents are fully aware of my position when they next visit the ballot box”.

In his news conference he dwelt on the imminence of the private member’s bill from Greens deputy leader Adam Bandt, which comes up in the House of Representatives for debate next week. Bandt is pushing for a June 6 vote.

Rudd’s stand highlights that Julia Gillard and Tony Abbott, both opposed to same sex marriage, increasingly look out-of-time.

Many on both sides of politics believe Gillard’s opposition has its roots in political considerations. Abbott’s stand is faith-driven but politics (reinforced by his gay sister) has forced him to promise that after the election the party room can determined whether there is a conscience vote (at present Liberals are bound to oppose a change in the law).

Despite Rudd’s conversion resurrecting the issue, there seems little enthusiasm in the main parties for a rerun before the election (which would see the two leaders sitting together).

In last year’s House of Representatives vote, change was overwhelmingly defeated. In another vote, the numbers would not be there – even if the Liberals had a free vote, which they wouldn’t.

For Labor MPs, who have a conscience vote, gay marriage is a divisive issue. Staring at the prospect of a sweeping electoral defeat on September 14, they don’t want a distraction. One Labor MP – who has been a keen Rudd supporter – said: ‘'Why are we talking about gay marriage again?’‘ adding that Rudd’s timing was appalling, making it harder for Gillard to get her message out.

Leader of the House Anthony Albanese raises doubt about whether the Bandt bill will come to a vote. Albanese (a strong supporter of same sex marriage) told The Conversation that given that, many people usually wanted to speak on conscience issues, “it’s possible there won’t be time”.

Albanese said that earlier the Greens had prioritised “other issues and opposed there being a vote unless there was a certainty of [a positive] outcome”. The Greens reject this, declaring their position was that they did not want a premature vote.

Labor MP Stephen Jones, who sponsored last year’s private member’s bill, says: “If I thought a vote was going to get up or advance the cause, I’d be happy to push it – but I don’t think it ticks either of those boxes”.

On the Liberal side, people who want a conscience vote aren’t keen to stir the issue now.

Western Australian Liberal senator Dean Smith is gay, against gay marriage, and pro a conscience vote. But he would not be pushing for a free vote before September 14; afterwards, the Liberals should have one, he says.

Rudd suggests that if the Liberals continue to hang out against a conscience vote a national referendum should be considered. This seems excessive. Public opinion has already led the way and the politicians will follow. Probably before too long. Just not now.

The reform of Australia’s school funding system has degenerated into an unseemly arm wrestle between federal leaders and premiers, and conflicting claims about whether money would go up or down over the next four years under Julia Gillard’s plan.

Without doubting there is room for dispute about numbers, parents have every cause to be disillusioned about the carryings on. They were inevitable when the government left trying to negotiate the deal so late. It should have been done last year when the electoral temperature was at least marginally less hot.

The conservative premiers of Victoria and Queensland, still to decide whether to sign up, are now pawns in the federal Gonski game.

Gillard is desperately trying to persuade them to get on board; the Coalition wants them to resist, to make it easier for it to dump what it inherits of the plan.

The Liberals yesterday savagely turned on one of their own, Barry O'Farrell, for signing. Federal Coalition education spokesman Christopher Pyne claimed O'Farrell had been “conned” and should pull out of the agreement.

The attack is quite insulting to the premier of the largest state, in essence saying that the NSW government did not know what it was doing.

Meanwhile the argy bargy continues with Victoria and Queensland (it is assumed the Labor states will sign, and that Western Australia won’t). Victorian education minister Martin Dixon said the figures on the negotiations were ‘'so changeable’‘ that it was hard to estimate the chance of an agreement. “I’d just give it 50-50 at this stage.” (The federal government says the figures haven’t changed’)

A spokesman for Queensland’s Campbell Newman said: “The premier still hopes to reach a deal on Gonski.” Newman would be writing to Gillard about her “ripping money out of universities and kindergartens” as well as the bureaucracy of the schools plan and its federal takeover of an area of state responsibility.

Both Victoria and Queensland claim they have not been told by Abbott to not sign. According to Newman’s spokesman Abbott said to the premier, “You’ve got to do what’s best for Queensland”. That doesn’t quite gel with O'Farrell’s account of the robust conversation he and Abbott had.

In making their decisions the premiers will take into account the numbers and the politics. They might want to help Abbott but they also have to think of their own constituencies.

They know there will be an Abbott government: if the Gillard deal is better than they would get under him, they have reason to lock it in with her and defy Abbott to scrap it. The worst that can happen is a few insults, like O'Farrell is getting.

But would they be better off? The plan runs for six years, with funding loaded at the back end – the current argument focuses on the four year budget estimate period.

The opposition claims the government is cutting $326 million over four years. Pyne says he bases this on calculating that “there are over $3.1 billion in cuts and redirections from the schools budget, being replaced with $2.8 billion in extra spending over the forward estimates”.

Pyne also accuses the government of shortchanging on indexation.

From this, he claims that extending the present system plus the rate of indexation the opposition proposes (around 6 per cent, with some year-to-year variation) would deliver a better deal over the forward estimates period.

The government describes Pyne’s claims as “a joke”. It points to last week’s budget figures which show modest rises in schools funding over each year of the forward estimates.

It says that Pyne is basing his claims on previous budget forecasts when school funding indexation was estimated to be 5.6% each year. But as a result of state cuts to schools, this rate went down to 3.9% in the October budget update and will be 3% in the coming years, the government says.

Gillard is distributing figures to show how much schools would lose if they don’t sign up to the six-year program. Pyne is attempting to muddy the water with figures claiming they will be worse off in the coming four years if the deal is accepted.

Treasurer Wayne Swan will enter the fray today, claiming in a speech to the think tank Per Capita that Abbott would cut to the bone (the government’s favourite phrase in relation to the opposition at the moment) on schools funding “with one and a half million dollars being ripped from each school on average.

“He will use his commission of cuts to rip away our investments in education, putting politics first and our kids last”.

Swan will say that “Labor believes that education is the great enabler that smashes down barriers and builds a country of opportunity'‘ while Abbott had confirmed ’‘he does not share this belief. The Liberals would put Australia at the back of the class”.

The claims and numbers will continue to fly but the next critical stage of political judgement will be the decision, to come before June 30, by the key Victorian and Queensland premiers, and the reasons they give for what they do.

Barry O'Farrell must be Tony Abbott’s least favourite Liberal just now.

O'Farrell has not just lived up to that old cliché “don’t stand between a premier and a bucket of money” by doing a deal with Julia Gillard for the Gonski schools funding but he is out there vehemently declaring the present system broken and arguing the need for change.

“I think any incoming government is doing to understand that the existing funding formula is broken. It’s unfair,” he said at the weekend.

That’s the opposite of the position of Abbott, who in his budget reply hardened his opposition to the Gonski model.

O'Farrell also played into Labor’s hands when he told Sky that all options in relation to the GST should be on the table – the base, the rate and the carve up between the states.

Abbott’s promise of a review of the tax system – with proposals for change put to the people at the election due in 2016 – inevitably opened the issue of the GST. But it is not helpful to have his own side contributing to a full-blooded debate about the GST in the run up to this election.

The opposition leader’s rejection of the Gonski funding, his plan to delay by two years the superannuation rise to 12%, and the GST spectre are giving Labor useful campaigning points. The PM and her ministers have jumped on them with gusto.

But, as the Liberals run advertisements on commercial TV to sell their positives, the impact of Labor attacks is diminished by what is now generally assumed to be the government’s terminal position.

Labor will be heartened by the post-budget Nielsen poll, which shows its two-party vote improving by 3 points since last month to 46%, and the Coalition falling by 3 points to 54%. Labor’s primary vote is up 3 points to 32%, while the Coalition is down 5 points to 44%. Gillard has risen as preferred PM, while Abbott has fallen – they are now level.

Despite its increase, Labor’s primary vote remains at a disastrous low.

In the battle over Gonski, the federal Liberals have been leaning on the conservative states not to sign. O'Farrell recounted how Abbott had gone to see him when the state cabinet was looking at the issue.

“He made clear his view that the system wasn’t broken, that the agreement shouldn’t be entered into”. But O'Farrell had told Abbott the NSW cabinet would decide whether the offer was in the state’s interests and whether it could be afforded.

While NSW defied Abbott’s wishes, the conservative states of Victoria and Queensland have been holding out against the government (as well as Western Australia, which was always a lost cause).

Gillard is happy to have a fight over Gonski, calling a news conference to tell voters to look up what they would lose under Abbott.

She said that if the present funding system introduced by the Howard government continued, federal school funding would go backwards by $16.2 billion over six years.

This was because of falling indexation and the opposition’s refusal to guarantee that the extra investment for schools in last week’s budget would be delivered.

If the national schools plan did not proceed, NSW government schools would lose an average of $1.7 million per school; non-government schools would on average lose $800,000.

For Victoria the figures are $1.9 million on average for a government school, and $1.7 million on average per non-government school. The Queensland figures are $2.4 million on average per government school and $2.5 million on average per non-government school.

Victoria and Queensland find themselves in awkward positions, caught between offers that look to benefit their states substantially and Abbott’s pressure to say no. If they refuse to sign on, their opponents will claim they have been just playing politics.

But while the schools issue is one Gillard should be able to turn to her advantage, she faces the danger of being marked down if she can’t clinch deals with the states. The fact she is seen as a lame duck PM means that such a failure would feed into the negative story about her; it also limits her ability to punch home her message.

The same goes for Labor’s scare campaign on the GST. It holds dangers for Abbott, but on the other hand voters may accept as quite reasonable his argument that the tax system needs looking at and that he would take proposed changes to the people before bringing them in.

A government that said before the 2010 election that it would not have a carbon tax and then introduced one is not in the best position to call into doubt the credibility of Abbott’s undertaking on tax.

Can you believe it? We’re now debating a second term Abbott government.

On one hand, cautious Tony is presenting himself as careful and unthreatening: bipartisan on disability, accepting the budget’s savings, embracing Labor’s carbon tax compensation (without the tax). Like John Howard running against Paul Keating in 1996, Abbott is trying to minimise the scope for a scare campaign.

On the other hand, brave or foolhardy Tony has also planted long-term time bombs that the scaremongers can exploit.

Two came out of Thursday’s budget reply – a white paper on tax and a white paper on the Council of Australian Governments and federal-state relations. When he released his workplace policy recently he promised a Productivity Commission inquiry into what changes might be needed to the Fair Work system.

Abbott stresses that proposed actions following these exercises would be taken to the following election, due in 2016.

That might be a long time away, but it is pretty big news that Abbott has flagged that three huge areas – the tax system, IR and federalism – are being opened up for major consideration.

Predictably, he has immediately faced questions about the GST and government claims that he’s opening the way to increase it.

There are two ways of looking at what he’s done. It can be seen as making gestures to the concerns of particular constituencies without actually having to address them immediately. Business wants IR and tax reform; the conservative states complain about COAG. OK – let’s have a talk.

From another vantage point, his actions can suggest a more ambitious agenda down the track. Is Abbott keeping his sheep’s clothing on for the moment but planning to let the wolf out later? More likely, the wolves are those within his own party and advisory circle, more ideological than he is, who want to set up a pathway to major reforms.

While the fruits of the reviews would be matters for the voters at another election, the processes would be high profile features of the first term. Debates about tax, federalism and industrial relations would rage simultaneously, as evidence was gathered, consultations undertaken and papers and reports released.

Some in his party and in the business community would seize on these great opportunities to try to push an Abbott government in the directions they wanted.

Take industrial relations. It is hard to think of the Productivity Commission producing other than robust recommendations for reforming the system. There would be many on Abbott’s backbench who’d be cheerleaders for change. Would he be able to control the debate in the way he has been able to in the run up to this election? Probably not.

As for tax, the main reason you would need another inquiry so soon after the Henry one would be to include what was excluded from Henry, most notably the GST.

Pressed about whether he was leaving open the potential for a increased GST in the second term, Abbott said “people are absolutely hyperventilating – we haven’t won a first term, let alone a second term”; but went on to add that “we will have a comprehensive debate about tax reform. Who knows what people mightr put up to us?”

Well anybody who knows anything about tax knows they will put up ideas about the GST. The debate about the need to raise or broaden it, or both, is quite strong even when both sides are ruling out doing anything at the moment.

As for federalism: Abbott has been all over the place on this at various times. Going back into his not-so-distant past, however, he is much more centralist than states' righter. But his party has plenty of federalists – some of them are currently trying to undermine the Coalition’s formal support for the referendum, to be held with the election, to write recognition of local government into the constitution.

It will be difficult enough for Abbott to manage the normal exigencies of federal-state relations without comprehensively revisiting how the system should work, given his own views and a divided party. He says the purpose would be to “ensure that, as far as possible, the states are sovereign in their own sphere”. It’s hard to think that Abbott really wants to do this, which implies more than getting rid of the waste and duplication he mentions.

At one level, Abbott’s proposal for detailed examinations of these big areas, involving consultations with plans for change going to an election, is a faultless public policy process.

But politically it gives his struggling opponents immediate ammunition, and it could make his first term rougher than he might expect and managing the run up to the 2016 election very tricky.

Tony Abbott has removed a big uncertainty for voters, and simplified the opposition’s task, with his promise to retain the carbon tax compensation even after he gets rid of the carbon price.

The Coalition’s previous line that it would scrap “unnecessary” compensation but give people some unspecified tax cuts and welfare was always messy.

The opposition had not produced any detail about amounts or mechanics of implementation. Now it has cleared away a potentially difficult issue, although doing a somersault is always embarrassing.

The A$4 billion cost is being covered by some $5 billion savings, a number of them recycled from earlier announcements.

A significant new saving would be a two year delay in increasing compulsory superannuation from 9% to 12%. This was originally a measure supposed to be financed out of the mining tax, which the opposition decided at the time it it was politically expedient to accept. The delay would mean 12% would not be reached until 2021-22.

Abbott said the money for the ramp up came largely from business, not from government, and “our economy needs encouragement as mining investment starts to wane and new sources of growth are needed.”

It’s unlikely that the Coalition will take significant political heat over the delay because of the long time lag in the super measure. The security given by the compensation promise is likely to more than offset the negative from stringing out the super increase.

More politically controversial could be another clear indication from Abbott that he wants to shake off inheriting the Gonski school funding program.

This is in limbo with NSW Liberal government signed up, but other states still tooing and froing, and a deadline of June 30. Victoria has been making some negative noises this week.

Earlier, the opposition did not seem to want a battle over Gonski to be at the heart of the election but Abbott is showing every sign of not caring. This is an interesting political judgement.

In more “me too” politics, the opposition has sensibly accepted the government’s range of budget cuts. Using the fig leaf of this being a “budget emergency” it will “reserve the right to implement all of Labor’s cuts.”

In fact, Abbott and his colleagues must be privately thanking Labor for bringing in some difficult measures – the Coalition can use the funds from them while blaming its opponents for doing such things.

With the opposition taking on board the budget cuts, the government last night tried to turn the heat onto the Coalition’s cuts. But Finance Minister Penny Wong didn’t sound all that convincing. She was forced to resort to raising a scare about the Coalition’s planned commission of audit.

Abbott’s budget reply, by clarifying the Coaltion’s position on the future of the compensation payments, answered one significant question about his policy in government. But he still has much to reveal – including what would be his path back to surplus – and it will be well into the formal election campaign before we get the full detail.

Tony Abbott faces two tests in his budget reply. One he can afford to ignore; the other he needs to meet.

The government calls for him to reveal the opposition’s fiscal program. But the Coalition has been pushing the timetable out until after the release of the final pre-election budget update, which follows the start of the formal campaign.

This gives Abbott a get-out for a long time – and makes it hard for the public to judge the opposition’s broad program until very late (even then, we won’t get the whole picture of what a Coalition government would do – its proposed audit commission would allow it to produce a much-revised post-election blueprint).

But Abbott has dual protection at the moment. He can argue that it is important to get the most up-to-date figures. Also, when he is sitting so comfortably in the polls, with people on both sides of politics regarding the election as a foregone conclusion, he has considerable latitude to do things on his terms.

The other test relates to the savings measures in Tuesday’s budget, which include clampdowns on middle class welfare, most notably the abolition of the baby bonus, and the closing of business tax loopholes.

It would be foolish for Abbott not to state the opposition’s attitudes to these as soon as possible.

In the budget’s immediate aftermath he and shadow treasurer Joe Hockey have been dodging, saying they won’t give knee-jerk reactions. Pressed on the baby bonus, Hockey in particular has looked awkward. “I will discuss my position with my colleagues”, he said.

That baby bonus! The pride of the Howard government, it was said to have had a role in a tick up of the birth rate.

But now it has become a symbol of the “entitlement” mentality that has to be tackled when money’s short.

For the opposition, however, it is difficult. When the government announced last year that the baby bonus would be lowered for second and subsequent children, there was division within Coalition ranks. Hockey was in favour of supporting the cut (which is not yet legislated) but families spokesman Kevin Andrews thought it should be opposed and won the day, with Abbott’s backing.

In today’s circumstances, the opposition would lose credibility if it did not “wave through” the abolition of the baby bonus (being replaced in the budget by more modest and tightly targeted help for the families of newborns) and other proposed savings.

The Coalition is arguing the budget is in bad shape – to then fight what are reasonable savings would look hypocritical and expedient.

It would also make a fool of Hockey, who only last week told the Institute of Public Affairs “some resetting of the national mindset on the role of government” was required. Referencing a tough speech he had made on the subject in London just over a year ago, he said “I believe all developed countries are now facing the end of the era of universal entitlement”.

There has been commentary about how the government is using “wedges” and “booby traps” against Abbott in this budget – wedges to exploit internal friction on the baby bonus and other measures; booby traps to lock a future Coalition government into certain expenditure.

Abbott is trying to retain flexibility on one alleged booby trap – the schools funding program, which still has to win support from most states. Pressed on whether he would honour the deal signed between Julia Gillard and NSW Liberal premier Barry O'Farrell, Abbott insists he doesn’t know the detail. (As if he could not ask.) He would like to avoid being saddled with this expensive program, even though education spokesman Christopher Pyne has previously said that if a new funding model was “overwhelmingly” (undefined) across the states “we won’t seek to unpick that”.

The Gonski battle is still being played out. The savings are the immediate issue. The signs are that Abbott will sidestep a fight. He’d be mad to do anything else. To resist them would just divert attention onto himself, lose much-needed money from his own own bottom line and invite unwelcome pressure to make unwise promises.

Also, a gesture of fiscal rectitude over the savings might be helpful when he is under some criticism internally about his too-generous paid parental leave scheme.

Brett Mason, opposition spokesman on universities and research, has one of the lowest profiles on the Coalition frontbench. Yet in terms of his own portfolio, he is among the most qualified in the shadow ministry.

The former academic rarely makes the news bulletins. In the response to the recent tertiary cuts, the opposition face was Christopher Pyne, the senior spokesman in the education area and a Coalition attack dog who is close to Tony Abbott.

With a MPhil from Britain’s Cambridge University and a PhD from Griffith University Mason, 51, lectured in criminology at Queensland University of Technology before winning a Senate seat at the 1998 election. His tertiary sector experience also includes a stint on ANU’s council in 2000-04, the university where he did his under-graduate study in arts and law (he’s qualified as a barrister).

“Crime and deviance was my specialty. I once said, I lectured in crime and deviance – the jump to politics was a short one.”

But why has hardly anyone in the general community heard of him?

“A stakeholder a few weeks ago described me as self-effacing”, Mason says. Then comes the booming laugh that frequently punctuates his conversation, followed by “I probably am”.

“I’ve never felt it necessary to push myself, in that sense.”

But he admits there’s a bit more to it. “In politics some people develop more slowly. I’ve been a later maturer all my life.”

He now enjoys politics much more than a decade ago. “It took me a lot longer than some to settle in, to come to terms with what politics was about, how to deal with the party, with colleagues. Particularly coming from academic life and working for the United Nations for a while [he was a human rights lawyer in 1992-93 with the United Nations Transitional Authority in Cambodia].

I hadn’t had a hurly burly life.“ He admits he’s still more comfortable writing an op ed than appearing on television.

But he’s not shy in the Senate, where in debates his projection is so loud – legacy of his academic lecturing days – that Senate clerk Rosemary Laing once told him it was hurting her ears.

Within the Liberal party Mason is on the right. One party colleague describes him as a “conviction politician”; there is general agreement that he has strong views and is prepared to stand up for them.

In the last days of Malcolm Turnbull’s leadership, Mason (who was shadow parliamentary secretary for education) was among the first of the frontbenchers to quit in the battle over the emissions trading scheme.

The issue cost Turnbull his leadership but according to one participant, Mason wanted to change the policy rather than the leader. Mason himself says: “I wasn’t anti-Malcolm. I was concerned the policy was electoral suicide. I didn’t have any gripe against Turnbull. He was very good at higher education.”

He’s aligned with a right wing group of senators that includes frontbenchers Mathias Cormann, Scott Ryan, Mitch Fifield and Michaelia Cash, as well as the controversial former frontbencher Cory Bernardi, whom Mason admires because “he doesn’t cut his opinions to fit the latest political cloth”, although “I’m not as conservative as Cory”.

Mason describes himself as “moderately conservative – I think my instincts are conservative”. On gay marriage, the test social issue of the moment, “I still remain uneasy”.

But in the party battle over the ETS, he saw himself as “mainstream… I always thought I was representing the party members' views, particularly here in Queensland.”

With Mason, appearances don’t quite tell the story. Fellow Queenslander Barnaby Joyce, the Nationals Senate leader, describes him as “great fun” and a “good mate of mine”, while Bernardi says going to Mason’s Brisbane warehouse apartment “in a funky part of town” is “walking into a hip pad. It’s Brett to a T. A trendy conservative.”

The flat is filled with books including a signed copy of Barry Goldwater’s The Conscience of a Conservative, and there is memorabilia of Richard Nixon, a special Mason interest, with a framed Time cover of the one-time president on a wall. (His Canberra office has a Nixon doll; touch him and the famous voice comes out).

Mason’s mild manner also can be deceptive. When on the receiving end of offence or his integrity is questioned, he can be volatile. A decade ago he threatened to punch Kevin Rudd’s lights out. He declines to go into detail other than to say it was over a matter of “moral relativism”. “I haven’t had any trouble [with Rudd] since,” he says, adding, “never take politeness, even diffidence, as a sign of weakness”.

In their early years in the Senate Mason and George Brandis, a moderate and now shadow attorney-general, formed a political duo, much like on the Labor side Wayne Swan and Stephen Smith operated in concert (and were dubbed the glimmer twins). Latterly Brandis and Mason fell out, in a massive clash over their respective positions on the 2010 Queensland Senate ticket. Mason felt he had been betrayed by Brandis.

Mason ended up in third position. After he scraped home on preferences from the Australian Sex Party, veteran National Ron Boswell told him to immediately do two things: ring his mother, and go to church and ask forgiveness. Mason is Catholic but not a regular church goer – but he did pay a visit to St Patrick’s in Fortitude Valley, Brisbane.

Although some see him as more academic than politician and less effective for that, respect for Mason stretches across the political spectrum. Chris Evans, recently retired from the Senate, who was tertiary education minister, says: “we worked constructively on a couple of issues. He’s a decent person, interested in public policy. The sector regards him as hardworking and interested”.

QUT vice-chancellor Peter Coaldrake recalls that when he chaired Universities Australia “we got significantly augmented indexation of university costs through via legislation. I know he worked with Evans on that. I suspect he assisted with the passage of TEQSA [Tertiary Education Quality Standards Agency, the university regulator]. We needed a national regulator – it sends a good signal internationally.”

“He was constructive,” Coaldrake says, adding that in policy on universities, “it’s good to have the partisan fault lines minimised rather than accentuated”.

Mason says that as shadow minister he has made very few promises to vice-chancellors (incidentally, in another twist, his ex-wife, Natalie MacDonald, is deputy vice-chancellor at La Trobe) except that a Coalition government would be consultative and consistent.

It’s clear the Coalition in office would not reverse Labor’s cuts, and Mason can’t promise that there would not be more.

Mason says that as minister his aim would be “to mainstream higher education in the economic debate”.

“Universities are not finishing schools for young ladies and gentlemen anymore. They are increasingly engines of economic growth through research leading to innovation and productivity”.

At the same time, “the universities still have a role in looking for a better society, advancing the virtues of civility, inquiry, curiosity”.

He sees as a priority the need to stem the decline of Australia’s education industry. “Promotion of Australian education abroad is still not quite hitting the mark. Competition is fierce from Britain, US and Canada. The high dollar doesn’t help. We have to do more to sell our wares.”

“The Australian public probably don’t appreciate what, in a national interest and economic sense, international education means to our country, our economy, our diplomacy.

“Australia is a super power in international education. It’s probably better at education than at sport, but how many Australians would know that?” He says there are suggestions that Australia’s diplomatic missions are not doing enough to sell education services.

The export industry had lost $2.5 billion since 2009. “There would have been a hue and cry if this had happened in any other industry”.

He warns that Australia “can’t go back to the mercantilist approach to higher education of the Howard and early Labor years”.

The decoupling of education and immigration and education which has happened since must remain, but there is more tweaking to be done.

“In the Howard years we became a little too commercial in higher education by too readily linking education and immigration.

“The Labor government sought to decouple them. I agree with that, but perhaps it went too far.

“The issue now is to better facilitate education by allowing students to stay on and work after they finish their degree, and to allow high quality private education providers to assess visa applicants, as public universities do today. There is a tension.”

On the touchy issue of the TEQSA, which registers and assesses the quality of higher education providers, he says that it only commenced in January last year and he would want to assess its performance before deciding on changes.

“TEQSA monitors quality and standards of undergraduate teaching and degrees. We believe it’s very important for Australian universities and their standings overseas, as well as the students that qualify, that quality and standards be maintained”. But “it may be being a little heavy-handed. It may have to be fine tuned in its approach to public universities.”

Pyne recently floated the idea that “there would be real benefits if government policy encouraged some universities to maximise their opportunities for research and for others to focus more on teaching”.

Mason isn’t an advocate for two streams. But “I am interested in driving diversity in the sector. If that meant there were more private providers with the status of university colleges providing top quality undergraduate education, that would be a very good thing”. He mentions Campion College in Sydney, billed as Australia’s only tertiary liberal arts college, as an example.

He believes MOOCs (Massive Open Online Courses) will enhance the educational experience but is confident they will never replace universities, or even be a cost cutting measure. “They’re great for imparting information but as yet not quite so good as face-to-face discussion in small groups. I still believe the best form of education is not so much the lecture but the small group.”

Spoken like a true academic.

When senior ministers decided to scrap the proposed 2015 tax cuts, the dark shadow of the L.A.W affair must have crossed their minds.

Paul Keating legislated tax cuts before the 1993 election, talking them up as L.A.W. But he scuppered the second round afterwards, because of budget difficulties. He then said he’d divert them into superannuation but didn’t last long enough to implement his grand plan, which was scuttled by the Howard government.

The Gillard government legislated the 2015 tax cuts as part of its carbon compensation package. It has already delivered the first round but now it has confirmed the second round is “deferred”.

It desperately needs the money. And, with the carbon price having crashed in Europe, people are not going to require the extra compensation.

Climate Change minister Greg Combet tried to make the best of the latest difficult iteration of the carbon debate, but he stretched credibility to breaking point.

Faced with the European price (around A$4-A$6), to which the Australian scheme will be linked from mid 2015, Treasury has revised its price estimate (previously $29 a tonne) for that year.

Getting these 2015 tax cuts out of the budget is a sensible fiscal decision. Even if the European price rises, there is no chance of it reaching anywhere near the original assumption on which compensation was based. The compensation package will be out of kilter from 2015.

So it’s prudent to make what changes are possible, both to get the package better balanced and to help address the budget woes. The government may be still aiming for a surplus at the back end of the forward estimates period.

It is planning other cuts to the carbon package, with Combet saying it wanted it “broadly budget neutral” but declining to give detail of these or the assumed 2015 carbon price.

The government feels that it can’t change the welfare increases due in 2015. Too hard politically. The $1.4 billion tax cuts are easier to stop. They are a fair way away; Combet said they amounted to only $1.59 a week for most taxpayers earning up to $80,000 a year.

But instead of admitting the tax cuts are gone, Combet claimed they are just being put off. “I say they are deferred because when the carbon price rises again in the future… those tax cuts will still be implemented at that point of time”, he said. “They’ll be deferred until such time as the carbon price exceeds $25.40, whenever that may be”.

The “deferral” description is spin. Even in the improbable circumstances that Labor survived and the European carbon price rose dramatically, the “deferred” tax cut would be overtaken by other imperatives.

The opposition gains every which way. It can attack the government over its reversal but gets the advantage for its bottom line. And its own pledge to give people a tax cut while at the same time abolishing the carbon tax becomes somewhat more manageable.

Julia Gillard recently seemed to assure a people’s forum in Melbourne that people would get all the compensation that had been promised, despite what was happening to the European price.

But when her words are carefully parsed there is a get-out-of-jail phrase. “You will see all of the household assistance that is being delivered staying, absolutely”, she said.

The tax decision is yet another broken promise. But who is counting now? Anyway, better to break a promise just before an election than just afterwards, as Keating did following what, at the time, was considered the “unwinnable election”, and Gillard herself did many years later.

The Reserve Bank giveth, the government taketh away. At least, that’s the latest pre-budget story.

Many families with mortgages of $300,000 will save around $560 a year from the Bank’s 25 basis points cut. But they will not get the July 1 boost in the family tax benefit that was promised, with much fanfare, just a year ago. For a family getting the maximum rate of FTB Part A, with two or more children, this was to be an extra $600 annually.

The Reserve surprised many economists with the rate cut – there had been speculation it would follow rather than precede Tuesday’s budget.

But the Bank noted that growth was “a bit below trend” recently, and the unemployment rate had moved up a little. It had previously said the low inflation outlook would give scope to ease rates “should that be necessary to support demand”; it had now decided “to use some of that scope… to encourage sustainable growth”.

The cut takes the cash rate to 2.75%, a record low. In past days, Treasurer Wayne Swan described 3% as a emergency level but totally rejects such talk today. There’s no comparison between the GFC times and the current economy, he says, which is fair enough. The trouble is, politicians' words return to haunt.

As Swan tweeted “Great to be back at the Department of Treasury – this will be my workplace for the next week as I prepare for Budget,” the government was confirming another revenue write down for this financial year – and, in its wake, another broken promise.

The total 2012-13 write down is now $17 billion. Last week, when talking about the $12 billion write down since October (up from the previous $7.5 billion), Julia Gillard said everything was on the table, including things formerly off the table, and very quickly the rise in the Medicare levy was announced, to help finance the national disability insurance scheme.

The now aborted increase in the family benefit was worth $1.8 billion. When it was unveiled in the last budget it was badged as “spreading the benefits of the boom”; it was part of a $3.6 billion package “to deliver much needed financial relief to families and businesses under pressure in our patchwork economy”. The TV stations are having a great time with the footage from a year ago; seeing the Gillard-Swan hype replayed will fuel voter cynicism.

The money had already had a chequered history – it was to come from the mining tax (which proved a nearly dry well) and had originally been intended to finance a company tax cut, which became politically impossible to get through parliament.

The story of the mining tax itself just gets worse. Estimates prepared by the Parliamentary Budget Office, using March data, suggest the tax will raise only $800 million this financial year compared with the projection of $2 billion in the October budget update.

Finance Minister Penny Wong dwelt on the fact that in the family tax benefits reverse people would not be losing out on what they are getting now.

Just what they had been told they could bank on. But as it heads to a multi-billion deficit the government’s fears about the bottom line have prevailed over worry about broken promises.

Labor is now being held to account for last year’s budget – the undertakings that it hasn’t been able to meet, including a surplus and now the family tax benefit rise, and the flawed estimates of revenue.

Almost certainly it won’t be in power when Tuesday’s budget is looked at retrospectively. But in the immediate term, commentators and the public will judge it with more sceptical eyes because of what’s happened with its predecessor. That much of the “spreading the benefits of the boom” largesse failed to materialise may colour judgements about Tuesday’s positives. And the flaws in the previous revenue estimates have cast a cloud over Treasury’s numbers, although those problems might lead it to be super cautious this time.

Meanwhile the opposition is conspicuously pushing out its own time frame.

Shadow treasurer Joe Hockey told the Master Builders Association: “I can promise that the Coalition will deliver a better budget bottom line than Labor. However, we cannot map out a strategy to return the budget to a sustainable position until we see the real numbers in the Pre-Election Economic and Fiscal Outlook. It is only the PEFO figures which are largely free of politicas in that they are signed off by the secretaries of Treasury and Finance rather than the Treasurer”.

Leaving aside the point scoring, it makes sense, as the story of the disappearing revenues suggests, to keep your options open as long as possible in these volatile times. But how politically convenient too. It means that on some critical issues, the opposition will not show its hand, or open itself to full scrutiny, until the formal campaign is well underway.

The fracas over Tony Abbott’s “signature” paid parental policy has given a glimpse behind the curtain of discipline that the opposition leader usually keeps firmly in place and, much more importantly, a hint of the pressures and problems he could face in government.

NSW Liberal backbencher Alex Hawke did not just say what he thought in a random moment of frankness. He launched a major written critique on Abbott’s pet policy, offering it to the Institute of Public Affairs Review. He then followed up with radio and TV interviews. He was on a mission.

The Abbott PPL policy is an “albatross around the neck of the party”, he declared; it wasn’t a “signature policy of the Coalition”; it had “crept into our policy”; it was ill suited to an economically Liberal agenda; it should be scrapped before the election.

You wouldn’t want any money on Hawke’s advancement in an Abbott government. It’s not that his view isn’t shared by quite a lot of Liberals. Indeed, it is. And that’s what makes it more difficult for Abbott.

A couple of colleagues, including moderate Mal Washer, also voiced criticism of the PPL plan, but many others, including at senior levels, are holding their tongues, perhaps their breaths. Discipline is so tight that such a deliberate and determined breach is startling.

Especially as the assault is on something that for Abbott has moved beyond policy to political theology. The man who once objected to government-funded parental leave is offering a vastly more generous scheme than the one Labor has implemented.

Abbott insists this is a productivity measure. “This is not just a family policy or a social policy. It’s not just something for women. This is something for everyone”. he said in reply to Hawke.

But in tough times, with the opposition saying more cuts are needed, to be offering six months leave on full pay, up to a maximum of $75,000 (that is, for women earning up to $150,000 a year) is fiscally extravagant and inequitable to boot. That is certainly the view of the Liberal economic “dries”.

Abbott says the scheme is fully funded with a levy on 3000 plus big companies. This means he finds himself now arguing for this new tax on business as well as a higher Medicare levy on individuals, after agreeing to the latter to help fund the national disability insurance scheme.

Shadow treasurer Joe Hockey preached against the age of entitlement but has to defend a mega parental entitlement.

While the promise will stand, the incident shows a party with conflicting attitudes on a core policy. The Coalition party room doesn’t take votes, but if there had been a genuine ballot on the PPL scheme, it would might well have gone down.

After he announced the scheme in 2010 without going to the party room or shadow cabinet, Abbott apologised to his colleagues and said: “Sometimes it’s better to ask forgiveness than permission.”

No doubt the opposition enforcers will reimpose discipline. A looming election that you are on course to win is a very good whip.

But the “absolution” style of decision making hasn’t been lost on those who are thinking ahead to an Abbott government and what it should achieve.

John Howard on occasion found himself under pressure from the left of his party, notably over asylum seeker issues. But the precedent that Abbott should be concerned about goes back further, to Malcolm Fraser’s time.

There is a substantial and determined group of economic “dries” in the ranks of Abbott’s junior frontbenchers and the backbench. They regard Abbott as full of rising damp (and this view will almost certainly be further reinforced when the cautious industrial relations policy is released).

The Society of Modest Members, titled after the nom de plume of the late Bert Kelly, a Liberal MP who fought against tariffs, has been revived.

The Liberal “dries” don’t want an Abbott government to be like the Fraser government, which they believe was too soft on economic issues and didn’t do enough.

In his IPA article Hawke wrote: “The Fraser government, elected on a mandate to fix it and reduce the size and scope of government, instead oversaw a bigger increase, paving the way for the election of a long-term Labor government that was prepared to tackle an economic reform agenda.

“A future Coalition government would do well to heed the lessons of the Fraser government’s failure and ensure that, from day one, rigorous economic policy is at the core of their agenda."


As the Fraser years went on, pressure from the “dries” of those days – Jim Carlton, John Hyde, Peter Shack and increasingly John Howard – built on the prime minister. One gesture to the weight of the dries was that Howard because deputy leader of the Liberal party.

(Interestingly a hero of some Liberal dries today is a Labor man, Peter Walsh. Walsh was a senior minister and a tough economic rationalist.)

After he has so strongly promised the PPL scheme, the dries won’t be able to stop Abbott making every effort to implement it, though it could take a while in government. But the dries are determined to try to corral his naturally “damp” instincts where possible.

Hawke might be seen the sniper who has dared, rashly or bravely, to fire the warning shot. Abbott and those around him, who also know their history, should be having a big think about the army behind him.

The evidence of gross cruelty in Egyptian slaughterhouses that has just come to light underlines that while some progress may have been made, the problems in the Australian live export trade are far from solved.

They probably will never be and I personally believe the trade should cease. But neither side of politics will ever embrace that. All up, it is worth about $1 billion annually.

Obviously, it is regarded as core business by the Coalition. Labor, after it received a battering over its temporary ban on the trade to Indonesia – when Four Corners in 2011 aired shocking footage of cruelty to Australian cattle slaughtered in that country – would not contemplate scrapping the trade.

So it has to be a matter of second best options. Agriculture Minister Joe Ludwig insists the provisions that he and the industry have put in mean that there is these days a quick reaction to and action on complaints.

He says he takes very seriously the evidence from Egypt, accepting that the cattle were almost certainly Australian.

No Australian beasts have been sent there recently, after Egypt objected to the use of growth hormones, but several thousand are still in the country from earlier exports.

Egypt has form. The Coalition government suspended the trade there in 2006 because of cruelty. This time the industry has announced a voluntary suspension, with the CEO of the Australian Livestock Exporters' Council Alison Penfold describing herself as “distraught” after seeing the vision. Since February 2010, more than 100,000 cattle have been exported to Egypt.

Ludwig says he is willing to put in more regulation for the Egyptian market if that is necessary.

“We’ll work with the Egyptian authorities”, he says. Already the Australian ambassador to Egypt has been put on the case, and the Egyptian ambassador in Canberra has been contacted.

One disturbing aspect of the live export trade is that those who discover breaches don’t seem to be Australian officials or the Australian industry but animal welfare activists, notably Animals Australia.

“There isn’t a regulator standing there at the slaughter every day”, Ludwig says. “These things do happen. It’s like going through red lights. The police aren’t there every time.” And he points to some recent examples of cruelty in Australia that the authorities hadn’t picked up.

But it is hard to avoid the conclusion that more should be done. One apparently worthy proposal is for an independent Office of Animal Welfare. This was endorsed by the ALP national conference in 2011, and developed by the caucus working party that had been set up in the wake of the Indonesian atrocities.

Federal MP Melissa Parke, one of the caucus activists on the live export issue, outlined to parliament in February how such an office would work. (Parke and Kelvin Thomson, another leading voice on animal welfare, have been muzzled by their appointments this year as parliamentary secretaries).

The office would “take the lead role in managing the development of national animal welfare policy”, she said. This would include standards and guidelines, and facilitating co-ordination between the states, which have responsibility for animal welfare legislation.

“It would oversee the live export system since this is a specific responsibility of the Commonwealth,” Parke said.

Ludwig supported the resolution at the ALP conference and is considering the caucus group’s report. His office says raises a number of significant policy and legal questions.

One would think they could be dealt with – if there was the will to do so.

As Parke said back in February, such a reform would be welcomed by the Australian community. Anyone who doubts that should remember the public outrage at the original Four Corners footage.

After trying unsuccessfully this week to put distance between itself and Tony Abbott on the national disability insurance scheme, the government is now trying to minimise the gap on defence policy.

With the release of the 2013 White Paper, Minister Stephen Smith declared: “The Opposition Leader has said that his position is no further cuts to defence spending, and he has an aspiration for 2% [of GDP spent on defence].

“When you open the forward estimates [in the budget] you will see no further cuts to defence spending, and an aspiration for 2% – it’s called an outbreak of bipartisanship on defence spending.”

Labor doesn’t want an election battle about defence. Polling over the years has consistently shown this is strong Coalition territory. The government seeks a truce.

Having cut deeply last year, the government has sought to protect its back with a “modest” increase in the budget numbers, although we won’t know the precise amount until Tuesday week.

The opposition would like to get more political mileage from defence but it hasn’t the money to do much, so it is just making a bit of noise. “When you talk about the road back to 2% cent, you’ve got to have a plan. We’ve got a plan. They have not”, opposition spokesman David Johnston said. The opposition is aspiring to a 3% annual real growth rate (without tying itself to a date); the government had that in a draft of the White Paper but it did not survive into the final version.

The White Paper is predictable, diplomatic about China (a change from its 2009 predecessor), and regionally focused. Here’s the nation taking a deep breath as the troops leave Afghanistan, and refocusing its eyes on its own backyard.

But the government is still committed to big acquisitions, reaffirming the promise of a dozen submarines, to be built locally. South Australia is delighted. It has narrowed the options for these – no “off the shelf” overseas model, but rather an “evolved Collins Class” or a new design.

It is now also pledging to buy new 12 Growler aircraft to bridge the gap before the Joint Strike Fighter arrives (this was delayed earlier), rather than convert existing planes.

Mark Thomson, senior analyst with the Australian Strategic Policy Institute, describes the paper as a “solid outcome” but adds, “the big question is the long term affordability”. It aspires to the 2% target but “we don’t know what dollar amount that would be, when it would be achieved, and what other pressures there will be” that could affect its realisation.

Thomson points out that Britain had spent a lot on equipment but “it’s now run out of money and can’t operate it. It’s had to ditch and mothball things and downsize its troop numbers”. He believes there should be an intergenerational report to examine how Australia’s finances might look down the track.

After giving Australia a bollocking over the language in the 2009 paper China has no reason to complain this time. Now that Kevin Rudd, with his suspicions of China, is not in charge, the sentences are softer. PM Gillard pointed to “continuity in our perceptions about China” but the change of nuance is obvious and sensible. The lecturing tone has gone.

The “Indo-Pacific” is a big organising concept in the paper. “A new strategic arc is beginning to emerge, connecting the Indian and Pacific Oceans through Southeast Asia”, This is “predominantly a maritime environment with Southeast Asia at its geographic centre. The region’s big strategic challenges will last for decades and their mismanagement could have significant consequences”.

After its operations in Timor-Leste, the Solomon Islands and Afghanistan will come a period of transition for the Australian Defence Force. The paper warns against any repeat of the post Vietnam loss of expertise.

One opportunity provided by the overseas drawdowns will be to “enhance our presence in the north and north-west of Australia”. The paper notes that last year’s Defence Posture Review had found the rapid growth and scale of resource development there was relevant to force posture, though potential threats to resource and energy interests shouldn’t be overstated.

With the small spending increase, and given the changing times and Australia’s recent deeper military engagement with the US, the government will have likely done enough to neutralise the defence issue. Abbott was politically aggressive for a while after last year’s cuts. But he knows that this is not a front-of-mind issue for Australian voters at the moment; there are lots of other things on which they would prefer money to be spent.

As for the Defence establishment, it might have bipartisanship but if Abbott wins on September 14 the bureaucrats will be knuckling down to produce yet another White Paper in 18 months.

The proposed national disability insurance scheme, a rare policy on which Julia Gillard and Tony Abbott agree, has become the object of shameless and unfortunate politicking by both.

When she announced yesterday a 0.5 percentage point boost in the Medicare levy from July 2014 to part pay for the NDIS, Gillard said legislation for the impost would wait for next term. She would take the matter to the people in September.

Why would she delay? It wasn’t hard to see. Out to wedge Abbott, and get some political cover for her tax rise, she would like to make the NDIS a frontline election issue, despite its bipartisan support.

Abbott, smelling the danger, called for the legislation to be brought to Parliament at once. But he wouldn’t commit to supporting it without seeing how the government planned to find the rest of the money for the scheme.

It was Gillard’s turn to be on the spot. All right, she would introduce the legislation immediately if Abbott pledged the Coalition would vote for it.

With the play back with him, Abbott needed a breather (and a chance to consult senior colleagues). Complaining it had been another chaotic day, he promised “we’ll have more to say about this tomorrow.”

But he wanted “everyone to know that the Coalition wholeheartedly supports the National Disability Insurance Scheme. We want it to happen, we want it to happen in this term of parliament”.

The scheme itself is not in fact going to happen, in any comprehensive way, for a long time. Abbott is really saying that he’d like some political ownership of the popular plan for the election. This has always been his aim – hence his unsuccessful call for a parliamentary committee on it jointly chaired by government and Opposition.

Both leaders are now under pressure over the levy: Gillard, to introduce the legislation in this parliament regardless of the Opposition, because she could very likely get it through with crossbench support, and Abbott, to support the tax hike to avoid doubt about his commitment to the scheme.

Abbott seems to have little choice but to back the levy – perhaps with a call for a sunset clause – which would also help the Opposition’s bottom line. But in doing so, the Coalition would be condoning a tax rise, forfeiting the opportunity run hard against another “big new tax”. Shadow treasurer Joe Hockey was heading down that path early yesterday when he said the levy would “hit every household budget”.

In an exquisite coincidence of timing, the Opposition leader is on his Pollie Pedal, which raisers money for carers, many of whom look after the disabled. He is getting plenty of opportunity for first hand stories along the way. There is strong backing in the disability sector for funding security provided by a levy, and a deep desire for the politics to be taken out of the NDIS.

And then there’s the Campbell Newman factor. Newman first suggested the levy to Gillard – who spurned the idea – and he continues to back it. “I did support a levy last year and I am going to support the prime minister on this today,” he said.

A Newman-Gillard unity ticket. It was a crazy day, as well as a chaotic one.

Footnote: As the pre-budget debate rages about the revenue black hole, MUP announces today that Jim Chalmers, Treasurer Wayne Swan’s former chief of staff, has coming out on July 1, “Glory Daze: how a world-beating nation got so down on itself”, about politics, economics and national identity during the GFC and beyond. The book asks “how a nation with the developed world’s best economy has a dimmer view of its performance than some of the basket case economies of southern Europe have of their own”. Chalmers now heads the ALP’s think tank, the Chifley Research Centre. MUP also has books on the way from former ministers Chris Bowen and Kim Carr.

The levy being planned by the government to part pay for the national disability insurance scheme is not in itself a bad option.

It wasn’t the preferred choice of the Productivity Commission, which thought it less efficient than funding out of consolidated revenue.

But if the community wants desirable and costly plans – and this is both – they must be financed by spending cuts or higher taxes, and the government needs some of each in its difficult budget circumstances.

There is, however, a political problem with this particular levy (which would take the form of an addition to the Medicare one).

Gillard has previously flatly ruled it out.

The idea came up at a Lodge dinner she had with premiers last July. Federal Labor’s bete noire, Queensland premier Campbell Newman, floated it, but Gillard was adamant.

“We will make the appropriate [funding] arrangements out of the Commonwealth’s budget without a new income tax”, she said publicly.

Newman tweeted at the time, “PM did fail to seize unique opportunity to fully fund NDIS on Tuesday night with support of ALL premiers. I am still asking why!!??”.

In view of what is now being canvassed, why indeed? Presumably one reason was because the government still believed it could get back to surplus, difficult as that was already starting to seem.

Perhaps Gillard should have been more circumspect in December, when she said, “I have in the past ruled out a levy and I will do it again now”. Later that month the surplus commitment was dumped.

That was then. Yesterday Finance Minister Penny Wong said the government was considering “a number of funding options” and “obviously a levy is something stakeholders have been calling for and have been calling for in the last 24 hours”.

Even if a levy won public support – the NDIS is very popular – the backflip would feed into the Opposition’s storyline that Gillard’s word can’t be trusted. A “broken promise” on another tax would be an unfortunate bookend to the broken promise on the carbon tax.

The levy debate, however, is also raising doubts about how a Coalition government would handle the hugely expensive NDIS, to which it has also committed.

Tony Abbott has always been a stronger supporter than shadow treasurer Joe Hockey, who has worried about the cost. Asked yesterday whether the scheme was still affordable, Hockey said, “Well, it depends on what the state of the budget is”.

Abbott said: “we will fund the national disability insurance scheme over the long run by building a strong economy.” Asked whether the Coalition was still completely committed to delivering the NDIS in the same time frame that the government had put forward, he parried the question. The Opposition appears to be leaving itself wriggle room on timing.

Abbott will have the choice of accepting a levy to help the Opposition’s bottom line or opposing it and saying he’d make room for the NDIS by savings, or if necessary would string out its implementation.

On the ABC last night former treasurer Peter Costello, with the luxury of not being a politician seeking votes, gave both sides a lecture. The proposed big spending on Gonski and the NDIS should not be undertaken in the present budgetary situation, he said, and also made it clear that neither should Abbott be pursuing his very generous paid parental leave scheme or the Coalition’s costly direct action climate plan.

“The easiest cut you will make is the stuff you never go into,” Costello observed.

Treasurer Wayne Swan today will continue to hammer home the pre-budget message that the government is on the fiscal warpath.

He will tell a CEDA function: “In this budget, we’ll announce further measures to build on the very substantial structural savings we’ve already put in place to address long-term fiscal pressures by permanently improving the bottom line”.

He will say the government’s expenditure as a percentage of the economy over the forward estimates is set to come in at less than the average of the 30 years prior to the Labor government.

Swan says that Costello got $334 billon revenue windfall but failed to invest in the nation’s future. “I’ve copped $160 billion in revenue downgrades”. The Coalition had left an “unsustainable” surplus.

Swan will also put pressure on Abbott to spell out his plans in his budget reply, which he makes on May 16.

“He will know the full extent of the revenue write downs which add to his $70 billion budget crater to give him his starting point.

“Australians rightly expect Mr Abbott to outline the alternate choices he would make to return the budget to surplus while he funds his promises”.

Swan admits he has “lost some political paint” from saying the budget would remain in deficit longer than previously forecast. “But I’m happy to wear it – because it’s the right decision to support jobs and growth”. He says that if the government had the same tax-to-GDP ratio in 2012-13 as the Howard government had in 2007-08 – equal to 23.7 % – its revenues in that year alone would be about $34 billion higher.

“So if our level of tax receipts was as high as Howard and Costello had, we would have a budget surplus in 2012-13”.

Julia Gillard has thrown a heavy punch as the Government continues its pre-budget softening up process. But where the blow will land remains to be seen. Gillard described the budget’s revenue problem – a $12 billion hole in tax estimates since October – as “new news compared to six months ago”, indeed, even compared to three months ago.

So, she said, “I have expressly determined we need to have every reasonable option on the table to meet the needs of the times – even options previously taken off the table.”

The government needed “maximum flexibility” to deal with complex and rapidly changing events, she said in an address in Canberra.

This is made for a scare campaign and the opposition and commentators were quickly raising the spectre of more taxes on super, higher taxes or subsidy cuts for business, another assault on the baby bonus, even “taxes on the family home”. (Gillard did rule out putting the GST back on the table.)

Gillard’s message, however, was mixed. Her signature reforms of schools funding and the disability scheme would be protected.

The burden would be spread. “No one will be singled out”. The budget would not “cut to the bone”. New spending would be covered by savings.

Later government sources played down the language, saying it was a conventional cutting exercise, and ruled out super being revisited. But suggestions swirled that the government might bring in a special levy to pay for the disabilities scheme.

With the deficit debate in full swing, the government knows it has to focus on the important question of, in Gillard’s words, “how, and how fast to fill that significant fiscal gap”.

While the size and time span of the deficit is unknown, the government must outline a credible road back to surplus if it is to present a convincing economic story.

There used to be budget “leaks”; now there are “drops” and “framing”. Bad news is put out to give air on budget night for the good news. Or dire warnings can turn out to have been overstated, so there is relief. (Deloitte Access Economic’s Chris Richardson said the everything-on-the-table line was not necessarily as scary as it sounded.)

Whatever Gillard is talking about, it doesn’t seem helpful to encourage a lot of hyper speculation when the government already has problems galore. If it has in mind some particular nastiness, perhaps better to get it out now. If not, the language was not well chosen.

Gillard tried to meet the critics' most obvious charges about the government crying poor. Yes, despite the write down, revenue would still be up next financial year, she said. But population, health care costs and other things would also increase. “Revenue growth will be less than natural growth in key areas of expenditure”.

And to those who say the issue isn’t about less tax in but about spending, “of the advanced Western economies, only Switzerland spends a smaller share of its economy on government than does Australia”, Gillard said.

An Essential poll released today tested public backing for different blunt instrument savings measures. No doubt the government has done some research itself.

Nearly two thirds (64%) supported increasing taxes for big corporations (including 54% of Coalition voters), while 45% would favour reducing tax breaks for high income earners. Those were the only options where support exceeded opposition.

The levels of opposition for other options were: cut “middle class welfare” such as the baby bonus, first home buyers grant and family tax benefit payments, 48 %; reduce defence spending, 48%; postpone the NBN, 45%; postpone the Gonski changes, 51%; cut spending on unemployment and disability benefits, 60%, and postpone other infrastructure projects like new roads and highways, 71%.

The Coalition side of politics continues to hedge on its finances, But in a speech to the Sydney Institute today, Defence spokesman David Johnston confirmed it won’t be undertaking any spending splurge to restore Labor’s previous cuts to Defence.

Tony Abbott had committed to no further cuts. “We have resolved to cauterise the haemorrhage and then move to begin the repair,” Johnston said.

“Our aspiration is that as soon as we have come to terms and corrected the current fiscal situation we will return to the aspiration of [spending] 2% of GDP [on defence] and 3% real growth in the defence budget. My mantra is to under promise and over deliver”.

Meanwhile Chris Richardson, in a spirit of tease, has assembled a list of measures, each of which would cover the $12 billion shortfall. There is one that catches the eye: if the existing taxes on cigarettes was tripled it would raise $12 billion (and add about $17 to a pack of 25 cigarettes).

Don’t worry smokers, it’s an election year. But what a great public health way of dealing with the black hole.

Labor has been anxious to sharpen the abortion issue against Tony Abbott in the election run up and now it has a way of doing so.

The government has signalled that it wants to put the abortion drug RU486 on the Pharmaceutical Benefits list. It is beginning the process of negotiating over price, before the matter formally goes to cabinet.

And in the discussion of RU486 it is spotlighting Abbott’s record on abortion to try to cast doubt on his assertions that he would not use office to pursue his anti-abortion beliefs.

The timing of the advice for the PBS listing is coincidental, but the latest iteration of the RU486 saga is perfectly tailored for Labor’s “misogyny” narrative about the opposition leader.

Abbott was the health minister who tried to keep ministerial control of the importation of the drug. It took a conscience vote of the parliament in 2006 to put the say in the hands of the Therapeutic Drugs Administration.

All this was against the background of Abbott’s 2004 passionate speech denouncing the number of abortions in Australia.

In the run up to the election, the opposition leader has been trying to bland out his past, and to say as little as possible on the matter. His mantra is that abortion should be safe, legal and rare.

But if the government can focus attention, Abbott is caught in a bind. He doesn’t want to give the slightest ammunition to his government pursuers. The further he has to move away from his old hard-line position, however, the more he will disillusion part of his conservative base, who remember what he said before.

One can’t help wondering what Cardinal George Pell, who is close to Abbott, thinks about all this.

On Friday Abbott was asked, in the context of RU486 being headed for the PBS, whether there was anything a Coalition government would do differently in that process.

“Essentially no”, he said. “When I was the health minister we invariably took the advice of our professional advisers when it came to the safety and the efficacy of drugs.”

Asked whether he was under pressure from groups, he said: “Look, I understand that there are lots of people who are concerned to try to ensure that we have a humane society which deals decently with women who are in a very difficult position.

“And I certainly have always said that the whole issue here was to try to ensure that we empowered women, to try to ensure that we gave women in a very difficult position all the support they needed to make what was for them the best possible choice”.

Yet Abbott is still stuck with his 2004 sentiments in his address titled “The ethical responsibilities of a Christian politician”, to be found on his website.

Then he said: “The problem with the contemporary Australian practice of abortion is that an objectively grave matter has been reduced to a question of the mother’s convenience… To a pregnant 14-year-old struggling to grasp what’s happening, a senior student with a whole life mapped out or a mother already failing to cope under difficult circumstances, abortion is the easy way out.”

Then there was this rather arresting line, “When it comes to lobbying local politicians, there seems to be far more interest in the treatment of boat people, which is not morally black and white, than in the question of abortion which is.”

Health minister Tanya Plibersek is leading the charge to raise doubts about how Abbott would behave as PM.

“I noticed… Mr Abbott is now saying that he won’t interfere with the listing of these drugs”, she said on Friday. “That does go against several decades of statements in his public life and I guess it’s possible that he’s made a complete 180 degree turnaround on this issue.

“I suppose people would question whether once he’s made one complete 180 degree turnaround, whether he’ll do another 180 degrees and end up back where he started. But that really is a question for him.”

DLP senator John Madigan, who is strongly pro-life and might share the balance of power in the Senate after mid-2014, says that “Tony Abbott’s position has shifted with the seas – it’s come in and out with the tide”. Madigan has a private member’s bill that would ban Medicare benefits if an abortion was for the purpose of gender selection.

You can bet that between now and when RU486 is listed on the PBS there will be a considerable campaign from the pro-life lobby. A front page Sunday paper story said: “Couples expecting baby girls have demanded abortions because they wanted a boy instead, doctors have revealed”.

Abortion is mainly a state law matter. The Commonwealth comes in on Medicare funding and PBS drugs. The chances of Abbott as PM disturbing either would seem minimal – he would be bound by undertakings not to do so, to say nothing of the attitudes of colleagues. But the issue is dangerous for him because it can be used to reinforce the anti-women profile the government is trying to construct.

Barry O'Farrell’s signing up to the Gillard offer on schools funding could be the tipping point for the federal government to get a deal with most states.

But the other key conservative states – Victoria and Queensland – are still holding out for better arrangements for themselves.

The Labor states will agree. If the Liberal government in Western Australia, for which the offer doesn’t hold much, refuses to reach agreement, it won’t matter.

Athough it was always considered the easiest of the conservative states, getting NSW on side is a big win for Gillard when she desperately needs one. Those around her have been confident of success on Gonski and now she has taken a significant step towards it. But she does need Victoria and Queensland for real victory.

Tony Abbott reacted grudgingly. “I always expected some states would sign up”, he said. “When you’ve got a government making enormous promises of money, money and more money, the temptation – particularly from hard-pressed state governments – is to sign up.”

Less a temptation, more a rational calculation. Particularly as NSW (and other states) know that if Abbott is elected, the new federal government will be parsimonious. Best to get money in the hand – knowing Abbott would find it very hard to take away.

Opposition education spokesman Christopher Pyne repeated that there needs to be “overwhelming” agreement “in order to secure a nationally consistent school funding model”. In his statement he didn’t define “overwhelming” or say what a Coalition government would do in a less than overwhelming situation.

NSW schools get $5 billion from the deal (which will be legislated by the Gillard government before the election). The state government has announced measures to provide the $1.7 billion state money that will be required under the $2 for $1 agreement.

These include temporarily deferring the abolition of inter-governmental agreement taxes, introducing an efficiency dividend, and some savings from NSW’s VET reforms.

O'Farrell said the Gonski changes provided more resources and a fairer distribution, and aimed at higher standards. “This is a once-in-a-generation opportunity for NSW schools”.

Victorian premier Denis Napthine said his state was happy to negotiate but wanted something that was more generous than what was on the table so far. He also claimed the deal kept changing.

Queensland education minister John-Paul Langbroek was dismissive of the actions of a fellow Liberal state. “It’s obvious that NSW were preparing to make his statement, as last year they cut $1.7 billion from their education system”, he said

“Now in Queensland total education spending this year has gone up 4%. We’re not going to rob Peter to pay Paul just so we can rebrand our education as a Gonski reform.”

It was important that the Premier keep the lines of communication open with the PM, he said, but Queensland was not willing to find the $1.3 billion asked of it. “We’d just like the Prime Minister to meet us half way.” But she “hasn’t indicated that she’s prepared to give an inch at all”.

Although Queensland insists the NSW decision doesn’t put it under pressure, the federal government believes that as other states come in, it will be harder for Newman – considered the hardest nut to crack – to resist, just as it was on the National Disability Insurance Scheme.

Federal Treasurer Wayne Swan, a Queenslander, said: “If it is good enough for NSW kids why do Queensland kids deserve to miss out? Don’t let our school system be second rate to NSW’s.”

The argument that the government has muddied its education message by cutting university funding as part of its package to boost schools spending has been reinforced by polling today from Essential Research.

Asked about the Gonski recommendations in general, 62% approve and only 18% oppose. This is just marginally weaker support than Essential found in July last year (65%).

But people are much more split when asked whether they approve of the government plan to “implement the Gonski recommendations by providing substantially increased funding for public schools, some increased funding for private schools and some reduction in funding for universities”.

Only 40% approved while 43% disapproved. Six in ten Labor voters approved while almost six in ten Coalition voters disapproved.

Those on higher incomes were more likely than average to disapprove of the trade-off package. Of those earning $600-$1600 a week, 47% approved, and 37% disapproved, while of people earning more than $1600, 36% approved and 50% disapprove.

This is the background against which Julia Gillard is trying to sign up a critical mass of states and territories before June 30.

At a community forum of swinging voters tonight in the Melbourne marginal Labor seat of Deakin, Gillard was asked four questions about education – and two of them focused on the university cuts.

Recalling that she first raised her voice as an activist in protest against Malcolm Fraser’s tertiary education cuts, she said if she were a vice-chancellor she would be complaining too. But all universities would still be getting more funds.

While the government is taking stick over the tertiary cuts, Tony Abbott has made it clear they would not be reversed by him.

On the schools package generally, the opposition’s strategy is to create as much trouble and uncertainty as possible between now and the deadline. After that, if Gillard succeeds in getting several government on side, the Coalition is likely to roll itself into a small target. It does not want school funding to be a big issue in the run up to the September 14 election.

At this stage of the debate, the Coalition is constantly sending out mixed signals. Tony Abbott dodged questions at the weekend of how the Coalition would react if Gillard got the states on board.

But Opposition education spokesman Christopher Pyne said today that if a new funding model was overwhelmingly across the states “we won’t seek to unpick that”.

It remains unclear where the key premiers of NSW, Victoria and Queensland will finally come down. With all the current talk about long term budget deficit problems one would imagine the temptation must be great for them to take the federal money, even though they have to stump up some themselves. They are not going to get as good a deal from Tony Abbott, and they don’t have anything obvious to lose.

The federal Liberals would not be surprised if these premiers adopted this attitude.

As the economic debate sharpens just weeks before the budget, Tony Abbott is pushing Kevin Rudd’s 2007 mantra – “the reckless spending must stop”.

Contemplating the reality that in a few months he is likely to be inheriting a big deficit, which he would then own until his government got out of it, the opposition leader is now seeking to project an image of “tough Tony”.

He baulked at being cast as “Mr Austerity” in a Sky weekend interview because “I want the Australian people to have much better services than they do now”, but the “reckless spending” line seemed safe enough.

Of course one person’s “reckless spending” is another’s responsible initiative. But leaving aside that quibble, politicians on all sides, and the public, have to consider some sobering fiscal facts which are highlighted in a new report from the Grattan Institute’s CEO John Daley.

Based on an examination of federal and state budgets, it warns that they are in danger of deficits in the coming decade of 4% of GDP. This would mean governments would need to find savings and revenue increases of $60 billion a year to keep out of the red.

Government health spending has been the biggest runaway area of the last decade, growing by 74% in real terms, but contrary to much conventional wisdom, it’s not the ageing of the population that is the main problem but people generally consuming more and better medical and hospital services and drugs.

Education increased by 48%, with spending on schools rising 37%.

Welfare spending grew by only one third in real terms, well under the growth in GDP; this level of restraint was largely because the total cost of unemployment payments fell in real terms.

Daley argues one would expect Australian governments should be running comfortable surpluses at this point in the mining and economic cycles, to pay back the money spent in the GFC and to create a buffer. But instead they are relying on current minerals prices remaining high to maintain deficits or thin surpluses. This is a high risk situation if mining investment and earnings slow substantially.

The messages from the paper are that in Australia’s case (in contrast to European countries) demography is not destiny – rather it is the decisions that are made, and given that health, welfare and education dominate Australian government expenditure, “it will be hard to reduce future deficits without substantial reforms in these areas”.

The paper argues the Australian economy now is probably as good as it will get and it is vital that we get to the job of surplus building, as a buffer against shocks and to be fair to future generations.

But both sides of politics have committed to big promises and the idea that when belt tightening is on, there will be some political losers is these days very often a no-no (as we see with the schools funding, where there is no hit list).

Abbott is now trying to talk surplus at the same time as the Coalition admits that in government it would have a deficit.

Of course it had no choice but to make that admission, albeit belatedly. The coming budget will unveil a substantial deficit. Treasurer Wayne Swan at the weekend did more softening up, saying there has been a $7.5 billion revenue write down for 2012-13 on the budget projections since the mid year review, due to the high dollar combined with lower terms of trade hitting profitability. This comes on top of a $4 billion write down in the mid year review.

With the Coalition believing it has the election in the bag, Abbott is also doing some softening up, in preparation for government.

He told a community forum in Geelong last week that a Coalition government would do some unpopular things that “hurt”.

Asked on Sky about the government’s tertiary education cuts – which the opposition has criticised – Abbott said: “I don’t think anyone should expect those cuts to be reversed”. He also said: “government is going to have to spend less… There are lots of promises that the current government will make going into the election that the Coalition simply won’t match”.

Asked if the total cost of Coalition promises would be less than Labor’s he said: “exactly right”.

But what about the issue of a surplus?

One can’t make too much of the fact the Coalition is accepting it will have a deficit, given there would be no other option initially. The questions are: when would it get out of it, and how?

Abbott needs to provide a precise pathway back to surplus, setting out measures he would take and a credible timetable.

He mustn’t fudge, in an attempt to minimise losers or lull people into thinking they can have it all.

This would only build up future trouble. He is also in a position of political luxury: given that the Coalition has been so consistently in a winning position, it is easier (and better for later) to be as frank as possible about what needs to be done.

He has been saying for some time that he won’t run a promise-a-day election campaign. But he’s also previously locked himself into unnecessarily expensive promises – his paid parental leave scheme, his direct action plan on emissions reduction – and is now stuck with such commitments.

Abbott says his position is that “we need to get back to surplus as quickly as possible.”

If lighting a road back will be a test for Abbott, the same applies to Swan, whose numbers from 2015 have now been hit by the situation with the European carbon price, to which the Australian scheme is to be linked in a couple of years.

Labor faces tougher choices and less room to manoeuvre than Abbott. Its whole attempt to save seats is based on plans that spend a lot of money and, given its electoral situation, alienating too many “losers” is not a politically attractive option.

Predictably, Julia Gillard did not get a single state to sign up to her school funding reforms at the Council of Australian Government’s meeting. The much talked-up meeting has been a staging post at best.

As soon as it was clear that the real deadline was June 30, the states were all going to hold back. There was no advantage in being first mover.

Even the Labor states, which are keen to clinch a deal, could not afford to be seen rushing, because their voters might think they were not hanging out for the best agreement possible.

What’s unclear after the meeting is whether the PM will be able to move from staging post to finishing line with key, albeit not all, states and territories. The government seems confident it can.

Leaders sent out a mixture of signals after COAG. They all talk up their commitment to education and school kids, their passion, their determination to do their best by their states. But a number had complaints about the model and laments about the money they would be required to contribute.

Everyone is willing to continue to talk. Even West Australia’s Colin Barnett, who said during the week he wouldn’t be signing, wanted his state to “always be part of the discussion”.

NSW’s Barry O'Farrell said: “We are determined to deliver this package if it is in the best interests of New South Wales,” while even Queensland’s Campbell Newman said: “We are going to do our best to come up with an agreement.”

Newman, however, had objections about centralism and extra bureaucracy. He was also “deeply concerned” about the federal government’s university cuts, announced last weekend, which will help pay for school funding.

The new Chief Minister from the Northern Territory, Adam Giles, produced the sort of typically colourful line one might expect from a Territorian – the present proposal was “almost death or Siberia”, though he stressed the door would remain open.

There are upsides and downsides for the Prime Minister having the issue continue unresolved for the next 10 weeks, but the government insists it’s all good.

Labor sources claim Tony Abbott leaned on the conservative states not to sign up at COAG – O'Farrell admits he and Abbott spoke – and this has given Gillard 10 weeks to campaign on an issue that’s Labor’s strong ground.

Labor polling in the last few days is said to have found overwhelming support for the Commonwealth’s injection of funds – two out of three voters in favour.

The federal government will have the more difficult states on the back foot. With the government offering to pay two thirds of a $14.5 billion funding injection over six years, the onus will be on any premier who wants to say “no”. (WA , with high school spending already, is probably a special case.)

The opposition suggested that perhaps the PM had orchestrated a fight with the premiers rather than seeking an outcome, “I suspect she has an election plan rather than an education plan,” opposition education spokesman Christopher Pyne said after the meeting.

Gillard, however, does need to deliver a substantial outcome on her June 30 timetable. She has to show she can achieve. There are already too many half finished issues around.

The communique was full of things on which further work has to be done. It was short on solid decisions. For example on gang violence, organised crime and illegal firearms, leaders “agreed to continue to cooperate to ensure that law enforcement agencies have the powers they need to act effectively across Australia.” There will be work to “further examine options to fight nationally gang violence and organised crime.” This falls short of the federal government’s earlier rhetoric suggesting action was urgent.

But the government believes that if it can get NSW and some other states and the Catholic system into the tent on the schools plan, it is in a very good place for the election campaign.

It can say when campaigning in states that have signed up: “protect your schools money against the opposition trying to repeal these deals”. In those that don’t sign its line would be: “Tony Abbott is stopping your kids getting these benefits.”

The collective talk is over. There will not be another COAG on the schools plan, Gillard will now move to arm twisting the individual leaders.

“I will be pursuing this every day,” the PM said, reiterating her determination to deliver on one of her central planks for the September election.

One talent is often referred to when Gillard’s abilities are canvassed. That is her strength as a negotiator. The coming weeks will test that talent. The stakes are high.

Political focus group research shows people want to hear “plans” for the country. So the government talks plans. Tony Abbott flourishes a 50-page booklet about “Our Plan”. But for ambition, the “plan” of the Business Council of Australia, the big end of town’s lobby group, is right up there with them.

The trouble is that the BCA has put forward such a sweeping wish list that its sheer scope will diminish its impact and likely influence.

Actually, when council president Tony Shepherd stood up at the National Press Club he didn’t deliver “the plan” itself, but a foretaste of what is being worked up for release “in the near future”.

One arresting line in Shepherd’s speech will be off-putting for many politicians. “The plan we’re putting forward for Australia requires political leaders who are prepared to lose their jobs to get things done”, he said.

Sometimes politicians are willing to gamble all – John Hewson took a huge risk with his Fightback program in 1993, and lost the unloseable election; John Howard just survived when he rolled the dice on his GST proposal in 1998. But most politicians put political survival pretty high when they are evaluating reform agendas, and such a clarion call is not necessarily a strong selling point.

The BCA’s message is Australia faces crucial choices; it needs to lift its game in almost everything and the situation has to be addressed urgently.

“Australia’s current preparation for the future is somewhere between half-hearted and non-existent”, Shepherd said. Action is required in tax and fiscal policy, population, sustainability. infrastructure, innovation, education, the workplace, regulation, foreign investment and energy.

But the BCA’s approach suffers from a clean-slate mentality. For example, it calls for a fresh tax inquiry. How can this be justified, when we’ve recently had the big Henry tax review?

It’s true that the GST and a key aspect of superannuation were excluded from that, and many are now arguing the GST should be broadened or increased, or both, and superannuation arrangements need more attention. But you don’t need a full tax inquiry for this.

You need to look at the particular issue or issues and try to build a constituency for change which, frankly, is hellishly difficult. One doubts that an inquiry would make it easier; indeed, having the Henry review – which was desirable – didn’t make hard things politically easy.

The BCA says the Council of Australian Governments has failed so “let’s replace COAG and revert to a strategic first ministers meeting, and powerful ministerial councils that have served us well in the past”.

COAG might be failing because the Gillard government is not managing it properly and maybe more should be done at ministerial level. But that doesn’t mean it should be replaced; anyway, COAG essentially is just the old premiers conference by another name.

The federal-state system works well when there are common interests and good management, and at some times it works better than at others. But while there are two powerful levels of government, it is never going to be “fixed” once and for all. Kevin Rudd learnt that lesson after he promised to abolish the “blame game”.

The BCA – which represents the nation’s biggest companies – wants to buy into the pre-election debate, but it doesn’t want to appear to go too far into the rough-and-tumble. It leaves the more knock-them-down politics to the likes of the Minerals Council of Australia.

It has taken out big advertisements in the newspapers declaring that “When Business Works, Australia Works”, in which it has a dig at both sides of politics.

“Populist politics has sent mixed messages to investors and talent around the world”. Well, that would be about Tony Abbott and Barnaby Joyce on foreign investment and Julia Gillard and Labor over 457 visas.

The concern about Australian governments squandering opportunity “due to the proliferation of short-term political fixes and deterioration in adequate levels of due process” seems squarely aimed at Gillard.

So is the call for “a return to policy development that is more open, consultative and inclusive”, with the observation that “this process was adopted by past Labor and Coalition government and has led to some of the nation’s greatest reforms and achievements”. (There’s a message to Abbott in that as well.)

Shepherd said “the next six months in Australia will be critical” and warned: “Perhaps the greatest risk is that we continue to wind back hard won reforms that will be even harder to win back a second time around”.

Big business wants to see a change of government. But it also fears that Abbott is not “dry” enough or close enough to its end of town.

The BCA is right in attacking short-termism, which has become endemic in today’s politics, and in seeing a range of key economic issues as linked together.

But if it wants to get things done it needs a more pragmatic, targeted approach concentrating on a limited number of priorities and accepting that progress which lasts will only be made by compromise and sometimes by modest steps.

“In him I see a future prime minister of Australia”, Kevin Rudd said of Chris Bowen, one of his key backers, the day after last month’s leadership fiasco. Bowen had just resigned from the ministry, a very competent performer gone to the backbench, sniped at by the Gillard supporters who accused him of disloyalty.

Rudd’s statement was a tribute to a mate, but it would have surprised many, because Bowen is not usually named in the short list of possible future Labor leaders.

Yet, on the basis of record and talent he deserves a spot. He probably thinks so too, which may be one motive in putting his time as a private member to use by writing a book. (Tony Abbott, though on the frontbench, penned Battlelines in a period of frustration. It was a useful statement of his beliefs, although he later had to walk away from a few parts.)

Melbourne University Publishing, announcing its catch of another high profile political author (others were Peter Costello, Mark Latham and Abbott) says Bowen will make the case “for how modern Labor must govern”.

The book – to be about 40,000 words, of which Bowen has done 15,000 – will outline his “blueprint for economic growth as the tool for turning aspiration into reality, and how Labor is the best party for those who seek opportunity.”

Bowen is reluctant to elaborate on the record about his enterprise but MUP describes the book as a “clarion call to Labor’s heartland”, outlining his “vision for a mass, participatory Labor party”. “Labor can and should reclaim the mantle of liberalism”, he says in the MUP release.

No doubt one of the proposals he will put forward is that the wider party should be given some say in the choice of party leader, not just the caucus, something he has canvassed before.

The book will outline his own background – the boy from Sydney’s western suburbs – and how he joined the ALP at 15.

Only 40, Bowen is of an age to be part of Labor’s future, even if the party suffers a very bad defeat in September. That’s assuming he can hold his seat of McMahon, on 7.8%, normally safe but not necessarily so in these times in western Sydney.

Son of an NRMA shift worker and a child care worker, Bowen studied economics at Sydney university and was active in local government, serving as mayor of Fairfield, before entering parliament at the 2004 election. His pathway followed the now familiar route of being a political staffer (to a NSW state minister).

From the NSW Right, Bowen initially had a stellar rise: by 2006 he was on the opposition frontbench as shadow assistant treasurer. When Labor won he became assistant treasurer, and minister for competition policy and consumer affairs (where he had troubles with the ill-fated FuelWatch and Grocery Watch).

Under Rudd he was promoted to cabinet as minister for financial services, superannuation and corporate law, and minister for human services.

The logic, and among many the expectation, after the 2010 election was that he would become finance minister, following Lindsay Tanner’s retirement from parliament at that election.

Instead Gillard put him into one of the least-favoured jobs – immigration, which turned into a time of political torture.

Bowen was behind the idea of the Malaysia “people swap”, which might have acted as a deterrent if it hadn’t been for the High Court ruling it illegal and the opposition refusing to pass enabling legislation.

As things became more desperate, with the people smuggling trade flourishing and the Opposition’s “stop the boats” mantra resonating, Bowen proposed to cabinet in October 2011 that Nauru be re-opened as part of a deal that would also include Malaysia. The aim was to try to force the opposition on board.

He was rolled by his colleagues, with Gillard refusing to support the initiative – only to have Nauru embraced by the government in the wake of the report from the Angus Houston panel. The cabinet stoush, the detail of which was leaked, produced bad blood.

Senior Labor sources criticise Bowen over his handling of the in- principle approval for more than 1700 foreign workers for Gina Rinehart’s planned Roy Hill mine. The issue caused serious trouble with the union movement There were claims that Bowen did not adequately consult colleagues including Gillard; Bowen insisted that he had.

Bowen only escaped immigration early this year when he was moved to tertiary education, just a few weeks before his exit from the frontbench.

In his generation of Labor talent are Bill Shorten, 45, from the Victorian right and Jason Clare, 41, of the NSW right, and Mark Butler, 42, of the South Australian left.

At this point Shorten would be the frontrunner for opposition leader after a Labor defeat. But if Labor was in the wilderness for two terms, the party might go through more than one leader, which would bring the well-regarded Clare (or Bowen) into the frame.

In politics there are second prizes and Bowen, with a good background in economics and an ability to do the heavy lifting in selling a political message, would be well qualified to be deputy leader and shadow treasurer in opposition, or treasurer in a future Labor government. He would have been treasurer if Rudd had regained the prime ministership.

The release on his book features the word “aspiration(s)”. The aspirational voters of western Sydney, and other parts of Australia, are a major challenge for Labor, which is failing to connect with them.

Gillard talked about aspirations as she began her western Sydney campaigning week earlier this year, but the Gillard government has got diverted into class war rhetoric and been unable to hold the “battlers”, many of whom aspire to leave the battler cohort.

For example in making the cuts to higher education to help fund the schools program the government might have assumed that Labor’s base cared little about the universities while in fact these people look to getting their kids a tertiary education.

The response to Labor’s superannuation changes shows what it faces. Three polls published this week were negative about the new impost, although it is mild and affects only a small number with large super accounts.

In Nielsen, 52% oppose taxing personal superannuation accounts holding $2 million or more; Essential found 46% against taxing earnings over $100,000 from super assets (40% support); in Newspoll 78% opposed increasing the tax on super and 55% said they did not currently trust Labor on the issue.

The opposition’s fear campaign and Labor’s appalling handling of the issue generated much of the mistrust. But super is also a hot button for the aspirationals. Many of them simultaneously think of themselves as battlers suffering from cost-of-living pressures while imagining that one day they too might have a big dollop in that superannuation account.

Bowen promises his book, released mid year (that is, pre-election), will be different from all those about what’s wrong with the party. It will not, apparently, be a show and tell of the last nearly six years; he plans to refer to his ministerial experiences only as context. But it can’t help being more bad news for Gillard – another backbencher with a lot to say about what needs to be done which will generate a lot of bad publicity for her.

Given that come September Tony Abbott is likely to be PM and Christopher Pyne the education minister, the opposition’s policy on the schools funding plan is crucial, as the outcome of the federal-state Gonski negotiations remains uncertain.

Pyne has now clearly spelled this out. If Julia Gillard can reach a comprehensive deal with the states by June 30, it would stay in place under a Coalition government.

But if Gillard can only get a patchwork result, that would not be acceptable to an Abbott government. Pyne says it would seek to extend the current funding model – which the Coalition prefers anyway – plus the indexation “that we currently have, which is about six per cent over the last 10 years on average”.

Note he is not saying the indexation would be six per cent; for next year the estimate is three per cent.

After rolling over the present system for a year or two, the Coalition says it would negotiate a new agreement with the states. This could include some of the loadings for disadvantage in the Gonski model, which Pyne has praised.

The school funding debate is difficult for the Liberals. Education is natural Labor territory. The Gillard government’s $14.5 billion plan, with Canberra providing $2 for every $1 the states would be required to put in, is a big pot of money to move funding to a broader, more needs basis. The concept is inherently popular.

So Pyne is concentrating his attack on the argument that this is smoke and mirrors (Abbott has yet to comment on Sunday’s announcement). He is saying the government is taking more money out of education – including the weekend’s big cuts to university funding – than it is putting into its schools plan.

The opposition’s position complicates things for the conservative states.

If NSW and Victoria agreed to sign up, they would be annoyed (and concerned) if the refusal of recalcitrant states, Western Australia and perhaps Queensland, meant an Abbott government would seek to unpick their deals.

They would later likely pressure a Coalition federal government to let things stand.

If Gillard managed to defy the odds and get a comprehensive agreement (say by giving WA more money) she would have landed a major victory, and the Coalition would stand to inherit a system it did not want.

Gillard would get marks for achievement; on the other hand, there would no longer be a choice over schools funding, so the issue might lose some election potency, which could suit the Coalition.

If an Abbott government found itself with a hybrid system, it would confront problems in seeking to repeal the state agreements.

With the election on September 14, there would be hardly any of the year left to get the repeal legislation through for the start of 2014. And the timetable would be extremely disruptive for the schools and states that had agreed to the new system.

That’s assuming the repeal bill could be passed – the Senate numbers would still be as they are now, so it would likely be blocked.

(Incidentally, the government insists that any state that signs between June 27, when Parliament is due to rise for the last time before the election, and the deadline of June 30, a Sunday, can be included in the funding scheme. The Australian Education Bill, now before the House of Representatives, would be amended in such a way as to enable this).

Whatever happened to the school funding plan, under an Abbott government the universities would not be getting their money restored. The Opposition is critical of the cuts but will be pocketing them to help its bottom line as it struggles to pay for promises.

As the opinion polls point solidly to a likely Liberal win in September, one industry is already set for a big structural adjustment.

Who’s up and who’s down among the lobbyists depends substantially on the hue of the government, and firms are preparing for a shift of influence.

It was recently reported that NSW Liberal figure Michael Photios, who operates in Sydney, had registered the name Capital Hill Advisory in Canberra and was taking on two former Howard government staffers.

Having once worked for the former PM or his ministers would be one of the best items to have on their CV for those looking for lobbying jobs later this year.

Former Howard chief of staff Grahame Morris is federal director of Barton Deakin Government Relations, a “Liberal” firm which hit the ground in 2010 in anticipation of a NSW Liberal government and the hope that the federal wheel might not be so long in turning.

Morris works with David Alexander, a former Costello staffer, and the firm’s state representatives include Sallyanne Atkinson, former Lord Mayor of Brisbane and former federal Liberal candidate. In Victoria the firm has John Griffin, who worked for Howard. Peter Collins, one-time NSW Liberal leader, operates out of Sydney.

Barton Deakin is the Liberal “sister” of the Labor firm Hawker Britton – the parent company of both is STW Group, a marketing and PR umbrella with more than 75 operating companies. Clients will be shifted across within the family, from Hawker Britton to Barton Deakin.

“If Tony wins, we are looking at putting on seven or eight people overnight [in Canberra]”, Morris tells The Conversation. “The sort of people” it would like to hire would be Howard government staffers (after all, Abbott boasts that 16 of his team were former ministers – it would be like old home week).

It could be a tight market, Morris thinks, because the firm would be in competition with the staff-vetting committee that a Coalition government would have.

The lobbying businesses – there are nearly 280 on the federal register – include companies such as Kreab Gavin Anderson, which is essentially fire-proofed against the political cycle.

It does broader corporate and financial communication work as well as lobbying. Employing people from both sides of the political fence, it can shift its talent to suit the complexion of the government. Managing partner Brian Tyson says: ‘'We’re bipartisan – that’s our model; our business is largely unaffected by changes of government’‘.

The politically-tailored firms include hybrids. Ian Smith’s Bespoke Approach, which operates out of Adelaide, has two high profile former cabinet ministers, Alexander Downer (Liberal) and Nick Bolkus (Labor). Smith (who worked for former Liberal premier Jeff Kennett) has recently teamed up with former Northern Territory Labor chief minister Paul Henderson: Bespoke Approach and Henderson have established Bespoke Territory, based in Darwin.

Government Relations Australia has former federal Treasurer John Dawkins as a director and has just appointed former Liberal minister Helen Coonan to its board (it’s not planned she will directly lobby). Its policy is for a bipartisan board with a slight tilt to the government of the day.

The “rats and mice” of the industry include small outfits often started by former political staffers. Steve Carney of Carney Associates hung out his shingle in 1979 after working for then National Country party deputy leader Ian Sinclair. “We call ourselves boutique. We deal equally well with Liberal and Labor governments”, Carney says. “We try to leave no thumbprints on the glass, no footprints in the sand. The best lobbying is when nobody knows you were there”.

He agrees that if there were a Coalition government the affinity and closeness he has preserved with the Nationals “would provide better access for our clients in terms of the portfolios of regional Australia, transport and infrastructure and agriculture”.

One newish firm with an impeccable Liberal pedigree and so strong prospects if Abbott wins is ECG Advisory Solutions. Peter Costello chairs the ECG Advisory Board, and one of the firm’s two directors is David Gazard, who worked for Costello, Abbott and Howard and was the Liberal candidate for Eden-Monaro in 2010.

ECG Solutions has boosted its profile by commissioning polling, which the Australian Financial Review is jointly sponsoring, ensuring it gets big coverage in a paper that is influential in business circles.

Gazard see their firm as a cut about common or garden lobbyists.

‘'We’re more about – with the personnel we have – providing deeper insight into the political and regulatory framework of a new government, rather than door opening.

‘'There will be a million people who once worked for a Liberal parliamentary secretary but we’re blessed to have the former treasurer who played a big part in developing the regulatory settings of policy and can negotiate a way throught that maze.’'

For the next few months, however, Hawker Britton will continue to be number one in Canberra. On the register it lists 113 companies as clients, including Bunnings, Officeworks, the Macquarie Group Ltd, and a number of educational institutions. The firm has half a dozen consultants in total including two in Canberra. The Hawker Britton boys and girls volunteer to work in ALP campaigns.

Simon Banks, a director, has worked for a Labor who’s who – Kevin Rudd (in opposition), Simon Crean, Mark Latham, Robert McClelland (“I can keep going”). “We make no secret of the fact that we’re Labor aligned”, Banks says. “So it’s not as busy when there is a Coalition government”. Under an Abbott government Banks would probably be the only person based in Canberra.

“We’re very confident we’ll continue to operate in the Canberra market”, he says, but on a significantly smaller scale. Some work will remain because quite a deal of lobbying activity involves politically uncontentious matters, such as clients needing to know about uncontroversial legislation before parliament. “We regularly take people to meet with Liberal shadow ministers, staff and parliamentarians.

“But when a matter is politically contentious, it’s far more likely that [under a conservative government] people would want a Liberal-aligned firm”.

The lobbyists' register requires that firms list the names of people undertaking lobbying of the federal government. But this doesn’t apply to those who are employed on staff to lobby on behalf of big companies like News and BHP Billiton. The latter took on former Labor heavyweight Geoff Walsh, who was a key adviser to Bob Hawke and national secretary of the ALP. Morris believes the register should be extended to include such in-house lobbyists. “They have serious clout”, he says.

As some firms prepare to rearrange themselves to get the right “Coalition look”, and talent spotting is underway, Ian Smith sounds a warning.

Firms need to be careful “into jumping into offering clients people who are purely touted as Coalition people. That’s not enough. What they have to be are experienced and skilled political operators capable of giving sound advice. If those with experience and skill come from the same political background, that’s a bonus.”

And, says Smith, don’t forget another talent pool. “There are some exceptional people in the world of lobbying who come from a public service background.‘’ He names Jennifer Westacott, currently chief executive of the Business Council of Australia.

With the Coalition committed to cutting back the bureaucracy, there could be a few potential recruits coming onto the market if Tony Abbott wins.

The last, most colourful word goes to Mark Textor, of Crosby Textor, a campaign strategy firm which advises the Liberals.

“We don’t have to refer to our registration as "lobbyists” because our influence is known. We leave that up to the secondary players,“ says Textor who describes the lobbying industry as fraudulent and sleazy, a "pathetic miserable industry” of door openers.

“Over the past two years, we helped formulate the Liberal plan, did the polling, gave strategic advice.

“Ultimately who are they going to listen to? Someone who was a junior hack in a Coalition minister’s office or someone who helped write the strategy?”.

The opposition’s broadband policy argues that achieving the good is better than hanging out for the perfect, especially when you have to pay more and wait longer for the latter, which you don’t really need anyway.

The government replies that the Coalition’s approach is like building the Sydney Harbour Bridge with only one lane.

Tony Abbott didn’t turn up to the launch of the Coalition’s 2010 policy but he was on hand for the 2013 version, though one still felt that heavy drilling on the fine detail might have left him in an awkward space.

But Malcolm Turnbull was there for the grunt work. Turnbull has plenty of expertise but his fuse is short. One provocative questioner got Turnbull’s sarcastic tongue.

In an echo of the Coalition’s old refrain about interest rates, Abbott and Turnbull say: “Basic broadband plans will always be more affordable under the Coalition than under Labor”.

It’s the difference between the gold and silver services.

The NBN is too far advanced – and too politically popular – for the opposition to throw it out. It had no choice but to accept the basic structure while modifying its form.

The Coalition proposes a fibre to the node network (taking fibre to the end of the street or wherever) rather than Labor’s fibre to the premises.

Under the Liberals, the existing copper network would be used for the connection between the node and the premises, which cheapens things considerably.

There would be some exceptions – the fibre would go to homes in new suburbs, for instance, or be installed where the copper wire was in bad repair.

The critics home in on the problems of the copper.

Under interrogation about how long the copper would be fit to deliver fast internet, Turnbull defended its effectiveness and said its life would depend on technology.

Labor was kidding itself when it said it had a future proof technology. “There is no technology that is future proof. If you haven’t learnt that you have been asleep for the last 20 years”.

The Coalition estimates its rollout out will cost in total $29.5 billion. Labor says its plan will cost $44.1 billion but the Coalition claims the real cost of the Labor plan is likely to be more than $90 billion. This is based on various assumptions, and is rejected by the government.

The opposition claims prices under its scheme, to be completed by the end of 2019 (earlier than the ALP plan), would be $24 cheaper a month by 2021 than the Labor plan. The download speed would be slower than Labor’s scheme and patchier.

The NBN would be got into shape – the Coalition is highly critical of its present state – and then sold off to private enterprise.

While the Coalition is presenting its plan as firm, it is also giving itself some wriggle room. It promises no fewer than three inquiries.

One would look at the NBN’s current commercial progress and options to meet the Coalition’s policy objectives; another would audit how Labor’s plan was designed with no cost-benefit analysis or consideration of other options (a blame exercise); the third would review the long-term structure and regulation of telecommunication.

The results of the inquiries presumably would feed into how the Coalition carried out its policy.

While on the face of it the Coalition’s more modest policy appears to make sense, it would come with a good deal of uncertainty. The first class option will still have a lot of appeal for many voters, especially in regional areas.

Country independents Rob Oakeshott and Tony Windsor condemned the Liberal plan with Oakeshott calling it “faster, cheaper and nastier”. The Australian Industry Group sat on the fence, saying it had long supported the need for a cost benefit analysis “to determine the best approach to the rollout and to answer broader questions about what this investment means for Australia’s future economic and social development”.

The time for such a cost benefit study was before the NBN policy was launched, and it was a major lapse of good policy formulation that it was not done.

Those wanting to see the Coalition put out more policy will have one to wrap their heads around this week when the opposition unveils its broadband plan on Tuesday.

Broadband was a major disaster area for the Liberals in the 2010 election; the mishmash policy, overseen by then communications spokesman Tony Smith, was released late and Tony Abbott himself was not sufficiently across it to explain it properly. In a memorable interview with Kerry O'Brien, Abbott said: “If you’re gonna get me into a technical argument, I’m going to lose it, Kerry, because I’m not a tech head.”

Since then Malcolm Turnbull, tech-head par excellence, has become spokesman, and Abbott, following his earlier bad experience, has no excuse for not being well-briefed.

The challenge for the opposition is that what it has to sell will be, by necessity, a camel. Labor’s NBN has gone too far to be rolled back. The Coalition knows that if elected in September it will be bound by contracts it can’t easily break.

It will be a matter of curbing the future rollout, and setting up a hybrid system that mixes technologies as well as being ruled by the promise of delivering fibre-to-the-node rather than the more ambitious and expensive fibre-to-the-premises on which the NBN is based.

But the hybrid raises obvious questions. What would happen to NBN Co? Clearly, although it would not say so, a Coalition government would want to dispatch the NBN chief executive, Mike Quigley, of whom it has been very critical. But at the moment it is operating partly in the dark. In an ABC interview last month Quigley declined to disclose details of his contract. “I really don’t want to get into speculation now”, he told business journalist Alan Kohler.

The NBN has been one of Labor’s signature policies since Kevin Rudd’s campaign for the 2007 election (when he had a more modest plan). The idea of the nation (mostly) connected to fast broadband, with all the advantages for business and personal life, including making more accessible health and education services, falls into the category of grand vision. It has been likened to the sort of thinking that brought the Snowy Mountains scheme.

In selling something short of that, the opposition will rely on the argument of cost – although we don’t yet know how much cheaper the Liberal alternative will be and Quigley claims the maintenance cost would be higher – and the inefficiencies in the rollout so far.

The cost of the NBN has blown out and delivery is slower than promised. In 2010 it was forecast that the NBN fibre network would be available 1.3 million premises by June this year. The latest forecast is for 190,000-220,000 premises by then.

The opposition will maintain the gold plated fibre-to-the-home model is wasteful and inefficient because many people do not want or need this level of service and speed, plus it also locks in a technology in a fast changing world.

It will say that after two terms of promises, up to two million houses and small businesses can’t get a decent, fast, fixed connection.

There is a lot riding on the debate for communications minister Stephen Conroy as well as for Turnbull.

Turnbull, thought by certain Coalition colleagues to be a little too sympathetic to incorporating some of the NBN in his plan, has to convince the public the mixed model will be both economic and adequate.

For his part, Conroy can’t afford to lose the broadband argument. After the fiasco of his media reforms, which came too late and too badly prepared and argued to have a hope of winning crossbench support, and his earlier admission that the government could not deliver its planned internet filter, Conroy needs to be able to blow Turnbull’s alternative apart.

Together with the Gonski school funding plan (still being negotiated with the states) and the National Disability Insurance Scheme, the government desperately needs the NBN to be a plus for it at an election, in which it will have so much going against it.

While no doubt there will be devils in the detail, the government’s superannuation changes are mild and appear fair. They should not be subject to a scare campaign.

But they will be. Tony Abbott immediately said the governments was slugging the superannuants of Australia.

Fewer than 20,000 people will be disadvantaged. But Abbott’s line is that if the government “comes for your neighbour today it’ll come for you tomorrow.”

The central measure in the government’s package is that from July next year the tax exemption for earnings on super assets supporting pensions and annuities will be capped at $100,000 (which will be indexed to CPI). A 15 % tax rate would apply to earnings above that. You would need assets of about $2 million to be affected.

There are special arrangements for capital gains on assets bought before July next year. The government says this will give people who have already purchased superannuation assets more than a decade to decide whether they want to restructure their super holdings.

The government has steered away from an approach based on people’s income, knowing that opens up the argument about who is “rich”. It has avoided, in any substantive way, retrospectivity (warned against by Simon Crean).

It has also given a carrot, bringing forward for the over 60s a more generous maximum for putting in contributions at a concessional rate.

The reform package has been a long time in gestation, including industry consultations, but it has been rushed out to stem to public bleeding as the debate has raged in recent weeks. A Cabinet phone hook up last night ticked off the plan. There will be no fresh super measures in the budget.

But once again Labor has mucked up its timing, in two ways. It has sparked this massive row in an election year. Its defence is that talks with the industry take time. The answer is to start earlier in the term.

Secondly, this modest package will not be law by the time of the election. After the fiasco of the media reforms, the government won’t even try to rush its measures through Parliament. They will form its election policy.

There is a touch of cunning here, however. This is announced policy so the savings will help the budget bottom line. They are only $900 million over the forward estimates ($10 billion over ten years) and Treasurer Wayne Swan emphasises this is about long term sustainability rather than immediate “saves”. But still, in hard fiscal times, everything helps.

So the governments gets the benefit of the savings but at a political cost. Tony Abbott will not be able to claim any savings for his bottom line because if he becomes PM, the measures will never go ahead. But he will be reckoning that he will still reap a political windfall.

Superannuation Minister Bill Shorten says a proposed Council of Superannuation Custodians (to ensure future changes are consistent with an agreed charter) would help to put the issue above politics. A nice aim, but not political reality.

No one underestimates the political difficulty of clamping down on the generous superannuation tax concessions for high income earners. Even so, the government is making such a hash of things that it needs urgently to rein in the damage – and the best way of doing this would be to sort out its position and announce it quickly.

To have the present frenzied controversy running from now until the May 14 budget would be disastrous.

Treasurer Wayne Swan and Superannuation Minister Bill Shorten both say the changes to super being considered are not primarily about immediate big savings. “We have a substantial savings task in this budget and whatever changes are made in super will not be making a significant contribution to that savings task”, Swan told a news conference.

Rather, the government wants to “build the system up” for an ageing population, and to put the concessions on a sustainable basis for the longer term. It has made it clear they are not at present. Swan described them as “excessively generous” for those “at the very top”.

If Labor is casting its plan primarily as a reform measure, there is all the more case to set it apart from the budget.

The government has been trying to reassure voters that whatever it does won’t hurt most earners. But its messages have been muddled, and also undermined from within, with former minister Simon Crean issuing public warnings about the risks of putting uncertainty over people’s savings, and now former superannuation minister Nick Sherry, who is retired from parliament, opposing a crackdown on concessions.

On Tuesday the government let it be known that the changes it contemplates would hit only the top 1 per cent-2 per cent of earners. This was more precise (and less emotive) than earlier comments about the targets being just the “fabulously wealthy”.

But then, speaking to the ABC the following morning, Julia Gillard undid any progress made.

Superannuation was “a Labor invention” and therefore “safe in Labor’s hands”, she said.

But “safe” for whom, precisely?

“Well, I’m not going to get into income ranges”, Gillard said, when asked whether she was “fabulously wealthy”.

“I will say this. We made some superannuation changes in the last budget for people who earn more than $300,000 a year.”

Ah, so that’s the figure we’re now talking about?

Maybe, maybe not. “I’m not asking you to draw an inference from that, other than to note when Labor has dealt with superannuation in the past, we’ve dealt with it on the basis of sustainability”.

Gillard was pressed on whether she could say one way or the other whether changes would be retrospective, something that Crean has been banging on about.

Her answer was: “I’m not playing a game about this”.

She added: “Other than to say, when people pick up their newspapers, obviously they should discount things that are just speculation and rumour.”

But there’s the catch. While some things in the newspapers are “speculation and rumour” others are government-inspired. How do the readers distinguish?

Even the apparently authoritative government signals may be fuzzy. Sources now warn that the 1 per cent-2 per cent is indicative rather than absolutely firm, and decisions are not finalised.

When Swan faced a news conference, questioning on super was cut short.

Superannuation gets tax breaks on three fronts. Contributions are taxed at 15 per cent in the fund; investment earnings are taxed at this rate as well. Withdrawals are tax exempt where the recipient is 60 or older.

On Treasury figures, it is estimated that in 2012-13 the top 5 per cent of contributors will receive 20.3 per cent of contribution concessions, while the top 1 per cent will get 5.3 per cent of contribution concessions. Higher income earners also do best out of the earnings tax concessions.

Concessions on super are officially estimated to be $32 billion in 2012-13. becoming the largest tax expenditure for the first time. They are set to rise to nearly $45 billion by 2015-16. In that year, spending on super tax concessions is expected to overtake spending on the age pension. The growth is driven by the rising cost of the concession on earnings, which is expected to increase from about $17 billion in 2012-13 to about $25 billion in 2015-16.

There is a good case, on grounds of equity and long term budget needs, for further action at the top end, beyond the changes in last year’s budget which are still to be legislated. But the forces arrayed against change are formidable and the government is having trouble with its message. As Sherry said, an election year is not a good time to be having this debate. A point the government should have thought of many moons ago.

One of the most interesting aspects of Julian Assange’s bid for a Victorian Senate seat is who will be his running mate.

If Assange happened to fluke a win – which electoral experts say is a very long shot – and then survived any legal challenge to his eligibility, he would face an intractable problem, assuming he was still ensconced in the Ecuadorian embassy when the new Senate met some time after July 1 next year.

The constitution provides that a senator loses his or her place if they don’t turn up for two consecutive months, unless a vote of the upper house gives them leave. Historically, only one senator has forfeited his place (in 1903, through illness). Leave periods have been granted, but never indefinite leave.

While the WikiLeaks party was unrepresented on the floor, the conservative side of politics would benefit in the senate numbers.

When there is a casual vacancy, the ex-senator’s party nominates a replacement, who is formally appointed by the parliament of the relevant state.

John Shipton, Assange’s father, who is getting together the WikiLeaks party, to be launched in Melbourne on Saturday, says he is negotiating with a potential running mate, keeping in mind this person could become the accidental senator.

Assange’s bid has ramped up to another level with the appointment of the politically-experienced Greg Barns and the party’s formal launch. Barns will run the campaign while Shipton, 68, concentrates on building the party.

Barns, who now works as a barrister, was an adviser to John Fahey, former finance minister in the Howard government. He was campaign director for the Australian Republic Movement’s 1999 referendum campaign. Later he was disendorsed as a state Liberal candidate in Tasmania after he criticised the Howard government’s tough policy on boat people.

He became interested in the Assange issue through his involvement in the progressive-oriented Australian Lawyers Alliance; he was then approached for the campaign. “I think Julian’s values are pretty consistent with mine, [in terms of] the rights of the individual vis-a-vis the state”. He will be fulltime on the campaign from June.

UMR polling in September asked people how likely they would be to vote for Assange for a Senate seat – in Victoria he polled 30 per cent.

New polling is about to be done, which will provide a more realistic test now the Assange candidacy is firm and the election closer.

While Assange’s stellar support in UMR polling (including an earlier survey it did) won’t be reflected in a real life vote, it would seem to put him at least in the mix for the sixth Senate place, given that tiny votes have elected former Victorian senator Steve Fielding (although he was installed by a preference deal with Labor) and current DLP senator John Madigan, also from Victoria.

But ABC election expert Antony Green rates Assange’s chances as minimal. He will be competing with the Greens for the last seat. “If Labor and the Greens have 43 per cent of the vote, there’s no room for Assange to be elected”, Green says.

“His best chance of getting elected would be if Labor gave him preferences ahead of the Greens”.

But, despite the falling out between the ALP and the Greens, why would they? The government has been highly critical of Assange.

In practical terms, says Green, “the only way he could get elected is to get the preferences of a lot of [micro] right-of-centre parties”.

This would appear difficult, although the Wikileaks party’s negotiating power on preferences would be boosted if the new polling found his support still high. Barns said he would be disappointed if Assange couldn’t pull in 6 per cent to 7 per cent of the vote in the election adding, on the question of preferences, “I’d be surprised if people didn’t come and have a talk”.

Barns says Assange draws support from across the political spectrum; yesterday he had offers of help from a former Liberal staffer and a former Nationals staffer. But in terms of primary votes, Assange obviously would need to attract some Green and left Labor voters.

The issues on which the Wikileaks party will campaign will include accountability, greater transparency in decision making and the role of the Senate as a house of review, as well as the increase of security powers since September 11, 2001.

The party, which will also run a Senate team at least in NSW and possibly elsewhere, will make some decisions about tactics at its meeting in Melbourne on Saturday. One is how much to use online versus old media for campaigning. For Assange personally, holed up in the embassy, video and online campaigning is obviously the only way to go. Shipton estimates that the campaign will need $100,000 per candidate to run.

Apart from other points of attack, Assange’s opponents will have an obvious killer argument against him: “Why think of voting for a man who won’t be able to take him seat?”

If ever there was a tilting-at-windmills bid, Assange’s is surely it. But then the Senate does see some strange contests – and a few unexpected results.

Speaking recently at a function to mark his 25 years in the Canberra Press Gallery Paul Bongiorno, respected journalist for the Ten Network, emphasised the importance of maintaining an outlook that is sceptical but not cynical.

This is a top maxim for how a journalist should approach his or her work. It is also a good rule for looking at life more widely, and especially for watching the political scene.

But at present an excess of cynicism is, I believe, poisoning much of our public debate. This is potentially quite destructive for the political system.

There is a sort of “anything goes” to debate currently, by some participants, commentators, and members of the public who buy in. This manifests itself in a lack of restraint, often a scant regard for the facts, and a reduced level of civility and respect for others' views.

In this context, the modern phenomenon of our “connected” society can, in relation to the political system, promote both a desirably sceptical approach (its positive side) but also work to stoke cynicism, which is the negative aspect.

Those in today’s young generation have vastly more information at their fingertips and more opportunity to have a say in the political discourse than their parents and grandparents had at the same age.

The role of the internet in changing our lives has been on the scale of the transformational effect of the motor car, the invention of the aeroplane or the advent of television, all of which advanced interconnection.

In politics, the internet works in cahoots with the 24-hour news cycle so that politics is brought to people with unprecedented speed and intensity. And, if they choose, people can tap into politics on a near continuous basis.

You could always write to your local MP, or to the newspaper, about a political issue or a grouch. But how much easier to email.

You could always join a political party. But how much easier to take your political passion to one of the many media or interest group websites. Contrast the decline of political parties with the success of GetUp! internet campaigns.

These days, the voices of the public are listened to as never before. Parties have become obsessed by focus group and quantitative polling.

Media executives don’t just rely on old fashioned news judgement. They use sophisticated research to determine what the audience responds to – in other words, what sells.

Journalists file around the clock to update news services on the internet. Readers flood sites with commentary. But mostly in working hours. You sometimes do wonder how the work gets done – although Katharine Murphy notes in an essay in the latest Meanjin (Autumn 2013) that digital connectedness ‘“condones, and in fact champions, multi-tasking”.

Murphy, now with The Guardian, was the founding author of Fairfax’s live blog, The Pulse. She writes: “A lot of my readers talked to me on the blog while pretending very convincingly to work”.

Her essay is a perceptive insight on the interconnected life, including its addiction and how to handle that.

This connectivity should give people a feeling of empowerment. And in many cases it obviously does.

But there is also a darker side.

“Too much of everything” can lead to people feeling overwhelmed, angry and – ironically – powerless as well.

Some of it goes back to that old joke that it is better not to see how either laws or sausages are made. Paul Keating had this in mind when he was against parliament being televised.

Keating was a superb parliamentary performer, who understood how to play the theatre. But when that performance came into the lounge room, it could look terrible.

Most politicians are in the game to do their best by their electors and the country, according to their various lights. But the democratic system inevitably involves robust and at times ugly clashes.

It’s one thing for people to see this in modest doses. But when they are bombarded endlessly it can be quite off-putting for many, especially because what’s political news tends to be defined in negative terms, with the focus on the bad things that happen rather than the good.

The prolific opportunities to give feedback, through interactive broadcasting (the talk back shows) and via the internet, allow people to have their say on anything almost any time.

But the incitement by some of the shock jocks, who seek to maximise their ratings by being as outrageous as possible, and the fact that comments can often be made on the internet anonymously, mean people say things they usually would not dream of saying in ordinary conversation with their friends and neighbours.

There’s less and less restraint on “venting” and the venting can be spread more widely than ever before.

Some of the intensity that we have been seeing in federal politics is blamed on the hung parliament but I think the changes are deeper, relating to how politics is delivered to the people and how the people send political messages back.

Maybe this release helps our democracy not to blow a gasket. But equally, maybe it degrades the debate and makes the political system appear worse and more dysfunctional than it is.

The connected society, when it is working well for the body politic, should see an electorate that is better informed that in pre-internet days, with voters viewing their politicians with a healthy scepticism, and armed with healthy detectors for apprehending political bull.

But the connected society working badly could eventually make it difficult for any government to operate properly because impatience, intolerance and cynicism led to a system dominated by instant action and reaction.

The question is whether as time goes by the highly connected system will develop its own checks and balances, with the players realising that more self-restraint works better, or whether the addiction to the shouting is too hard to break.

It’s too early to know the answer but how things go will be important for the quality of policy making and government that the generation of those now joining the political debate will experience.

Meanwhile, consider an example of what can happen when there is a short circuit in the world of interconnectivity.

Early on that dramatic Thursday when Labor’s leadership tensions came to a head, Kevin Rudd sent Simon Crean a text. In it Rudd said that Crean should contact him if he planned to say anything touching the leadership.

Crean didn’t see the message. He later explained he had an engagement that prevented him reading it. He threw his grenade, and it had the most dire consequences for both Rudd and himself. It ended Rudd’s chances of a successful tilt at the leadership; it finished the ministerial career of Crean, who was promptly sacked by Gillard.

At a crucial political moment, what happened apparently depended on a man reading, or failing to read, a text.

Most 20-year-olds would be glued to their phone screens, even when doing something else. That multi-tasking. Rudd is a great texter. Crean is not.

The story is a parable for the state of transition we are in.

This article is based on an address given at a University of Canberra graduation ceremony last Thursday.

Julia Gillard will be among the first heads of government to meet the new leadership when she visits China in just over a week.

After the government’s traumas, stepping back onto the international stage will be an attractive proposition for the Prime Minister before she has to face the rigours of battling with the states over education funding at the Council of Australian Governments meeting on April 19 and then the test of the May budget, which will be critical in Labor’s attempt to regroup.

Gillard met the new Chinese president, Xi Jinping at a dinner at the Lodge, hosted by then PM Kevin Rudd in 2010, on the Sunday night before the coup that made her leader.

She has also met the new premier, Li Keqiang on a couple of occasions, and they co-chaired a meeting of business CEOs in May 2011 when she was in Beijing.

Leaving late next week, Gillard will first attend the annual Boao Forum for Asia, before going on to Beijing. The forum’s theme is “Asia Seeking Development for All”, and comes with addresses by leaders and extensive meetings between business executives.

Her Beijing talks will try to give a push to negotiations on the proposed Australia-China free trade agreement – after 19 rounds with no great prospect of early progress – as well as canvass economic and regional issues. Climate change will also be discussed.

Yesterday the Australia-China ministerial dialogue on climate change was held in Sydney; Minister Greg Combet said afterwards: “China is closely monitoring the implementation of Australia’s emissions trading scheme… In the future, we would like to work towards the development of an Asia-Pacific carbon market including major emerging economies like China and South Korea”.

Combet added that later this year China would begin pilot emission trading schemes in a number of provinces and major cities and aimed to move to a national scheme after 2015.

As well as her political talks, in Beijing Gillard will have a business round table, similar to the 2011 one. The delegation accompanying the PM is a who’s who of business names, including Gail Kelly, from Westpac, the ANZ’s Mike Smith, David Peever from Rio Tinto, and Tony Shepherd, president of the Business Council of Australia.

For Gillard, the China visit feeds into the government’s narrative of Australia in the Asian Century, and the opportunities that closer integration provide for long-term, secure jobs for Australians.

One initiative that could come out of the visit is some more formal architecture to guide how the relationship develops.

While China is part of the great Asian opportunity, the relationship has some more difficult and delicate aspects, especially defence issues.

The Chinese were upset by the 2009 Australian Defence white paper, which they they took as reflecting suspicion of China.

More recently, Australia’s involvement in the America “pivot” towards Asia, with the rotation of US troops through the north, was not received well. Before he was recruited to join the Gillard government as Foreign Minister, Bob Carr expressed concern about how Australia’s involvement would go down with the Chinese.

The government has imminent another Defence white paper – defence minister Stephen Smith said at the weekend it would be out by May-June.

James Brown, from the Lowy Institute, says the Chinese will only be interested in two aspects of this paper. The first is “what they can read [in it] about the US intentions”, while the other is “what force structure and budget we come up with, and how that plays into the US network”.

Hugh White, Professor of Strategic Studies at the Australian National University, sees some pulling back by the government from its language around the time of President Obama’s 2011 visit, when the rotation was announced.

“Gillard has well and truly understood that the Chinese were very displeased with the language she used during the Obama visit and she is is trying to reposition herself,” White says.

“All the evidence one sees is that 2013 white paper will be much more cautious in its references to China than the 2009 one”.

Gillard last week blew Kevin Rudd’s leadership hopes out of the water. But he remains to haunt. The former prime minister arrived in China yesterday. He’s having talks with Chinese officials to support businesses in his electorate that want to get into the Chinese market, and he will address the National Defence University today. He is expected to break into Mandarin but perhaps avoid any humour about leadership transition.

Tertiary Education Minister Craig Emerson, who will have to juggle his new job with his old one of Trade Minister, brushes off fears that he won’t have enough time for both. Rather, he sees the two as a good fit.

A highly-educated Australian community is vital to capitalise on the Asian century, and one of Australia’s big exports into Asia is educational services.

As an initiative in the new role the Prime Minister has handed him, Emerson, the senior of the trio of new ministers in higher education and research announced in Monday’s reshuffle, is keen to promote the extension of Australian TAFEs into Asia.

When in Malaysia last year, he was asked whether Australia could establish TAFE campuses there.

“This is familiar territory for Australian universities – we do have campuses in many places,” he says in an interview with The Conversation.

“The new development is the interest that is being shown to me as Trade Minister for developing TAFE campuses.”

“Because they do need highly trained electricians, plumbers, carpenters and graphic designers, to name but a few. And increasingly people who have got training with health and aged care.

“This is why I’ve said the Asian century offers a splendid diversity of career opportunities for young Australians.

“It would be easy to think of the Asian century project for the elites, but we are very much designing the policy for kids from the suburbs of our capital cities to be able to go live and work in Asia and utilise the vocational skills and on-the-job training they have.

“No more than 20 years ago, the idea of Australian universities establishing campuses in Asia was pretty novel. So now we are opening a new chapter for our vocational education sector”, which has “a reputation for very high standards.”

While physical TAFE campuses are not yet common, last year more than 30 TAFE providers delivered vocational training to almost 60,000 students in the region, mostly in China.

Emerson, whose full bundle of responsibilities includes Trade and Competitiveness, Tertiary Education, Skills, Science and Research, will be assisted by Don Farrell (Science and Research) and Sharon Bird (Higher Education and Skills).

As the cabinet minister, “I’ll be doing the policy work” as well as consulting with universities and other key institutions,“ Emerson says, when asked about the division between him and the junior ministers.

He already knows some of the vice-chancellors, including Glyn Davis (Melbourne), Peter Coaldrake (Queensland University of Technology) and Margaret Gardner (RMIT) as well as Ian Chubb, now Chief Scientist but formerly vice-chancellor of the Australian National University).

But he warns, “I’m unlikely to have time to go to lots of dinners – that’s a sacrifice I’m willing to make.”

Trained in economics, Emerson did his PhD at the ANU under Ross Garnaut, who was an adviser to Bob Hawke when he was PM as well as producing this government’s climate change reports. Emerson was a post doctoral-fellow at ANU, before he worked for Labor minister Peter Walsh and later for Hawke.

Emerson has been, and remains, minister assisting the Prime Minister on Asian century policy. He is committed to promoting the Asian century white paper’s objective of increasing the number of Australian universities in the world’s top 100 to 10 by 2025 (at present we have six).

“It’s very competitive,” he warns. Existing overseas universities are improving all the time; new ones are springing up, including good ones in China (which Emerson will visit when Prime Minister Julia Gillard goes there next month).

“This is a race that is well and truly under way and in order for us to achieve the white paper aspirations we will have to run faster in a contest where already universities from other countries are running fast,” he says.

Within Australian universities, it is vitally important to “encourage creative thinking”. This is “at least as important as technical skills”. He sees this as an advantage that American universities have. One reason why young Americans can get fabulously rich in Silicon Valley is that they have been encouraged to think creatively, he says.

Emerson will not be drawn on what’s likely for the sector in the May budget, which is expected to be tough, although presumably also moderated by the fast-approaching election that, on present polling could see a Labor wipeout. But he does defend the research funding cuts in the last year, saying they were against a growing base.

When The Conversation spoke to Farrell he had not yet had a discussion with Emerson about precisely what he would be responsible for.

“I’d expect some discrete areas, like CSIRO and ANSTO (the Australian Nuclear Science and Technology Organisation).”

Farrell presses the point made in the recently-released government policy on industry and innovation (A Plan for Australian Jobs) – that Australia needs to get more value-add from its science.

“We’ve got a great science tradition,” he says. There are “really bright people” in Australian universities and other institutions and in lots of areas, world class research is being done.

But a principal weakness is “that we often invent things but don’t always get the credit for getting them out into the community, as consumer products, medical advances and the like. We often leave it to others.

“We have to ensure that we get the credit and the advantage for rolling these things out.”

The scientists need to step up. “It requires a little more determination on the part of the science community to grab their idea and roll it out”, Farrell says, adding that ‘'the government will assist – promoting a culture to get the advantage."

Farrell, a former official of the “Shoppies” union, found himself in the headlines in 2010 as one of the “faceless men” behind the coup that installed Gillard. He became parliamentary secretary for Sustainability and Urban Water after the election. This brought him into contact with prominent scientists in those areas, he says. From that job, he is proud of sponsoring legislation for the recycling of a wide range of products including television sets and computers.

Farrell is frank that this budget will be difficult but says, “My job will be as advocate [for the science and research community]. I’ve been a pretty good advocate in the past – I’d like to be a good advocate in this new role”.

Bird, a former high school and TAFE teacher, has spent a year as a parliamentary secretary for higher education and skills, so she is already very familiar with the sector. Based in Wollongong, she has focused especially on foundation skills including literacy and numeracy programs.

“Coming from the Illawarra region, I am very conscious of the role post-school education can play in transforming the region and creating jobs with a long-term future, whether in smart manufacturing or emerging manufacturing industries,” she says.

“My passion is the ability of the sector to prepare us for the really good, long term jobs of the future. You want to transform the economy so the jobs are sustainable and securely remunerated. This is particularly important for the regions.”

Bird has also been impressed by the effect of the government’s decision to uncap places in boosting the number of disadvantaged people going to university.

“The number of them who are, like I was, the first in their family to go to university is really encouraging. Particularly those from a disadvantaged background”, such as from migrant and refugee families. “We should make sure we sustain that improvement”.

Julia Gillard’s reshuffle heavily rewards her supporters but also, notably, one senior member of the Rudd cabal.

The changes load up senior ministers with extra responsibilities, putting key areas shed by departing frontbenchers into the safest hands in this very difficult pre-election period.

Gillard used her announcement to separate last week’s horror from what she hopes will be a brighter future.

Labor has been driven by purpose, she said, but “unity has eluded us”.

“Like Australians around the nation, I was appalled by the events of last week”; the Labor party had been “self indulgent”, putting on an “unseemly display”. But out of this it was clear she had the confidence of her colleagues to remain as Prime Minister, the leadership contest was over, and the government could now go ahead “as a government of purpose and a government of unity”.

Loyalists in Team Gillard have prospered in the hand out of portfolios (so have women – thee more in the ministry).

The new ministers are Sharon Bird (Higher Education and Skills), Don Farrell (Science and Research), Catherine King (Regional Services), and Jan McLucas (Human Services). All had been parliamentary secretaries.

The five new parliamentary secretaries are Michael Danby, Andrew Leigh, Matt Thistlethwaite, Amanda Rishworth and Shayne Newmann.

Of these nine, the only black sheep – on the Rudd list (provisionally) – was Thistlethwaite, from the NSW Right, who was a former party secretary in that state.

But Gillard can point to her decision to add Simon Crean’s regional development and local government area to Anthony Albanese’s existing big jobs of infrastructure and transport, as a response to critics of her earlier vindictiveness against the likes of former cabinet minister Chris Bowen.

On the other side of the coin, some in the Rudd ranks, seeing Albanese as a perennial survivor, accuse him of hypocrisy, or worse. Gillard said: “I’ve always felt a sense of comfort with Minister Albanese and his position”.

Albanese, who is also Leader of the House, is very competent, although there must be a question about whether he will be able to find enough time for the amount of regional travel needed. (He did have regional development and local government in the Rudd government.)

Trade Minister Craig Emerson will also find himself extra busy. He has become Minister for Tertiary Education, Skills, Science and Research as well as keeping Trade.

Gillard insisted he would be able to handle both portfolios, saying he was now very experienced in Trade and also noting that the link between the two areas was the “Asian Century” on which he already assists the PM.

Junior minister Bird, a former high school and TAFE teacher, will do the grunt work on higher education. Farrell, on the science and research side, is one of the so-called “faceless men” who helped install Gillard in 2010 and a former official of the “shoppies” union (Shop, Distributive and Allied Employees' Association).

Tony Burke’s new workload (the Arts) is at least pleasurable and he has Victorian MP Michael Danby to help – Gillard said Danby’s lifelong commitment to the arts started when, as a teenager, he worked in his mother’s art gallery.

The post that business will care particularly about is Resources, which has gone to ex-Woodside executive Gary Gray. He is popular with those in the mining industry, and broadly shares his predecessor Martin Ferguson’s pro-business attitudes. His appointment was predictably criticised by the Greens.

Gray’s old job of Special Minister of State has been piled onto Attorney-General Mark Dreyfus. The big question for Dreyfus is whether he will proceed the reforms to the political donation laws which have been languishing in the Senate and for which the government has the upper house numbers. Gray had wanted to reshape the package but many in Labor would prefer to see a bird in the hand.

Greg Combet retains both industry and climate change but now the two departments are being merged. This might be a relief for some Climate Change public servants, who might be able to rearrange their careers in the next few months. They have been staring at the prospect of an Abbott government scrapping the department.

The merger decision was taken ahead of the events of last week. Labor wanted to reap what economies there were rather than leave them for Abbott to put in his savings list.

The two additions to Cabinet are Gray and Jason Clare. Clare was cabinet secretary and has been promoted while retaining his current job of Home Affairs and Justice.

Like Bowen, a Rudd backer who resigned his tertiary education portfolio, Clare is considered a rising star of Labor’s next generation.

The respective fates of these two tell the story of the last amazing days. A week ago, Bowen was in cabinet; now he is on the backbench. Clare, also from the NSW Right and from western Sydney, has taken his cabinet spot.

For the future, Gillard has given no indication of taking on board any of the criticisms or warnings by departing ministers. To those like Ferguson who have called for the government to put aside the class warfare talk and to govern in the Hawke-Keating tradition, she said: “We have got to be clear about our values and about our priorities, and as a Labor government we do govern in the Hawke and Keating tradition… I believe in the power of markets, as did Hawke and Keating. I believe you can have well-functioning markets that enable you to run a nation and a society of fairness.”

Gillard did, however, indicate she had taken one policy message out of last week’s disaster, which included the crash of key media reforms. She won’t be carrying those as policy to the election. That’s something else that is over.

Update: Last week’s debacle has been dramatically reflected in the latest Newspoll with Labor’s primary vote plummeting to 30% and the two party preferred gap widening from 48-52 in early March to a landslide 42-58. In a fortnight, Gillard’s personal performance rating has slumped from 32% to 26%, her dissatisfaction is up from 57% to 65%, Tony Abbott is back in front as better PM, leading Gillard 43% to 35%.

Julia Gillard, the adrenalin presumably still pumping, had quite a weekend. On Saturday she attended the wedding of one of her press secretaries, Laura Anderson, outside Byron Bay, an occasion where the jokes are said to have been good.

Then yesterday the PM was on the run with events in both Melbourne and Sydney, all the time working on reshaping the new frontbench she will announce today.

If she needed more time to think through these decisions that will be crucial to the depleted Labor team’s ability to fight an election only a few months away, she didn’t have it.

She flies tomorrow to Perth where there will be a community cabinet on Wednesday. She couldn’t go without the new line up in place.

Only about half the ministers attend community cabinets these days. An initiative of Kevin Rudd, these gatherings have become more ritual than substance. Ministers who get new portfolios today will either be absent on Wednesday (if they’re lucky enough not to have been rostered), or answering or dodging questions on the fly, having hastily studied quickly-prepared briefs.

As the government tried to steady itself after the horrors of Thursday and Friday, Leader of the House and Transport Minister Anthony Albanese declared he wasn’t going follow the example of other frontbench Rudd supporters and resign.

“There’s no reason why I should”, he told Sky TV yesterday. “I continue to enjoy the support of the Prime Minister as Leader of the House.” It was in Labor’s interests that he remain a minister and House leader, he said.

The thought that “Albo” – who was Kevin Rudd’s preference for deputy PM if there had been a leadership change – should fall on his sword was ludicrous, despite Gillard supporter Laurie Ferguson (brother of Martin, who resigned on Friday) saying on Facebook that Albanese and Mental Health Minister Mark Butler were “gutless wonders” for not quitting.

With Resources Minister Ferguson, Tertiary Education Minister Chris Bowen, Human Services Minister Kim Carr, and Regional Australia Minister Simon Crean (who was sacked on Thursday) plus parliamentary secretary Richard Marles all gone, only those after vengeance could believe the frontbench would be better off without Albanese and Butler.

The word late yesterday was that both were safe in their jobs, an outbreak of sanity amid the madness that has engulfed Labor in the last week.

The reshuffle will be judged in its totality but perhaps the single most critical appointment will be to the Resources portfolio, because of the signal it will send to business people appalled at Ferguson’s loss.

Gary Gray, presently Special Minister of State, is expected to get the job. Gray is from Western Australia, a former ALP national secretary, and a former executive of the mining company Woodside Energy just before entering parliament. The Woodside position gives him special qualifications for the portfolio but also opens him to claims of being too close to the miners.

Defence Minister Stephen Smith, whose name was mentioned as a possibility for the resources post, yesterday made the case against his moving.

“I very much want to stay in the portfolio. We’ve got a white paper coming up, which we need to deliver by May/June of this year. We have another budget in difficult circumstances” – to say nothing of the ongoing work to change Defence culture in the wake of recent and past scandals.

The higher education sector has been particularly anxious about its future representation after the departure of Bowen, who had hardly had time to shake hands with his stakeholders. Lobbying from the sector over the weekend was for the post to remain in cabinet. It is said that it will.

It is expected that the cabinet, which currently has three vacancies, will be trimmed from 21 to 20 in the changes. Jason Clare, presently cabinet secretary but still in the outer ministry, could be put into the A team.

The bizarre events of last week have, unsurprisingly, looked even crazier from abroad. Writing for the Guardian, Paolo Totaro (formerly of the Sydney Morning Herald) said that viewed from Europe and considering Australia’s more than two decades of growth “news of yet another political attack against Australia’s leader smacks of a particular strain of antipodean madness”. Commentary and reports in the Telegraph, Times, and Independent in Britain and Washington Post in the US also reflected the disbelief at the carryings-on.

The paradox for foreign audiences – and indeed for Australian observers – is that a government with everything going for it economically could have been so self-destructive. A bitter mixture of ambition, incompetence and retribution have dragged Labor down, and this fatal combination was never more dramatically on display than in the way last week played out.

The chaos has emboldened the opposition to say it will move a no-confidence motion in budget week (it would not be debated on budget day). Its aim is to put pressure on the crossbenchers. Country independent Tony Windsor said last night that if the motion was coming up now he believed it would have “negligible” chance of passing. “I don’t know what they might have in two months”, he said. “But if it is just based on people wanting to have a day at the polls – I don’t negate agreements easily”.

The opposition threat will simply keep the overseas watchers scratching their heads and wondering – something that in itself is not good for impressions abroad of what’s going on with the Australian government.

Could anything be worse for the Gillard government than Thursday’s leadership farce? Possibly what has happened on Friday.

The events were not so jaw dropping as those surrounding the fizzing spill. But the loss of two of the government’s most respected cabinet ministers, Martin Ferguson (Resources) and Chris Bowen (Tertiary Education), massively damages its credibility, reduces its already diminished capacity to deal with the business community, and looks like the whole outfit is imploding.

The day’s parade of three ministers jumping overboard was surreal. It started with Bowen at 9.30 am. Ferguson fronted the media at 2.45 pm, quickly followed at 3.40 pm by the well-regarded Kim Carr (Human Services, in the outer ministry) who had already been demoted from cabinet in apparent payback for being a Rudd backer.

Each of the three appeared in the Blue Room, where the Prime Minister holds many of her press conferences. It could be seen as the ultimate “up you” gesture to the leader they had unsuccessfully tried to overthrow.

That makes four ministers – Julia Gillard sacked Simon Crean after he demanded the spill – off the front bench, plus parliamentary secretary Richard Marles who quit on Thursday.

The bad joke is that there is plenty of room for promotions. The confronting reality is that the government, facing a difficult budget and a horrendous run up to the election, has a gaping hole in its core.

The Rudd-supporting ministers talked of doing the honourable thing. There was some push factor involved, but not for all of them. The Gillard forces were sending waves of anger in Bowen’s direction. But they didn’t seem to have the same intense feelings about Ferguson.

Gillard should have tried her hardest to avoid this outcome. Perhaps she should have gone as far as reinstating Crean, seen as a party elder, as a reconciliation gesture. But, in a winner-takes-all attitude, she didn’t seem to comprehend how bad three resignations on one day would look. Asked on early morning radio whether she would punish those who plotted against her, she praised Marles for doing the “honourable thing”, adding “I anticipate there will be a few more people considering their position”. Later in the day she said, “I’m someone who’s made of pretty strong stuff, and I think that’s been on display.”

This was the street fighter wanting to kick those already floored, not the leader who understands that it would be to her own benefit to be magnanimous.

With this number of losses, the challenge of the reshuffle has become huge. Whatever she does, it is hard to see Gillard winning any marks, and if it contains retribution, the commentary will be savage.

The exiting ministers all called for unity in the fight of Labor’s life. But there were also devastating critiques, made for use by the Liberals. Ferguson criticised the resort to class warfare, a crack at Treasurer Wayne Swan and Gillard. “The only way we will regain our electoral momentum is not to just focus on class war rhetoric”.

Carr homed in on the recent over-the-top attack by the PM on 457 visas (without naming her). The changes were quite modest, he said, but “the communications strategy around them was an entirely different matter.”

While the ministers bailed out Kevin Rudd ruled out, once and for all, ever seeking to be leader, and gave an account, from his point of view, of what had happened.

Recalling his promise of last year not to challenge, he said that if he had done so, he would have been attacked for “having walked back on my word”.

But clearly this undertaking was not absolute. He said he had told colleagues the only way he’d be available was if there was a draft by a “significant majority”. He did not define “significant”.

On Thursday afternoon he had gathered his key friends and ministerial colleagues and “asked for their views” He quizzed them on the prospects for both a significant majority and just a majority. They said “zero” to both questions. “I said, therefore what should I do", to which they all answered that he should not run because it would divide the party.

If Rudd had been completely faithful to his “no challenge” position he would not have been asking these detailed questions, although, as Crean said publicly, standing in a spill could be seen as not being a “challenge” (but only if you are very literalist).

All the talk of unity by the various players, whichever side they are on, is in keeping with the world of unreality into which this government has descended.

Of course, like the departing ministers, Rudd is pledging to be a team player. “Julia Gillard has my 100 per cent support”, he said. “The time now is to bind up the wound”.

Well, you wouldn’t find enough bandages in half a dozen hospitals to do that.

Update 3:20: Resources and Energy Minister Martin Ferguson, highly respected in the business community, has announced his resignation declaring it the honourable thing to do. Ferguson called on Labor to reclaim the legacy of the Hawke and Keating governments, and condemned the resort to class warfare rhetoric.

…

Now it really is over. As the Gillard government looks a smouldering ruin, Kevin Rudd today declared – through a spokesperson – that he had given up the quest to get back the job he feels was stolen from him.

“Mr Rudd wants to make 100% clear to all members of the parliamentary Labor party, including his own supporters, that there are no circumstances under which he will return to the Labor party leadership in the future”.

Rudd might have drawn a line under this debacle as he prepares to set off overseas. Abroad, he will be feted as a former PM and an experienced voice in international affairs.

He might wish he never had to come back.

At home, his unfulfilled ambition has cost some of his supporters dearly. The well-respected Tertiary Education Minister Chris Bowen has quit. The triumphant Gillard forces made their views clear. On Thursday night Defence Minister Stephen Smith said “there are a range of people who need to seriously consider what they do now”. Bowen had not been in the public front line of the Ruddites but, a well known supporter in last year’s ballot and this week’s push, he has been recently active with his colleagues.

Regardless of this, a wise PM would have wanted Bowen to stay in cabinet. He carried a huge burden when in the Immigration portfolio. He is experienced, competent and articulate (if Rudd had won, he would have become treasurer).

This year he has seen the best of times and the worst of times. In the February reshuffle he escaped Immigration to the much more congenial Higher Education. Now he’s a backbencher. After the election Bowen, who holds a western Sydney seat on 7.8%, might be out of parliament altogether if things go really badly.

Human Services Minister Kim Carr, a prominent Rudd supporter demoted from cabinet by Gillard some time ago, is set to resign from the frontbench too. He’s also got the message.

Having blown Rudd out of the water, the PM and her senior supporters are in a punishing mood, but it is unlikely to work to the government’s advantage. The resignations just underline how divided the party is.

Gillard now has two vacancies in her cabinet – she sacked Simon Crean, who triggered Thursday’s events with his call for a spill. Then there is the expected Carr outer ministry position. Parliamentary secretary Richard Marles resigned on Thursday, as did three whips, including Chief Government Whip Joel Fitzgibbon.

Despite Fitzgibbon’s disloyalty to the PM, the Gillard camp this week praised his skills in keeping Labor’s parliamentary numbers in line (as things turned out, his mustering skills weren’t so good in getting votes into the Rudd yard).

The whips are elected by caucus. Finding three new whips to keep the Labor MPs from missing any votes in the final difficult months of the hung Parliament will be a challenge in itself.

The word around Gillard circles is that she is likely to want only a limited reshuffle, but with a significant number of frontbench vacancies, the changes inevitably become quite substantial.

The Labor party this week has given the impression of losing its collective mind.

The Rudd forces over-reached as they tried to get a leadership change before Parliament adjourned for a seven week pre-budget break.

But despite frenetic activity, they were not able to muster the numbers. Instead of installing an electorally more attractive leader, the result of the destabilisation has been that Kevin Rudd has been burned and the government looks a shambles.

Simon Crean was the scout who threw the grenade. But the general declined to leave the tent, because the army lacked enough ammunition to deliver victory. Rudd wanted, and needed, a draft. But anyone who knows Gillard – and all the Labor MPs do – must be aware she would always stand and fight. The lady is no Ted Baillieu.

Rudd certainly did not intend to be bested again in a head-to-head contest with Gillard. Apart from that, breaking his “no challenge” pledge would shred his credibility. But he can’t have things both ways: he should have reined in his feral supporters.

Apart from Rudd, the huge loser has been Crean. Gillard has sacked him from her frontbench, a deep humiliation for a former leader in the latter stage of his career.

Crean’s behaviour looks totally odd. At his initial mid-morning doorstop he called for the Rudd forces to back off, while indicating Gillard should lift her game. This was despite having already put Gillard on notice.

By lunchtime he was demanding Gillard call a spill, and saying he would stand for deputy leader (which of course he didn’t when it came to the point, even though the deputyship was declared open at the caucus meeting).

There are other casualties. Parliamentary secretary Richard Marles, who spoke out for Rudd, has resigned his position, while Rudd numbers man and chief government whip Joel Fitzgibbon will have to do so as well.

For the second time in little more than a year, Gillard has seen off a Rudd push, and her superior command of tactics helped her do that (as well as many MPs' hatred of Rudd). By calling the 4.30 pm meeting she gave Rudd and his followers virtually no time to do any last-minute lobbying when caucus members were focused on the potential choice.

Her ability to hang on is all the more remarkable given Labor’s appalling polls, her own bad ratings and the continued high level of Rudd’s popularity in the community.

She was also able to stare down the Rudd forces despite the collapse of her media reform proposals, an extraordinary exercise in how to botch the presentation of a policy that, in terms of substance, had some merit.

In the House of Representatives and before the caucus meeting, the PM survived an attempt by the opposition to get a censure motion on the go. But this was only because the vote needed an absolute majority – 76. She lost the vote on a simple majority, 71-73, with crossbenchers Tony Windsor, Rob Oakeshott and Andrew Wilkie voting with the opposition.

In the court of public opinion, the day’s events will simply add to the no confidence vote that the community is sending all the time through the opinion polls.

They were the odd mob – a group of crossbenchers who gathered on Tuesday night in the office of Bob Katter, the Queensland maverick with a party bearing his own name.

The meeting had been organised by country independent Tony Windsor, in an attempt to broker a deal that would muster the five out of the seven crossbench votes needed to salvage key parts of the government’s media package.

Windsor had seen some hope in a suggestion from Katter that would make more independent the highly contentious Public Interest Media Advocate – who the government wants to oversee self regulation in the print and online media as well as to administer the public interest test aimed at preventing greater concentration.

The Katter plan would have the “Advocate” be a panel rather than one person, and that panel would be chosen by another panel.

Those at the meeting also included the Greens Adam Bandt, former Speaker Peter Slipper and suspended Labor MP Craig Thomson.

Tasmanian independent Andrew Wilkie had been invited, but did not attend.

A hitch came when Katter argued against his own proposal – according to one account Katter was “in his full glory” – and a frustrated Windsor, who had given it some public support, lost his temper.

Still, sufficient progress towards a potential deal was made for Windsor to declare on radio this morning that there was “probably a 70% chance of success”. At lunchtime Greens leader Christine Milne said “I give it more than 70% chance”.

For Julia Gillard, the stakes were high. With her leadership swinging in the breeze, to salvage nothing of significance out of this botched exercise would further fuel the criticism that was helping the Rudd forces as they frantically tried to garner numbers to force her out.

But a few hours after Windsor gave his optimistic estimate, the package appeared to be in its death throes. Wilkie declared he opposed the measures. Country independent Rob Oakeshott had already said earlier in the week that he would not support it.

Both Oakeshott and Slipper are critical of the media measures for not going far enough. But Oakeshott is using that as a reason for opposing it, while Slipper told his local paper the package was “a step in the right direction, but a small step”. He supports it.

Thomson last week declared his opposition, although he attended the talks in Katter’s office. At one point the government thought he might abstain.

Katter gave a 1:40 pm news conference in which he detailed his proposal: a 12 person panel to elect three commissioners to create “a people’s watchdog” to “represent and protect members of the public and journalists – particularly those showing courage under difficult circumstances.

“Australians should have the opportunity to put forth names to be selected by the Council for the Order of Australia. This is the same democratic process used by the Council when outstanding Australian citizens are recognised for their community work through an Order of Australia”.

He said the panel members should include three from the journalists association, three from the Australian Press Council, and the remaining six representing retirees, eminent journalists, academia, jurists, employees and business owner-operators.

Despite the apparent hopelessness of the numbers, the government pushed on with trying to see if there was any way of finding some variation of the panel on panel option. Deputy Prime Minister Wayne Swan visited the Katter office. At one point the office locked the door because so many people were coming through.

The government adjourned the House of Representatives with the media legislation still in mid-debate. Most saw the prognosis as bleak. But Windsor revised his optimism only marginally down – to “60%” – while another source in the crossbench camp claimed a compromise were “very much still in play”.

“We are still seeking to find a resolution to the impasse”, Communications Minister Stephen Conroy said tonight. “I’m not predicting an outcome.”

In one of those strange twists of politics Nationals Senate leader Barnaby Joyce’s ambition to switch to the lower House at this election, which had been apparently thwarted, could now be fulfilled.

Joyce had earlier hoped to move to the safe Nationals seat of Maranoa, in his home state of Queensland. But this was frustrated when its veteran member Bruce Scott refused to budge. Faced with the prospect of fighting Scott in a preselection, Joyce backed off, earning points with colleagues for not causing his party unwanted trouble.

Meanwhile in NSW, the Nationals patted themselves on the back for recruiting state independent Richard Torbay to take on independent Tony Windsor in New England. Torbay, whose seat overlaps the federal electorate, looked to be the ideal candidate – well respected and well known.

It all turned sour this week. The revelation that Torbay, a one-time member of the ALP, had been helped in his early political career by the now notorious Eddie Obeid, was then followed by a statement from the Nationals on Tuesday that information – which they declined to disclose – had come to their attention which led to Torbay being dropped as a candidate and asked to quit the party he so recently joined. The Nationals are staying mum about the nature of this information. Leader Warren Truss said today he did not know it.

Joyce, who grew up in the New England area, immediately flagged he wanted to stand for the seat. The NSW Nats have to give the tick off.

In a nice irony, when searching for a candidate to take on Windsor the Nationals tested the names of both Torbay and Joyce, and found Joyce less popular in the area. It turned out to be one of those instances when research backfired.

While Joyce’s move would be a blow to the Nationals in Queensland, where his high profile is a vote magnet, he would be a formidable opponent for Windsor in a seat that was traditionally National party (formerly held by a Nationals leader Ian Sinclair).

For Joyce, running in New England would carry risk. Windsor is as canny a politician as you will find. He has used his balance of power position not just to become a national figure but to extract a lot of goodies for his area.

But in a conservative area, many locals have been critical of Windsor for backing the Gillard government, rather than swinging his weight behind Tony Abbott, of whom he is a bitter critic.

Windsor, who would cast Joyce as the blow in, is considered a tougher candidate for the Nationals to beat than his fellow country independent Rob Oakeshott. But if Joyce secured the seat, it would become safe for him – not too many independents like Windsor come along.

Earlier there was speculation that Windsor, 62, might retire at this election. He seems, however, to be relishing the prospect of the battle ahead. Today he was attacking Joyce’s “lust for power”.

But Joyce, who aspires to lead the Nationals and become deputy prime minister, has also shown he understands the value of some patience when it comes to the pursuit of power. If Joyce gets into the House of Representatives, he would be seeking to position himself as the successor to Truss rather that trying to wrest the leadership from him, which he would not have the support to do anyway. Entering the House at this election is vital for that positioning; if he was forced to wait three years, Joyce would be disadvantaged vis-a-vis others who have an eye to future leadership of the Nationals.

One of Joyce’s challenges would be his relationship with the Liberals, with whom he is often combative – such as over the issue of foreign investment. He gets on well personally with Tony Abbott. But “dry” Liberals, and sometimes even the much less dry Abbott himself, look askance at Joyce’s populism, with its dash of agrarian socialism.

The latest shot in the Labor leadership battle – a Fairfax story saying that two cabinet ministers were “reconsidering their support for the Prime Minister” – has both helped and hindered its promoters.

The story has added to the destabilisation just when Julia Gillard’s authority is being further undermined by the conflict and mismanagement around the government’s controversial media package. But it has also forced the ministers fingered – Bob Carr and Mark Butler – to declare publicly their continued loyalty to the PM.

Despite everyone chattering about it in every corner of Parliament House, no one raised the leadership at today’s regular caucus meeting.

There was, however, criticism of the handling of the media issue, with chief whip Joel Fitzgibbon telling caucus the government could not win the argument on vague concepts such as media diversity, but should be casting its case in terms of protecting victims of reckless reporting.

Fitzgibbon, a Kevin Rudd numbers men, bought in after Gillard named him as one of those in caucus who had previously called for media reform.

Backbencher Janelle Saffin failed to get an answer to her question to the PM asking whether the media plan would remnain the government policy if it failed in Parliament.

Lead author of the story sparking today’s round of leadership excitement – headed “Ministers turn on PM” in the Sydney Morning Herald and “Ministers desert PM” in The Age – was Peter Hartcher, who wrote a report in June 2010 (about the Rudd office checking the then PM’s support) that helped trigger the dramatic coup which installed Gillard.

Today’s story said that Foreign Minister Carr, who is from the NSW right, had told colleagues he had lost faith in Gillard some time ago, while Butler, Minister for Mental Health and a force in the left, had told colleagues he was reconsidering his support for her.

Standing beside US Secretary of State John Kerry at a joint news conference in Washington – the Americans, bemused by the coup against Rudd, must now seriously marvel at Australian politics – Carr declared: “The Prime Minister has my unqualified support.” He said he had not been asked to comment on the article beforehand.

On the ABC, Carr flatly denied speaking to colleagues about Gillard’s leadership and the fortunes of the government. To be frank, that stretches believability; if it’s correct he must be the only caucus member with zipped lips on these matters.

Butler initially stuck to his usual line of refusing to be drawn into leadership speculation. But later he tweeted: “Still a proud member of Julia Gillard’s team, contrary to latest media frenzy”, a line with a Jesuitical touch about it.

Butler has been regarded as a significant ministerial figure in the leadership battle – if he moved decisively, it would carry some weight, Carr was specifically recruited into the government by Gillard herself to be Foreign Minister. The pair may well be disillusioned with her. But what the Rudd forces need is for ministers who have been backing Gillard to publicly desert her, rather than being forced to rally behind her.

Some pro-Rudd sources claim Gillard has lost the numbers but say things are tight and no one knows where it is all going.

As the hours for negotiation on the media bills tick away, if Gillard and Conroy can’t make some progress with the crossbenchers on the core elements of the package, it will provide her caucus critics with a potent weapon to inflict further damage on her. The question is how much more of a battering can her leadership stand?

The media chiefs expect to have the last word about the government’s plan for a print media watchdog – more poodle than pit bull – and a public interest test to prevent further ownership concentration. And in private, the last laugh.

If, as seems likely, these media reforms crash, they will chuckle over how they put that upstart Communications Minister Stephen Conroy in his place.

They came to Canberra, tempers variably in hand, and locked horns with the feisty left senator Doug Cameron.

Cameron used to the hilt his chairmanship of one of the two parliamentary committees inquiring into the package.

After News Ltd’s chief executive Kim Williams gave his spiel about the evils and alleged unconstitutionality of what the government had in mind, the Scottish brogue of Cameron cut to the (British) chase. He found it “absolutely breathtaking to be lectured by the Murdoch press about the privacy laws”. The hypocrisy was huge, he said, after what the Murdoch press had done in the United Kingdom.

Cameron then tried to tie up Williams and Campbell Reid, News’s editorial director, over how the company defined the “public interest”. According to Williams, “the public interest is as long as a piece of string” and “in the eye of the beholder”.

Later, Williams argued that News had fully co-operated with the Leveson inquiry in the UK, a rather cheeky point, given that inquiry followed News International going to extraordinary lengths to cover up the extent of the scandal.

At one point Williams told the MPs: “I didn’t come here for a chemically difficult discussion, I came here to assist the committee to actually look at the legislation.”

Cameron wasn’t letting that go without putting the knife in. “Oh thanks, all the chemically difficult issues are done in your press… and that’s OK.”

“I can’t believe you said that”, Williams retorted.

The senator was like a dog after a bone in pursuing a claim made by former Australian Press Council chairman Professor Ken McKinnon, who told the Finkelstein inquiry into the print media: “I have had an editor say to me, ‘if you promise not to uphold any complaints from my paper, we will double our subscription. Is that a deal?’”

Fairfax’s Greg Hywood (CEO) and Gail Hambly (company secretary) said no one from Fairfax had said that.

Williams could not shed any light on the matter either. Anyway, “no [News Ltd] editor is any position to make any commitment to the Press Council, as to money being given to the Press Council”.

But he had an answer to solving the mystery. McKinnon was his good friend, and “I’m perfectly happy to ask Ken McKinnon”.

Surely McKinnon might just plead confidentiality of sources?

Hywood came out with one of the best quotes of the day when dealing with why it is okay to have a regulator over the broadcast media but not even an accrediting agency to oversee self regulation of print and online.

“The broadcasting industry is fundamentally an entertainment industry with some news on the side”, he said.

He warned that the government’s proposed (independent) Public Interest Media Advocate (now familiarly known as PIMA to its friends and enemies), charged with administering the public interest test as well as accrediting the industry bodies looking after standards, would have seriously dangerous consequences.

When unhappy with something in the media, the minister could be on the phone to his own appointee, saying “fix it” – “fix it being ‘get the media off our backs’”. Hywood said he had seen this sort of thing when he worked for the Victorian government a few years ago.

He also feared that a subsequent government could easily increase the powers of the advocate.

With Labor reeling in the wake of days of fierce attacks on its package, Cameron shot back “You are really kidding us, aren’t you?”

But Hywood, who in a former life was Canberra bureau head for The Australian Financial Review, reminded the senator: “A government with the numbers in both houses can do exactly what it wants”.

Behind the public parade of media chiefs, Communications Minister Stephen Conroy was working on the gigantic problem of the stubborn crossbenchers. The government is willing to make some changes to persuade them.

Last night the Greens said they would support the package provided the government made changes to the public interest test to protect regional news, and limited the number of press councils allowed. The Greens didn’t want the reforms consigned to “the dustbin of history”, leader Christine Milne said.

But while the government won one of the vital five crossbenchers it needs, it completely lost another. Country independent Rob Oakeshott announced he would oppose every one of the six bills in the Labor package.

And fellow country independent Tony Windsor told ABC Lateline that on the crossbench “there is a feeling that most of it is unachievable within the deadline.”

This leaves the government with the exquisite dilemma of whether to extend its current deadline of this week.

In parliament earlier, Tony Abbott moved his first suspension of standing orders for this two week sitting to denounce the package; he and communications spokesman Malcolm Turnbull teamed up for a relatively rare double act.

Meanwhile, the debate was also moving on. Gillard was asked at her news conference and again in Parliament whether, if the package can’t get through this week, she would take it to the election. She dodged. There is no way the Labor backbench would want to go to the polls with these measures in its kit bag.

Predicting federal politics this week is like trying to guess the end of a dense and tortured thriller. One of the clues is today’s Nielsen poll, in which Labor trails 44-56% on the two party vote, unchanged from last month. But how much impact will it have on the plot – and the plotting?

The poll, which has Labor’s primary vote on 31 per cent (30 per cent last month), Julia Gillard’s ratings down and Rudd hugely more popular than she is as preferred ALP leader, is another devastating blow for the government and Gillard, whose prime ministership now clearly hangs in the balance.

It plays into the hands of the Rudd camp, whose campaign in essentially poll driven. It can argue that last week’s Newspoll, showing a 48-52% result, was a rogue. The Ruddites can also point to the reminder by Nielsen pollster John Stirton, writing in today’s Australian Financial Review, who points out that the Coalition has been in front on a two-party basis in every Nielsen poll since the 2010 election.

The current parliamentary fortnight – the last before the May budget – has been a target period for the Rudd forces but, with the numbers still wanting or at least unclear and his “no challenge” undertaking, making change happen is another matter. The Gillard supporters claim the walls are fortified; so far, her key ministerial backers have held firm. But attacks can come suddenly out of nowhere and, given how a false rumour about a leadership move took off last Thursday, Labor is bracing for a wild week, with its end uncertain.

Meanwhile on the parliamentary front, Communications Minister Stephen Conroy’s highly controversial media reforms are foundering. If the crossbench numbers can’t be mustered by a herculean effort, the package, or those parts facing defeat, would be pulled to avoid humiliation on the floor of the House.

The media package is further destabilising Gillard, as her caucus critics question the poor handling of the initiatives and say that if they are lost they must be disowned and not carried to the election as Labor policy, because of the damage the media companies would inflict.

The government needs five of the seven crossbenchers to pass the bills in the House of Representatives.

Craig Thomson, the suspended Labor MP who is now a crossbencher, surprised colleagues last week by declaring his opposition. The Coalition says if Thomson is on its side, it will take one of its own out of the count to avoid his “tainted” vote, but that doesn’t help the government. (It is not “pairing” Thomson, which would mean having a Coalition MP vote with the government.)

With an opposition member outside the chamber, 148 of the 150 MPs would be eligible to vote (Speaker Anna Burke does not get a deliberative vote). Labor, on 70, still needs five for a majority; if the vote were tied 74-74, convention dictates Burke’s casting vote would be against.

In a fascinating coincidence of timing, media policy is this week causing great anguishin British politics.

The dramatic exposure of the Murdoch media’s hacking scandal sparked a huge public backlash, and promises by Prime Minister David Cameron – who was deeply embarrassed, like many other politicians, by revelations of his closeness to News International – to bring in measures to ensure greater media accountability.

But late last week Cameron cut off cross party talks on a new regulatory regime for the press, He is now proposing a “royal charter”, issued by the Queen, providing for the imposition of exemplary damages on papers that declined to be part of it. But it would not be embedded in legislation.

Labour and the Liberal Democrats – whose leader Nick Clegg is deputy Prime Minister – are teaming up to push an alternative, which would be legislated and would give the regulator sharper teeth.

The Observer reported that “on Saturday night it appeared that Labour with the Liberal Democrats would be able to build a cross-party majority to push through their regulatory regime”. The vote is due Monday (British time). Cameron has said he will accept parliament’s will on the question of the regulator being enshrined in law.

Though the Gillard government’s reforms, including a public interest test for transactions that threaten to further concentrate the media, and the removal of the exemption from the privacy provisions for organisations that do not sign up to a tougher press self-regulation regime – have merit, the government has done an appalling job of trying to sell them.

The rushed timetable – Conroy says they must be dealt with this week – and the government’s high-handed approach on detail have given crossbenchers an easy out if they want one.

Yesterday the government started to canvass some of the comments previously made by Press Council figures about the problems in the present system. But it has not been able to any headway against the heavily one-sided coverage in the Murdoch press (reaching beyond ludicrous in The Daily Telegraph) and the apparent reluctance by some other publications to encourage much extensive debate.

With Conroy scrambling to get any footing, Tasmanian independent Andrew Wilkie yesterday said he had not made up his mind but put forward criticisms of the measures, while the Greens said they wouldn’t be rushed and raised problems of substance. The magic number of five appeared to require a minor miracle.

Today executives from the major media companies will be in Canberra to be grilled by the politicians at committee hearings. Whether their performances will affect crossbench views one way or the other remains to be seen, but they are sure to provide some lively viewing.

The ultimate judgment on Stephen Conroy’s extraordinary ultimatum to parliament – pass the media package next week or the government drops it – will depend on whether he gets his measures through. Crossbencher Tony Windsor puts the chances at 40%.

The Communications Minister and the Prime Minister thumbed their noses at proper cabinet processes by presenting ministers with a virtual fait accompli on Tuesday morning, and are giving short shrift to Parliament.

But there is a certain method in their madness with the latter. The government believes it is in its interests to have a time limit on the angry debate, but also it is minimising the period the news organisations have to arm twist the crossbenchers who will determine the package’s fate.

The ferocious campaign by the Murdoch media in particular shows how willing this brawl has become. One can only imagine what the crossbenchers would have been subjected to if the deadline had been, say, late June, the last sitting of this parliament.

Some ministers see the cavalier treatment of cabinet – the lack of proper process was questioned at Tuesday’s early morning meeting by Simon Crean – as symptomatic of what’s happened on a number of issues under Julia Gillard, despite her promise to be more consultative than Kevin Rudd.

But, while there were some questions and concerns, ministers also felt Conroy was steering a middle course. Among those who had acted as a moderating force are believed to have been Treasurer Wayne Swan and former Fairfax man Bruce Wolpe, who is these days an adviser to the PM. Gillard herself was very sensitive to the political danger of going too far.

Still, hard-headed ministers were aware the package was likely to be a negative for the government, although they hoped that within the industry, the non-Murdoch reaction mightn’t be too bad.

In the House of Representatives, the government needs the support of five of the seven crossbenchers, who are suspended ALP caucus member Craig Thomson, country independents Windsor and Rob Oakeshott, KAP’s Bob Katter, former Coalition member Peter Slipper, the Greens' Adam Bandt and Tasmanian independent Andrew Wilkie.

Thomson today said he would not support the package; Oakeshott has been negative and so has Wilkie. Slipper has been “sympathetic”. Katter’s position is uncertain. Windsor hasn’t committed himself – he is concerned about regional and privacy issues. The Greens have had criticisms but may find it hard to oppose. They were early critics of what former leader Bob Brown called “the hate media”. How would they justify to their supporters that doing nothing was better than taking limited action?

It is probably too cynical to claim, as some are, that that package was put up just to fail. Many ministers do believe that measures are needed. On the other hand, as one government source says, if the parliament says no, “no one could give a stuff”. Except probably Stephen Conroy.

Post Script: The opposition confirmed this afternoon that if Craig Thomson voted with it against the media package, it would remove one of its own MPs, thus neutralising his vote.

Disclosure: Michelle Grattan owns shares in Fairfax Media, News Corp and Seven West Media

Bob Katter, the colourful federal crossbencher from Queensland, does have the strangest bunch of friends. He and Kevin Rudd – whom Katter would like to see back as PM – are thick as thieves. And then there is the high profile union leader Dean Mighell; Katter would be delighted if the former Electrical Trades Union Victorian secretary was willing to become president of Katter’s Australian Party (KAP to its friends).

Rudd and Mighell, incidentally, have been bitter enemies. Mighell recalls: “I said to Bob, you love workers and unions a lot more than he does”.

When he left the federal Nationals to sit as an independent in 2001 Katter, a one-time state minister, was seen as a maverick going nowhere. Now he has three MPs, including his son, in the Queensland parliament (though he’d hoped for more seats) and the party he founded is acknowledged to have a chance of a Senate seat.

That could be important if the Senate balance of power shifts away from the Greens to right-leaning crossbenchers (not that Katter would define his party as “right”).

Katter would like to see Rudd back in power, despite believing this would ‘'absolutely’‘ be bad for KAP’s electoral prospects. “I believe Kevin has the potential to be a good prime minister”, he says in an interview with The Conversation. “He was only there for two years and he started building the national information highway, the national energy highway and rescued us from the GFC. Not a bad score.” Katter likes that Rudd “thinks developmentalism”.

“From the narrow interests of my political party, I most certainly wouldn’t [want to see Rudd back]. But I’ve helped Kevin on many, many occasions, and I’d like to think I’d put the interests of my country over the interests of my political party.” The rapport between the pair comes partly from Katter Labor antecedents and the Country party strands in Rudd’s background.

An election with Rudd as PM would be “very close”, Katter believes. “He could definitely win – I’m not saying he would, I’m just saying he could”. Under Rudd, Labor could get back 10 seats in Queensland, he says, while also professing himself agnostic as to whether he’d prefer to see Rudd or Tony Abbott win the election.

As he prepares for a poll six months away at most and closer if Rudd became leader, Katter presides over a shambling party that has been riven by conflict and ill-discipline. (His counterpoint is that the party is only 18 months old and in its first eight months secured 11.7 % in the Queensland election.)

A Victorian federal candidate had to pull out after slighting remarks about gay people. “She was a lovely lady and it was not her fault”. He admits the vetting process, in which he participates, has been wanting. To improve it, he’s going to use “a very tough lady. She’ll assess [candidates] quickly, then throw them out the window if they’ve not got the skills needed to deal with intelligent people in the media”.

Fractures are not surprising, given the party is a ragbag of beliefs. The Katter mob turns up at demos against the Newman government carrying Eureka flags as well as Australian ones. They’ve been “on the picket lines” with the CFMEU to protest about foreign workers on 457 visas.

Katter is fully behind the Abbott plan for the repeal of the carbon tax. The party’s policy is also to support a Coalition government’s repeal of the mining tax, but Katter himself is having second thoughts. “I’m beginning to shift ground. If you’re saying to me, should foreign corporations be able to take all of this stuff home without paying anything to the people of Australia – no I don’t think I’m going to go along with that”.

On industrial relations, “we are well to the left of the Labor party”, and would be “very strongly opposed” to any Abbott government attempt to strengthen the law.

Katter would like Mighell, who is writing a draft industrial relations policy for him, with emphasis on the need for arbitration, to “take any position he chose” in the party. “He has proven an extremely tough fighter for the survival of manufacturing in this country. When he is exposed to the situation in agriculture he will be just as strong for the survival of agriculture”.

Mighell isn’t keen to sign up to the party but he’s “happy to help Bob out. He’s been wonderful for unions to work with”. There will be money for the election campaign.

On the Coalition side of politics, Katter says he gets on well with Abbott and is especially impressed by his chief of staff Peta Credlin. He notes that Abbott is not as rigid on free markets as Liberals such as Malcolm Turnbull and Peter Costello, and “there is a hint of developmentalism in there”.

As well, “on moral and social issues he’d be conservative, and I think we could do with a little bit of conservatism there”. The base of the KAP includes many weekly church goers. Katter attends church regularly although (typically) he is agnostic about the denomination.

Despite its early troubles, Katter hopes the party will run more than 100 candidates, with several Senate candidates. In another example of Katter networking, he says that whether the party fields a South Australian Senate candidate will be up to independent Nick Xenophon – if he “wants us to run and we bring in another couple of percentage points to him”. Xenophon sounds a bit surprised when asked his view, but says he’s meeting Katter next week.

Ever the optimist, Katter claims to be hopeful in the Victorian Senate race, on the ground that former senator Steve Fielding (Family First) and current senator John Madigan (DLP) were elected, via preferences, on tiny proportions of the vote. Tasmania is a “target state” – “remember that we are the anti-Greens party”. Realistically, the party’s Senate chance is in Queensland.

Katter is a shoo-in in his House of Representatives seat of Kennedy (which was held for the National party by his father before him). His secure position is the envy of the other House crossbenchers.

The party’s allocation of preferences will be on a case-by-case basis. Katter says he needs more than $3 million for the national campaign. In the 2012 Queensland election about $1.2 million was spent; about one quarter came from the trade unions and another quarter from the “fishing and shooting people”. Then there was James Packer who “walked into my office, saw Ted Theodore on the wall and I think at that point wrote a cheque for a couple of hundred thousand dollars” ($250,000 to be precise). But Katter doesn’t expect more from that well. “He’s got a lot of things before the government at the moment” and he was deeply unimpressed by an offensive anti-gay advertisement that the party ran.

If the party had a slice of the Senate balance of power, what would be Katter’s wish list? Mostly the unattainable: hacking at the market share of Coles and Woolworths; slashing interest rates (he “couldn’t care less” that the Reserve Bank is independent – “I’d change the law, we’d be quite happy to bring down a government over that)”; and mandating ethanol.

In his office, Katter sits under a picture of the Country party’s legendary leader, Jack McEwen, the high priest of protectionism. Katter himself is proud to be called an “agrarian socialist”. He’s the character, and the wildcard, of the 2013 election.

After an immensely long labour, Communication Minister Stephen Conroy has produced a media policy mouse with a modest roar. That won’t stop the media companies and the opposition treating it as a lion that must be slain. News Ltd proclaimed “a sad day for Australian democracy”.

The package is a political compromise from a divided government trying to minimise upsetting powerful media interests that have the ability, in the election run up, to further damage the wounded Labor party.

It has a number of aspects but let’s deal particularly with some core controversial ones. A “public interest test” would be invoked when mergers or acquisitions threatened to reduce diversity. A Public Interest Media Advocate would make decisions on the basis of the test.

This Advocate would also ensure that bodies dealing with media standards, most notably the Australian Press Council, met certain benchmarks for credible and effective self-regulation of print and online media.

It’s worth considering what the government has NOT done. It has shied away from the approach advanced in the Finkelstein inquiry for an official (though independent) government-funded regulatory body to deal with complaints. That upset newspaper companies and incurred strong and legitimate criticism on freedom of speech grounds.

The detail of the proposed public interest test are vague. But it will not be a “fit and proper person” test – which it should not be.

Under the test, ownership changes would in general be ruled out if they would substantially lessen diversity “among nationally significant news media voices”.

The critics say: Why is this needed? The Australian Competition and Consumer Commission and the Australian Communications and Media Authority already look at sales. What’s the diversity problem? The internet, Twitter and the like provide more diversity than ever.

Yes, but also no. The fact is that the “voices” in the mainstream media have been contracting, for economic and other reasons. Look at the centralising of news gathering in both News Ltd and Fairfax papers.

The other relevant fact here is that there is not equivalence between the “nationally significant news media” and the newer media. The former remain the heavy hitters and the source of news for the bulk of the population. The Conversation plus a dozen other new media sites are not collectively the equivalent of The Sydney Morning Herald or The Daily Telegraph. Arguing that the growth of new media can any time soon deal with the diversity issue is to be guilty of delusion or sprouting propaganda.

So while less regulation is usually to be preferred, and media is a highly sensitive area, I think the high concentration of ownership in Australia does justify a public interest test. The Finkelstein inquiry observed that “Australia’s newspaper industry is among the most concentrated in the developed world”. News Limited owns 14 of the 22 national, metropolitan daily and Sunday newspapers published in Australia.

Under the plan, the decision making would be at arms length from government. That’s sensible, but to have one person occupying the job of Advocate is not. A panel would be better.

The debate about media standards was triggered by Britain’s phone hacking scandal, after which the Finkelstein inquiry was established.

It was something of a knee jerk reaction by the government, because no such atrocities had happened here. The government was felt to be partly motivated by its anger about the treatment it regularly got in the Murdoch press.

Under the Conroy plan, press standards bodies would be “run, funded and operated by the print media themselves.”

The sanction would be that to get their current access to exemptions from privacy legislation, media organisations would have to be members of an approved press standards body, which the Advocate had found was independent and dealt with complaints properly.

This is a fairly light touch approach; even so, it was be better if it were not necessary. But the media have immense power and many in the community – and we’re not talking about politicians here – feel they have no redress when they believe that power has been abused. Sometimes the media are cavalier in their behaviour – including failing to give injured parties proper redress – just because they can be.

There are fine lines and the risk that freedom of speech could be infringed. It would be up to the standards body or bodies to ensure that did not happen. But just as the media insist politicians should meet strict tests of accountability, so many in the community believe the media themselves should be more accountable.

Whatever one thinks of the content of the policy, its preparation and presentation has been a shambles.

It was due months ago but held up by internal argument. Now minister Conroy has presented a take-it-or-leave-it package that he says must be through parliament by the end of next week or the government will drop it. The actual legislation will only be presented on Thursday.

The issue of whether the 75% reach rule (which stops TV networks broadcasting to more than three quarters of the population) should be scrapped has been referred to a parliamentary committee that has to report in a blink of an eye. If approved, that change would be rushed into the package. (A Privacy Tort won’t – it is being referred off to the Australian Law Reform Commission for detailed examination.)

For far reaching changes the timetable is an insult, giving no opportunity for proper public discussion. It’s not only the media companies which are ‘'stakeholders’‘ – the public are too.

But delaying so long has meant the government has virtually no time to spare before the election to try to put in place some legacy media measures. Whether it succeeds will depend on the crossbenchers, who can expect some intense lobbying over the next few days.

Disclosure: Michelle Grattan owns shares in Fairfax Media, News Corp and Seven West Media

Some pressure has been taken off the Prime Minister with today’s Newspoll, which shows Labor substantially narrowing the Coalition’s two-party lead and Julia Gillard significantly improving her better-PM rating to be back in front of Tony Abbott.

The poll, published in The Australian, has the ALP’s primary vote up 3 points to 34 %, and Labor trailing the Coalition 48-52% in two-party terms. The 4 point gap compares with 10 points (45-55%) just a fortnight ago. The vote boost comes after the PM’s high profile campaign in western Sydney, and Newspoll says it appeared to be driven by a “lift in Sydney”, with other states “largely unchanged”.

Gillard support as better PM has risen 6 points to 42%, leading Abbott, who on 38%, down 2 points.

The results should calm, at least for the moment, nervous caucus members who start a two week parliamentary session today.

But, with leadership talk rife in Labor yesterday after federal factors were blamed for contributing to Labor’s big loss in Western Australia at the weekend, Newspoll holds out the temptation of the ALP potentially doing much better under Kevin Rudd.

When people were asked who they would support if a Rudd government faced an Abbott opposition, 47% said they would vote for the government and 39% for the Coalition. This would be a two-party result of 56-44% in Labor’s favour. Rudd supporters will say this validates their argument for change; Gillard backers will argue such a result does not take account of the disruption and division that would accompany a switch.

Rudd rates 44% as preferred Labor leader, Gillard 25 % and Workplace Relations Minister Bill Shorten 16%. While Shorten’s name has again arisen in the current speculation, there is general agreement within Labor that Rudd is the only viable alternative if Labor were to change. Shorten’s continued backing for Gillard is vital to her hold on her position. Rudd has said he will not mount a challenge, a pledge that works to Gillard’s advantage.

The Essential poll, out yesterday, also had an improvement in Labor’s support, with a rise in the primary vote from 32% to 34%. But in this poll Labor trails 45% to 55% in two-party terms.

As debate raged about the relative role of federal and state factors in the WA result, ministers rallied behind Gillard. Special Minister of State Gary Gray declared:

“I believe not only can Julia Gillard win [the election], I believe Julia Gillard is capable of governing not just for the next term but for the one after that. She’s a Prime Minister of great standing and great quality, great character and great tenacity.”

Trade Minister Craig Emerson said Labor faced a challenge to get its message out, with one reason being the “background noise” of the party talking about itself. He appealed to party members inside and outside parliament to talk to the Australian people about their aspirations rather than focusing inward. Emerson rejected the argument that the Labor brand had a bad name across the nation, pointing to its stronger position in Victoria.

Emerson also said that while the Obeid affair, dramatically documented in the NSW ICAC inquiry, was appalling and Labor had “genuine problems” in Sydney, it was absurd to connect the PM to Eddie Obeid.

In an ABC Four Corners program last night on Obeid, Labor elder, Senator John Faulkner, said that “Labor’s standing in the state of New South Wales has been very, very significantly damaged by the revelations at ICAC and it would be very surprising if that didn’t have an impact federally”.

After the latest state defeat for Labor, the tumbrel rolls on towards Canberra. Saturday’s West Australian election saw a swag of seats taken out in a landslide 6 per cent swing against the ALP, which had a primary vote in the low 30s.

What impact this will have on federal caucus thinking is the big unknown. But former state minister Alannah MacTiernan has made sure the leadership question is put up in lights. “From a West Australian point of view… you would plead with Julia Gillard to stand down”, MacTiernan said, declaring this was the only way Labor could dig itself out of its “Greek tragedy”.

Defence minister Stephen Smith was upfront about federal factors hurting state Labor. The ALP was never going to win against a well-regarded first term Barnett government but Smith said the swing was bigger than he had expected. Given the tough time federal Labor had been having, it was certainly a “drag” on state opposition leader Mark McGowan’s campaign.

Smith’s mind would be concentrated by his own situation. His seat of Perth has a margin of just under 6 per cent. In the state seat of the same name, an inner city, trendy area mostly within Smith’s electorate, the long-time well-connected Labor member was swept out. This loss has been a particularly sharp psychological shock for the ALP.

Labor holds only three of the 15 federal WA seats; the others are Fremantle (parliamentary secretary Melissa Parke, on 5.7 per cent) and Brand (Special Minister of State Gary Gray, on 3.3 per cent). Given the bitter disconnect between federal Labor and Western Australia, all three members must be very nervous about September 14.

There will always be argument over impact of federal factors in state elections and the role of the local this time should not be overlooked as everyone – naturally enough given the febrile atmosphere in Canberra – concentrates on national implications. WA rides high on mining; the Barnett government hasn’t upset people. The WA Nationals have ensured the regions are looked after (their leader Brendon Grylls has pulled off his gamble in switching seats, winning the ALP’s Pilbara, part of a big knock to Labor’s regional bases).

But it is notable there is wide agreement that the Gillard government’s unpopularity was significant. McGowan is acknowledged (even by the Liberal side) to have run a pretty good campaign. He would not let Julia Gillard across the border, however the ban wasn’t enough to stop voters mulling on their discontent.

In an exit poll done for Sky TV, 51 per cent said the performance of the federal government was very important in the way they voted (30 per cent said the mining tax; 33 per cent the carbon tax).

As one-time WA premier Geoff Gallop says, it’s part of the general problem with brand Labor. “At every election part of the consideration of electors is that they are unhappy with Labor as a political party. They don’t like the way it is operating.” There is a lack of consistency – for example on climate change – and the general public has the view that too few people have too much influence, Gallop says.

Every effort Gillard makes to change people’s attitudes, or switch the conversation (whether onto positives or negatives) has little result. The party has no reason to believe she will be more successful in the few months between now and the election.

Striking out on another path by changing to Kevin Rudd is so fraught with hurdles (the hatred of him by key ministers, his pledge not to challenge, Gillard’s apparent determination to fight on, the uncertainty of the numbers) that many caucus members are still not sure how it could be done.

Some numbers have drifted towards Rudd. But how many and how solid are they? As they gather in Canberra before tomorrow’s start of a fortnight-long parliamentary sitting, Labor MPs will be looking ahead to tomorrow’s Newspoll, which will play into the volatile mood of an uncertain party.

Contemplating the bleakness, the ALP MPs might leaf through former leader Mark Latham’s Quarterly Essay, out today. Latham argues Labor must re-conceive its identity, answering two questions. Which parts of society does it seek to represent? What are its passions and ideas for them?

He finds hope for the future in the relatively recent past. Labor should recapture “the Keating economic legacy” (none of this current whiff of protectionism). This would help it appeal to the aspirational voters and pursue fairness and equity.

Labor’s “burning passions” should be for education reform, though Latham’s blueprint is different from Gonski (“simply writing a cheque to schools is not a solution”) and alleviating poverty (which involves tackling “the debilitating impact of underclass culture”). Climate change is the mega issue for the future. “Labor should recommence its campaign on the public importance of global warming. To be mute on this subject in the 2013 election year would be a failure of leadership”.

Latham writes: “The logical way to approach Australian politics in the twenty-first century is through a two-phase strategy: in the short term, re-establishing the party’s dominance in economic and social policy, while in the longer term, preparing for the transformative impact of global warming”.

The essay is titled, “Not Dead Yet: Labor’s Post-Left Future”. Of course, despite all its present troubles, the party does have a future. But many federal marginal seat holders fear they are not going to be part of it.

Julia Gillard’s pledge to put foreign workers at the back of the queue for Australian jobs is tapping into what Labor sources describe as the “economic patriotism” deeply embedded in the “battler” view of the world.

Labor research has found a strongly held, almost visceral, view among mainstream voters that there are available jobs which Australians can’t get, and they believe this is not fair. These voters feel that Australians should have the chance to get the jobs – or be given the skills needed for them.

The PM has been pushing her pitch against foreign workers hard while she’s barnstorming western Sydney. In her Sunday address at the University of Western Sydney she pledged “to stop foreign workers being put at the front of the queue with Australian workers at the back.”

It might be politely dubbed “economic patriotism” but this is the strand of xenophobia that perennially runs through Australian politics.

Gillard has not just brought the line out for western Sydney, although here, with areas of high unemployment, might be thought of as particularly receptive to such a message.

Recently the government announced another crackdown on 457 visas. These visas are used to bring in foreign workers sponsored by businesses, which have to establish they cannot get the skills locally. And the government won’t be dropping the issue when Gillard finishes her western Sydney tour – it is likely to be a constant over the next few months.

“We will continue to crack down as necessary to make sure that 457 visas are being used for their proper purpose, which is skills shortages, not replacing Australians who are ready and willing and able to do the work,” Gillard said.

The feedback to Labor is that people believe that employers should have to do a lot more to find locals for the work available.

A measure of Labor’s conviction that this is an issue on which it can get traction is that the government is willing to run the gauntlet of business criticism, at a time when the country needs to boost productivity and unemployment is low.

While 457 visas cover a plethora of skills – indeed, Gillard’s senior communications adviser, Scottish John McTernan, is on a 457 – the public apparently associates them with Gina Rinehart’s much publicised application to bring in workers for the planned Roy Hill mine.

The PM was unable, when pressed, to give specific examples of Australian workers being discriminated against. But this is an election campaign, where perceptions and anecdotes are what count. (Later immigration minister Brendan O'Connor named several instances that suggested misuse of the system).

Asked about the Immigration department recently saying the visa system was working well, Gillard said “I hear and my ministers hear and our local community representatives hear too many stories of times when people were appropriately qualified to do the work and didn’t get the opportunity. So when I’m getting that kind of feedback, the responsible thing is to look at the program.”

Tony Abbott accuses her of a “jarring” assault on foreigners.

He has sought to interpret her comments against foreign workers in a wider context, painting her as casting aspersions on foreigners.

“A very substantial population of western Sydney were foreigners just a few years ago,” Abbott said, “the fact is people from overseas have made a magnificent contribution to our country and trying to stir people up against them is the last thing the Prime Minister should be doing, particularly in western Sydney.”

Of course, migrants and foreign workers who are already in place are not necessarily sympathetic to those who might come.

Abbott, who is playing his own xenophobic card on boat people, also drew an implicitly negative comparison with the asylum seekers, by adding; “people who come to our country the right way, not the wrong way, and who can make an economic contribution from day one as people on 457 visas can – surely they are the best possible migrants to our country.”

Gillard had an obvious response: this is the man who talked about the arrival of asylum seekers as “a form of peaceful invasion.”

Both sides are demonising their “foreigners” of choice on the low road to September 14.

Thirty years ago today, Bob Hawke’s government was elected. The former ACTU leader went on to become one of modern Australia’s best prime ministers. “Hawkie” won three more elections before Paul Keating ousted him in a caucus ballot.

A demoralised Labor party looks back nostalgically. How did that government do so well, while this one is mired with its wheels spinning?

Bob Hogg, initially Hawke’s senior political adviser and later ALP national secretary, says Hawke had “most of the features of a good leader”. He won the trust of his colleagues early on; he took wide counsel from them, and the government had a strategy for reshaping the economy. “The underlying issue is one of trust”, Hogg says. “Without that you get away with nothing.” Pressed for a comparison with the Gillard government, he says, “Let the readers draw their own conclusions”.

Hawke was always the people’s choice; Australians idealised him and identified vicariously with his larrikin reputation. Less remembered is that some senior Labor MPs were sceptical before he became leader, fearing he was a lightweight. Given Australian voters had for years wanted him as their PM, they didn’t much care that he pushed Bill Hayden aside. It’s been a very different story for Julia Gillard, partly though not entirely explained by the fact she shoved out a first term PM, while Hawke replaced an opposition leader who’d had his go at one election.

Hawke hated it when, on taking over, he was asked how he felt to have blood on his hands. It had, in the end, been a consensual handover. But anyway, those hands were cleansed by an immediate decisive election win. The tied 2010 election meant that Gillard has never managed to put behind her the manner of her ascension.

Both the Hawke government and contemporary Labor (most notably in its Rudd years) faced big pressures from abroad. The Hawke administration had little choice but to force open the Australian economy, which meant sometimes flying in the face of Labor’s platform, at other times strong-arming the party into changing it. Before Hawke was elected it would have seemed inconceivable that Labor would float the dollar, commence deregulating the labour market, slash tariffs, and embark on privatisation.

Hawke’s inclusiveness, and his government’s (especially Paul Keating’s) close working relationship with a forward-looking union leadership enabled this extensive reform, especially impressive in hindsight. Bill Kelty, the then-ACTU secretary who collaborated closed with Keating under the Accord between government and unions, says Hawke and Keating understood that “you’ve got to create wealth before you can distribute it. They changed the view of the unions, [saying] don’t talk about class, talk about the economy … let’s be productive”. This compact in turn delivered social wage benefits to workers.

The glitches and troubles tend to be forgotten in the glow of the backward glance. A robust caucus could be bolshie; strong factions were both blessing and curse. The great campaigner flopped in the 1984 election, losing seats.

This government has its Craig Thomson and Peter Slipper scandals; the Hawke one was not flawless. One minister, Mick Young, had to quit – though he soon returned – for leaking that a Soviet diplomat was about to be expelled. But the scandals were not as debilitating and. most important, were dealt with decisively. Taxation was testing then as now. The mining and carbon taxes dog this government. Hawke and Keating reformed taxation but failed to achieve Keating’s ambition to bring in a broad-based consumption tax.

The media scrutiny of the 1980s and early ‘90s was intense, but it was more manageable than today’s 24 hour cycle. There was greater in-depth analysis of policy. Paul Keating took his white board seriously, and insisted journalists did too.

Paul Strangio, associate professor of politics at Monash University, who researches political leadership, believes the long term political cycle worked in favour of the Hawke government. The post war reconstruction period, which lasted through the Menzies era, disintegrated in the 1970s; by the Hawke years there was a new cycle of market based reform, which John Howard then consolidated. “However there is a real sense of the Rudd and Gillard governments coming into office when that project had already reached its maturation and exhausted its policy utility. I think we’re now in something of a policy regime interregnum, when no one quite knows where we’re heading. This helps explain the Rudd and Gillard governments' difficulties in weaving a story around a coherent policy framework”, he says.

“Paradoxically, their problems have been also exacerbated by the legacy of the Hawke-Keating era. The accommodation with the market left social democratic parties like Labor in a philosophical vacuum”. Strangio argues.

An alternative view is that the Hawke-Keating government – operating in the Thatcher-Reagan era – in its accommodation with the market was able to show how to deliver a social democratic outcome (including national health and superannuation schemes).

As we watch the leadership convulsions over coming weeks, recall the final year of Hawke. In mid- 1991 Keating quit as treasurer to make an unsuccessful run at the leadership. He had been pushing for the job since the late 1980s. By the end of 1991, just before he was defeated by Keating, Hawke had a Newspoll dissatisfaction rating of 64 per cent. Gillard’s current dissatisfaction rating is 52 per cent. The ALP primary vote was 36 per cent (32 per cent now).

By then Hawke had had nearly nine years. He was chiselled out of a job he loved but he had written himself positively into history. He, with Keating, had spotted the key issues, won the big battles, landed much policy and tallied more victories than losses.

“Western Sydney” embraces such a diverse collection of places, people and problems that Julia Gillard has to nuance her message as she battles to restore some faith among these disillusioned and doubting voters.

Hitting the hustings last night, she talked about the locals' “dreams”, looked to their aspirations, but also tapped into feelings of inferiority and fear.

“We won’t promise the sun, the moon and the stars – we won’t fill every pothole or catch every crook”, she told cheering supporters in her University of Western Sydney address.

She pledged “five things to make your life easier and improve your future.”

These were to support their jobs “and put Aussie workers first”; deliver high speed broadband to their businesses and homes; get their children a world class education; insure them against disability and keep improving health; and help with the pressures of modern life. She repeated her initiative, announced earlier in the day, of $64 million to tackle “gangs and guns”.

She empathised across borders: as an MP for a seat in Melbourne’s west, she understood first hand “a region’s yearning for recognition and respect.”

“For far too long the community I made my home, the communities I represent, have been the kind of places people hurried through… Being from the west should never be viewed as being second-rate.”

Showcasing the positive, she told the story of a young westie assistant treasurer David Bradbury (a western suburbs MP) had met in Silicon Valley. Denis Mars is “from these streets, who’s founding firms on the other side of the world, who’s making new ideas pay, who’s making his living building new technologies. He is a genuine local success story we can admire. A story of aspiration and achievement”.

Former Labor leader Mark Latham, who has spent half a century in the area, writing in The Australian Financial Review at the weekend, condemned media stereotyping. “Already in the analysis of this year’s federal election we have become the bearded lady along the sideshow ally of Australian politics”, he said.

“The true story of western Sydney is one of economic affluence. People who grew up in fibro shacks now live in double-storey, solid stone homes. … Across the region, families which once manned the production lines of grease-infested factories now own their own businesses or, at a minimum, invest in the stock exchange”.

It was the Hawke-Keating reforms that made the region so much better, Latham argued. But now it was a tougher place to sustain the public’s belief in Labor. Labor had lost western Sydney but the region had also lost Labor “in that it no longer supports the working class template of government regulation, subsidisation and state-led development. If anything, people want government out of their lives… All they ask for is good schools and a health safety net”.

David Burchell, senior lecturer in politics and history at UWS, divides western Sydney into three sub-regions: inner west, close to the city, where the Greens compete with Labor; the middle west, that used to be rusted onto the ALP, and the outer west, with many young families, mortgaged to the hilt, who are swinging voters. Bradbury’s electorate of Lindsay is the iconic “outer west seat”. Labor’s problem is that messages appealing to one area can alienate votes somewhere else, Burchell points out. On an issue such as asylum seekers, the outer west looks for a tough line; inner west voters are sympathetic to those arriving on boats. Inner west people worry about the world getting warmer; those in the outer west are concerned about their electricity bills getting bigger.

By camping out west most of this week, Gillard is making a total nonsense of her claim that in announcing the September 14 election date she wasn’t launching the campaign. Forget the cabinet meeting and prime ministerial paperwork – this feels more like three weeks out from E-Day than Labor “governing”. Ministers are divided about the high profile exercise, some believing that once again credibility has been compromised. A desperate ALP will just wait to see how it all feeds into the national polling due out as parliament reconvenes next week.

If the judgement is that it has gone down badly, that will further harm Gillard’s tarnished authority among her colleagues. Her situation will be made worse if there is a big swing against Labor in Saturday’s Western Australian election.

The trip is already being framed in the leadership context. A ReachTELL automated poll commissioned by Fairfax Media and taken on Thursday in four seats (Werriwa, Chifley, Blaxland and McMahon) found they would be lost in an election held now. But when people were asked about Labor led by Kevin Rudd, Blaxland and Chifley showed winning margins. Burchell is surprised. “The whole Rudd demeanour is not one you think of in terms of Western Sydney.”

The PM is likely to encounter some lip on the street. “She’ll get a lot of grumpy people”, Burchell predicts. “Western Sydney people are known for their frankness”.

But Tony Abbott is taking no chances. He was in the area on Saturday and yesterday and will be on early morning TV from there today. He didn’t try to say he wasn’t campaigning; he did accuse Labor of echoing some Coalition’s law and order policy. Liberal candidates are at railway stations today handing out flyers headed “The 18 broken promises of Rooty Hill”, referring back to a 2010 pre-election forum held there.

Gillard might fall off the trapeze wire, but Abbott and his team were not going to risk being left out of the circus.

Next week the backroom boys from NSW Labor’s embattled Sussex Street HQ – or at least those dealing with the federal election – will relocate to Parramatta in Sydney’s west.

The timing of the exit – pitched as a political message from the discredited NSW ALP about a fresh start – will coincide with Julia Gillard’s high profile week of campaigning in an area that has become toxic for Labor. Her visit includes staying at a Rooty Hill hotel, presumably to show she empathises, although the reaction to this gesture has been predictable.

“Make no mistake – the election will be won or lost in western Sydney”, NSW secretary Sam Dastyari told The Conversation yesterday. Many would say that Labor’s effort to hold back the tide there is futile. Labor has nine seats under 10% in western Sydney and six under 7%. The parties' research indicates the battlers have shifted to the Coalition. The wider stench in NSW, coming from the corruption inquiry, will hurt both federal and state Labor for a long time.

But Gillard will do everything and then some, however black the outlook seems. The recent industry statement was directed at manufacturing workers from areas like this. But it disappeared with little trace, overshadowed by the bad poll before last.

The PM plans to campaign in six or seven seats from Sunday to Thursday: Fowler, Parramatta, Lindsay, Greenway, Banks, Macarthur (held by the Coalition), and possibly Werriwa. One seat not on the itinerary is Reid. John Murphy, a known Rudd supporter, said yesterday that if it were possible he’d like a visit. “I would welcome her with open arms”. Last year Rudd did a Sudanese function in Reid; he was greeted like a rock star.p

It’s ironic that western Sydney is set to give Tony Abbott a leg up to power. In 2010, arguably the under-performance of the NSW Liberal party cost Abbott the election. Big swings were obtained in the state but they did not translate into wins – except in the high visibility contest in Bennelong.

Both Abbott and Gillard are “foreigners” to Sydney’s west. As one Labor man quips, in this area, “being from the north shore is as bad as being from Melbourne”.

Labor’s “western” strategy has been in the making for a while. Apart from the state office move and the Gillard visit, in January, after a shooting, the PM announced she had asked Home Affairs Minister Jason Clare to prepare for cabinet options to address violence in Western Sydney. Law and order is a preoccupation there. Other issues include transport, given the long distances many workers have to travel; employment; boats; health and education. Cost of living is a general gripe.

Gillard’s engagements will include higher education and jobs events; there will be some local media blogging, and she’ll see the ethnic media. Cabinet will meet on Monday so ministers will be out and about in the area.

There is risk for Gillard in taking to the hustings in this high profile exercise – which the Liberals point out is at odds with her claim that announcing the September 14 election date was not to start the campaign. What if some MPs draw negative comparisons with having Rudd on the stump? With feelings running strongly against Gillard and the government, there can always be bad scenes, which don’t look good on television. But there is also a school of thought that it is not such a bad thing to let people “vent” and that just possibly – a long-shot hope – Gillard might get some marks for guts if she is seen among critics.

Even if it all does no good, as the Labor man quoted above puts it: “You’ve got to go through western Sydney to an election. You can’t go around it”.

Today’s Newspoll brings yet another result pointing to a likely Gillard government wipeout and will predictably cause yet more leadership destabilisation. The 31% primary vote for the ALP virtually replicates last week’s Nielsen 30% number and the Newspoll of early this month, which had the ALP on 32%.

These polls have annihilated Labor’s earlier hopes that its fortunes were reviving. The government is trailing 45-55% on a two-party basis in the latest Newspoll, published in The Australian. Yesterday’s Essential poll had Labor behind 44-56%.

In Newspoll the PM’s satisfaction rating (30%) is her lowest since August, down six points since early this month. She has slumped during the month as better PM from 41% to 36%; Tony Abbott, on 40%, is in front for the first time since July.

The results fit the narrative of the Rudd camp which always saw any improvement in the polls as likely to be temporary. They will make the marginal seat holders even more depressed.

But whether or when a tipping point will be reached remains the big unknown. Gillard’s leadership is protected by the extraordinary difficulties involving in removing a second PM. On the other hand, the tension is so high it is always possible that eventually the situation just explodes.

Newspoll found swings and roundabouts when people were asked about a change to Rudd: 24% said they would be more likely to vote Labor while 13% said they would be less likely.

The full parliament will meet again in a fortnight. On the weekend before, the voters of Western Australia will go to the polls, when on present indications the Liberal government is set to be returned. Gillard has been kept well out of that campaign, but a bad result for Labor would bring some flak for her. Then as the sitting week starts there will be another Newspoll.

One risk for Gillard is that her politically weak position is likely to feed into policy battles; she is finding herself facing increasingly heavy weather in trying to get the states to agree to her signature Gonski education reforms, with Victoria, Western Australia and Queensland resisting. There is little incentive for Liberal premiers to play ball with a PM they feel confident is on the way out (never mind whether at the hand of colleagues or voters).

Meanwhile the Australian Financial Review reports today that Gillard will campaign next week for five days in western Sydney – a disaster area for Labor – including staying in a Rooty Hill hotel room.

Voters will probably greet the stay-local gesture with some cynicism, as they do most things politicians get up to these days. Their disillusionment comes through in a couple of questions in the Essential poll. Asked whether Labor deserved to be re-elected, 57% thought it did not. But do people believe the Liberals led by Abbott have shown they have the policies and leadership to be ready to govern? 36% replied yes; 45% said no. Caught between their dislike of the government and their scepticism about the opposition, it’s not much wonder the electors' mood is sour.

Julia Gillard has set an April deadline for a breakthrough with the states for a new schools funding system. She reiterated on Friday that “the big test” would come when she met the premiers then and declared “I hope the premiers will rise to the challenge”.

But Gillard herself is the one who has most at stake. If she can’t get an agreement then or very soon after, she could be left with a big hole in her election pitch.

Her talk and the parliamentary and electoral timetables ensure she will be judged toughly. She know she has to throw everything at trying cut a deal on the proposed Gonski funding model at that Council of Australian governments meeting. But her problem is that key states will not just have issues of money and detail, but also an eye to the federal election which will be only several months away.

Unsurprisingly, Queensland and Western Australia are making negative noises and now Victoria, fresh from forcing the Commonwealth to backtrack on hospital funding, has produced an alternative.

The Victorians say their plan, released at the weekend, would be phased in from next year and when fully operating would deliver more than $400 million extra (federal and state money) a year for Victorian schools. Its elements include increased funding to disadvantaged government schools; a voucher system (called a “pupil premium”) to follow disadvantaged students to any school, and more consistent funding across government and non-government schools for students with disability.

One of Victoria’s gripes with the Commonwealth’s approach is that it believes the federal plan to secure teaching and other reforms – yesterday Gillard announced all schools and states would be asked to sign up to a “national reading blitz” – to go with the new funding system is too intrusive on schools and the state.

The Gonski plan would cost $6.5 billion annually when fully operating but the cash-strapped federal government is proposing a modest start – about $1 billion from federal and state levels combined in 2014.

The Gillard government wants a comprehensive April agreement with all states that would then go into the framework legislation on Gonski that is now before Parliament; that legislation would be passed in the June sitting, the last before the election. (Suggestions last week that the Greens were posing a threat to the legislation were wrong; they said they would move an amendment to benefit the poorest schools but if it was defeated they would still vote for the bill.)

Despite the harsh rhetoric federal Labor sources claim to be optimistic that an agreement, with some local variations between states, will be reached because, they say, that would be in the states' self-interest. Whether this can happen will essentially depend on whether Victoria, Queensland and WA are adopting negotiating positions or deliberately digging political trenches. If it’s the latter, they know they only have to hold out for a brief time beyond the April COAG, before there is a likely Abbott government.

The federal opposition’s position is that it supports the present funding system, based on socio economic regions. But it is open to adopting a Gonski-type loading system for disability, indigenous students, non-English speaking students and economic disadvantage.

If Labor fails to achieve a comprehensive agreement, Canberra will do deals with those individual states that are willing to play and put those into the legislation.

But this would be a messy result on which to go to the election; certainly a great deal less than ideal for a PM who repeated on Friday: “Education is the defining passion of my political life”.

Greens leader Christine Milne faces her existential moment at the coming election. Her predecessor Bob Brown took the Greens to their present high point – nine senators and the sole balance of power in the upper house. If Milne loses that pivotal position, the Greens will automatically be stripped of a great deal of their clout when the new Senate starts in July next year. It would be seen as the beginning of the minor party’s decline.

The Senate contest is far more crucial to the Greens than what happens in Adam Bandt’s seat of Melbourne.

Milne’s spray this week against the Gillard government, breaking the 2010 alliance, is a strategic move in this fight for continued political relevance. Anticipating an Abbott win, the Greens' pitch for Senate votes is a more extreme version of the old Democrats' line of “keeping the bastards honest”. The Greens will say they’d try to stop an Abbott government wrecking the country.

With the conservatives enjoying such strong support in the polls, the electoral task ahead of the Greens is formidable, despite having only three of their nine senators facing the people – Sarah Hanson-Young in South Australia, Peter Whish-Wilson in Tasmania and Scott Ludlam in Western Australia.

Depending how the vote goes in various states, Tony Abbott could have a Senate that allowed him to repeal the carbon and mining taxes with the support of Right leaning crossbenchers.

In the Senate proportional representational voting system, how the numbers play out will depend not just on how the Greens poll but also on Labor and Coalition levels of support.

Of the three upper house Greens up for re-election at this half-Senate poll, the safest will be Whish-Wilson, who took Brown’s casual vacancy last year. Tasmania is Green heartland. Ludlam and Hanson-Young both face tough fights, with the position of Hanson-Young particularly dicey – despite her high profile – because of Labor’s soft vote.

On the other hand, the Greens have a chance of picking up a seat in Victoria and possibly in New South Wales (where their candidate is Legislative Council member Cate Faehrmann). Green sources believe their continued grip on sole balance of power could depend on whether Hanson-Young survives, whether Ludlam can prevent the conservatives winning four seats in WA – or whether (an extremely outside chance) Simon Sheikh, who brings the formidable GetUp! campaigning skills to the task, can snatch a seat in the Australian Capital Territory.

If things go well for the conservatives and badly for the Greens an Abbott government, seeking the crucial 39 votes to pass legislation, could be negotiating with independent Nick Xenophon (who has earlier enjoyed a taste of the balance of power, with his dancing partner then being Family First’s Steve Fielding) and the DLP’s John Madigan. A Katter person from Queensland could also be in the mix. (And who knows what other crossbench candidate might fluke a seat?) It’s highly unlikely the Coalition could win outright control of the Senate.

Milne’s task in appealing to people to vote for the Greens as a Senate check will be challenging because she needs to draw from two constituencies. Most obvious is the Greens hard core base. These true believers just want an Abbott government thwarted. But the second, and potentially large, group (given the polling is showing public uncertainty about Abbott personally) comprises voters who would just like the rougher edges taken off a Coalition government. These are in the middle of the political spectrum, not on the far left of it.

Here arises the argument about “mandates”. An Abbott government elected with a good majority would surely have a mandate for its main, well publicised policies, including repeal of the carbon and mining taxes. But if they retained sole balance of power the Greens would claim they had their own mandate – to stop those policies. This absolutist stand might put off some of those people who would otherwise like a watchdog Senate. The upper house contest naturally is the secondary story in an election campaign. But it can be extraordinarily important. Howard’s unexpected clinching of Senate control at the 2004 election led to WorkChoices, which brought radical changes to the industrial relations system. When that backfired, quite a few Liberals regretted that the Coalition hadn’t been saved from itself by an upper house check.

At this Senate election the stakes will be very high for not just the Greens but the major parties. If the Greens retain sole balance of power and Labor joins with them to block the carbon tax repeal (which would be a big decision for the ALP), there would be a double dissolution. Despite Labor’s claim that Abbott would retain the tax, he would not have a shred of credibility if he did not keep his word.

In a double dissolution the quota is small, so in theory it would be good for the Greens. But if a small party is on the nose, it can be another matter. The DLP was swept out in the double dissolution of 1974, never to be seen in federal parliament again until Madigan’s election in 2010. The Greens have different, more solid, roots but can’t be cavalier about the long term.

So if Milne did retain sole balance of power, the exercise of that power could bring its own big problems.

Postscript

A political operative with a head for numbers has prepared this ‘'poll of polls’‘ on the Greens primary vote. It brings together Nielsen, Newspoll, Essential, Morgan (both telephone and face-to- face), and Galaxy. From a high point of 11.7 per cent around the time of Bob Brown’s resignation in April last year, the trend has been generally down, to 9.6 per cent now.

Bill Shorten is a powerbroker caught on the horns of a dilemma. He is seen as a key figure in Labor’s leadership battle. There are calls for him to step in, which could only mean deserting Julia Gillard, because at the moment he is standing with her. One of the plotters who installed Gillard, if Shorten threw his weight behind Kevin Rudd, the game would be finished.

A former chief of the powerful Australian Workers' Union Shorten, who sees himself as a future prime minister, directly influences some caucus votes, although sources differ about the number, some say only three or four; others suggest a good many more. In Victoria he and Senate leader Stephen Conroy, a solid Gillard man, form the ShortCon group in the Right.

The importance of a change by Shorten would be its symbolism; it would have a domino effect.

So what course of action would be in Shorten’s own interests? To openly put the knife into Gillard would bring him a double problem. First, it would be an admission he had made a serious error of judgment in 2010 (something that is pretty obvious now). Second, and more important, to be part of assassinating a second prime minister would be bad for the reputation of a future leadership aspirant. It would seem to colleagues and public alike that he was not a loyal or trustworthy person. And “trust” has become a hot button with voters.

Yet a change to Rudd could well be to Shorten’s advantage. All indications are that Rudd would do better than Gillard in the election, although the expectation is that he would still lose. If Shorten became opposition leader after a Labor defeat, there would be a big difference between taking over a party that had been routed and one that had had a respectable loss. No leader would be likely to survive two or three terms of wilderness.

Shorten’s best option would probably be for Rudd to become leader without his being actively part of the push. One Labor wag says that in present circumstances Shorten “likes to be chased while still being chaste”. Whether that will be possible is another matter.

If there was a change to Rudd, it would be best for Shorten to avoid seeking advancement. Rudd is believed to have promised Treasury to Chris Bowen. Shorten for deputy leader? Not good for his prospects in the longer term, assuming a Rudd election loss.

Shorten ideally needs to enter Labor’s post election phase with clean hands and as a fresh face. Anyway, if he remained in the Workplace Relations portfolio under Rudd, he would have a high profile and plenty of opportunity to display his abilities. Industrial relations will be a key election fight.

The leadership tussle is at a standoff as caucus members wait for next week’s Newspoll and for the full parliament to resume on March 12 (next week only the Senate sits). Rudd pursues a multi-pronged strategy while he keeps himself in the public eye and hopes the polls will do their work on his colleagues. He is talking policy (as in his long Sunday Sky interview) and conceding past mistakes (up to a point). He attacks Tony Abbott at every available opportunity, to demonstrate he would be the best to take him on, and continues his visits to individual seats to display his appeal. This week he was at a Labor fund raiser in Bruce. Not that local MP Alan Griffin had to be convinced – he is one of Rudd’s numbers men.

Rudd is carrying his message to Mr and Mrs Average via his return to Seven’s Sunrise program and articles like the rather hokey one in the Sunday Telegraph which reported that the Rudd family had become “empty nesters”, referred to the dog Abby (immortalised a few years ago in a book by Rudd and Rhys Muldoon) and advised “guys”, in dealing with anniversaries and the like, how to follow the JDSU (“Just Don’t Screw Up”) principle. At the high end, in the Australian Financial Review the former PM, with 1.19 million Twitter followers, yesterday was handing out some social media advice, warning tweeters not to speak like robots. “I fight my Ruddbot instincts every day”, he confided.

If Tony Abbott becomes Prime Minister, what sort of Senate he has will be crucial for handling the carbon tax and much else. At present the Greens have the sole balance of power but if there was a strong swing to the conservatives, right-leaning senators John Madigan and Nick Xenophon could become key players.

Madigan, from Victoria, is the first DLP senator since the party was swept from federal parliament in 1974. Elected in 2010, he is a fixture for the coming term. If he found himself with a share of power, how might he seek to use it? A speech he will deliver tonight at the Sydney Institute titled “Integrity in Politics” may give the Liberals some food for thought and Labor some potential ammunition.

Madigan takes an uncompromising pro-life position. He does not believe in abortion even after rape. He is scathing in his speech about politicians who fail to follow their conscience.

“There is more to me and the DLP than [the pro-life] issue but… it is an issue I will not shy away from”, he declares in the address.

“For those of us who for decades have fought for justice for the unborn it galls me to watch political candidates strut around seeking votes from pro-life groups only to hear their entourage proclaiming platitudes such as ‘just wait until so and so gets in. They’re staying quiet now but when they are in they’ll sort things out.”

“Then the aptly named ‘so and so’ is elected, having ‘kept quiet about their principles’ and the excuses start. … To those politicians I reserve my utmost disgust. Integrity is not a virtue to them – it’s a tool to be used at their convenience”.

In his speech Madigan chides Tony Abbott, who has recently reaffirmed that he believes abortion should be “safe, legal and rare”. “An aim shared by Barack Obama in his second inauguration speech,” Madigan says. “However I would like to point out that there is no such thing as a ‘safe’ abortion; someone always dies”.

Several years ago Parliament, on a conscience vote and against the will of Abbott, then health minister, removed ministerial control over the importation of the abortion drug RU486. Pro-choice MPs across the spectrum celebrated the decision.

“On October 10, 2012 another ‘celebration’ of RU486 was held in the House. This time it was to ‘celebrate’ the Therapeutic Goods Administration approval for Marie Stopes Health to distribute Mifepristone in Australia”, Madigan says in his speech, adding that the gathering was sponsored by the cross-party Parliamentary Group on Population and Development. Noting the “extraordinary display of bipartisanship from the abortion lobby” he asks: “Where is the pro-life political lobby? … Where is their commitment to the cause?”

After the Labor government’s election, the parliamentary group was instrumental in having scrapped the ban on Australian foreign aid being associated in any way with abortion counselling or services.

That ban, as well as the ministerial discretion over RU486’s importation, had been concessions to independent Tasmanian senator Brian Harradine, whose vote the Howard government needed (he had also got a family planning foreign aid program stopped under the Keating government).

Harradine is a hero for Madigan, who describes him as a “model senator”. “All the senators should aspire to walk in the steps of Brian Harradine”, Madigan told The Conversation. “He never sold out his state; he never sold out his conscience”, and he was “an extremely good tactician”.

Madigan believes that to be in a balance of power situation would be a “privilege”, not a “licence to bludgeon”, but an “opportunity to put your case” and bring transparency to the parliament.

Although he does not canvass the foreign aid issue in his speech, Madigan told The Conversation he “most definitely” concurred with the Harradine position and would be willing to use any influence he had to pursue it. “I don’t believe taxpayers' money should be used to fund abortions in other countries”.

Abbott has been working hard to reassure Australian women he wouldn’t translate his strong personal views about abortion into any attempt to change the status quo. Despite this, a Galaxy poll in the Daily Telegraph at the weekend found nearly four in ten women were concerned about his views on the subject. Labor strategists will fan these doubts as much as they can; the possibility of Madigan being in a position where his vote counted could feed into their efforts.

A Senate tilting rightwards would be much better for a Coalition government than one totally controlled by Labor and the Greens. But negotiating with Madigan might throw up some testing moral challenges for Abbott if the former blacksmith from Ballarat turned up the heat.

“Modern Australia can have a great blue collar future”, Julia Gillard declared, launching her government’s policy on industry and innovation. The Prime Minister’s pitch is to firms and workers who are in the slower lanes of the multi-speed economy. It is an appeal to Labor’s traditional heartland, an attempt to win back and shore up the “battler” vote that is deserting to Tony Abbott, especially in Sydney’s west.

It also has more than a touch of the Obama approach – the president’s 2012 campaign success was partly based on appealing to blue collar workers.

Labor is selling its policy as the high road to improving Australia’s productivity; Gillard talked about blue collar jobs that were “highly skilled and highly paid”. It paints the Coalition, if elected, as set to tackle productivity via labour market changes that would hit workers' pay and conditions.

There’s a Robin Hood element about the policy, which essentially shifts government funding from the big end of town (cutting R&D tax concessions for up to 20 of the largest corporates, with annual Australian turnover of $20 billion plus) to help to small and medium-sized businesses.

Among those expected to be hit will be mining companies BHP and Rio Tinto, an irony given the row over the low returns from the mining tax they were instrumental in designing. It is impossible to predict whether measures such as the $350 million to stimulate private investment in innovative Australian start up companies will be money well spent, or whether squeezing the top companies could have some counter-productive consequences.

With the government trying to put pressure on the opposition over funding issues, it has made sure it has more than covered the cost of the policy with savings over the forward estimates. About $745 million is to be spent in the next four and a half years (some of the rest stretches over 14 years), while $1 billion plus is cut from the R&D concession. So during the budget period, the policy actually saves money. We don’t yet have a year-by-year breakdown.

The union movement’s hand is evident in the policy, released on the eve of the Australian Workers' Union’s national conference. In particular, unions have pressed for the government to assist Australian suppliers wanting a greater share of the work on large resource projects. This policy makes another gesture in that direction – there will be legislation requiring projects worth more than $500 million to implement plans to give local industry opportunities to win work on a commercial basis.

Fortunately, and sensibly, the policy steers clear of any mandating scheme. That, however, has brought a sharp attack from the Greens; their deputy leader Adam Bandt said that “big projects should be required to use local firms, not just talk to them."


Some aspects of the policy, including even the token measures for Australian suppliers, do have a mildly protectionist whiff, and there is a fondness for more bureaucracy, extending to requiring firms to set up new positions.

On the other hand, the proposed industry innovation precincts (up to 10), to better marry research and innovation with the commercial application, are worthwhile – although more than half the $500 million funding is previously announced money. Achieving enough commercial bang for the research buck has been a challenge for Australia and this is a fresh attempt to do that more effectively.

The precincts will create a “network of firms, research and higher education organisations”; half of them will concentrate on industries where Australia is already a world leader, to ensure it keeps its place; the others on “emerging opportunities with global potential”. One of the initial two will be a manufacturing precinct, located in Melbourne and Adelaide. The other will be a food precinct head-quartered in Melbourne; there is increasing recognition of the expanding opportunities for exporting food to the region.

Saul Eslake, chief economist with Bank of America Merrill Lynch Australia, sees the industry policy as the typical “curate’s egg”. He praises the measures aimed at improving the linkages between research and industry. But the attempt to push Australian companies into the mining investment projects might be too late, he says, with the mining investment boom passing its peak. And forcing companies to embed “Australian industry opportunity officers” in their global supply offices “sounds of dubious value”. As for changes to the anti-dumping regime, which the government says will “provide stronger protection for Australian industry against unfair competition from abroad”, Eslake says: “this seems designed to make it easier for companies to exclude competition at the expense of consumers”.

The industry policy will not live up to AWU chief Paul Howes' hype of being a “game changer for Australia’s manufacturing sector”. Rather it is a modest set of initiatives which the government hopes will send the message that manufacturing’s problems are on its radar.

Labor’s fall in today’s Nielsen poll will fan the leadership talk within caucus, and place enormous pressure on Julia Gillard. To put it bluntly, it’s just what the Rudd camp has been hoping for, because really bad polling is the only magic carpet on which the former prime minister could ride back into his old job.

The Nielsen poll, reported today in the Fairfax papers, shows the ALP primary vote down 5 points since December to 30 per cent. On a two party basis the Coalition leads by a huge 56-44 per cent if preferences are distributed according to how they went at the 2010 election.

Tony Abbott has risen by 9 points as preferred prime minister over the summer, while Gillard has fallen by 5 points. He leads her 49-45 per cent, the first time he has been ahead in many months.

The result shows once again that Labor is headed for an electoral disaster. It will overshadow Gillard’s $1 billion industry and innovation package, designed for the blue collar battlers.

While the full caucus won’t be back in Canberra until next month, the poll will be destabilising for the PM, who has not been able to take a trick since the political year began. It will remind many Labor MPs that they are out of kilter with the general public: more than six in ten would prefer Kevin Rudd as leader and a little over half the voters think Labor should change. People have warmed towards Rudd and change since September.

Meanwhile Rudd continues to parade his wares, despite yesterday flatly denying he has any ambition to ever return to the leadership.

In a long interview on Sky TV he again admitted to his past mistake on carbon pricing. “I made a great error of judgement in terms of the deferral of the emissions trading scheme,” he said. And, after last week shifting the blame to Treasurer Wayne Swan for the mining tax fiasco, he said: “The big debate over the mining tax, ultimately that was my call. I was the Prime Minister. Sure, other ministers, including the Treasurer, had central roles but it was ultimately my call.” A touch of humility is necessary.

But he would not say what should be done about the tax if Labor were re-elected. The Nielsen poll shows the tax, in its present form, has minimal support.

Rudd’s hefty broadsides against Abbott carried the implicit message that he would be Labor’s most effective weapon against the opposition leader. But, with some criticism in caucus ranks of his being so “out there”, Rudd has rescheduled an engagement he had Wednesday in Adelaide, where there is a federal community cabinet meeting. After the suggestion he was stalking the PM was splashed in the media, he said he did not want any controversy to detract from the important work she and the team would be doing there. Apparently the city is too small for both of them to be performing, albeit on separate stages.

If Kevin Rudd were to wrest the prime ministership back from Julia Gillard, this week might be seen as a tipping point.

After looking nearly dead at the start of the year, Rudd’s bid has revived on the back of the impression of government “chaos” that quickly took hold, following Gillard’s missteps and the coincidence of Craig Thomson’s arrest. “Chaos” was a beat up, but it was the perception which soon came through in the Coalition’s research.

The damage has been deepened by the revelation of just how badly the new mining tax has performed in its first six months, with figures showing it raised only $126 million from July to December, indicating it hasn’t the slightest hope of yielding the $2 billion that had been estimated for the whole of 2012-13.

In parliament, Gillard and Treasurer Wayne Swan were on the rack all week over the tax, the final shape of which was hammered out with mining giants, BHP Billiton, Rio Tinto and Xstrata immediately after the coup that deposed Rudd.

The miners, who had the new Gillard-Swan leadership team where they wanted them, extracted the best possible deal. Along the way, the government agreed to compensate them for any increase in state royalties; ever since, it has been trying to browbeat or cajole the states to stop such hikes.

The government blames a fall in commodity prices and the high dollar for the low collection, but the critics point to the political expediency which drove the tax’s design.

When Rudd chose to enter the debate on Tuesday, the critics got a big boost. He pointedly said he did not know the terms of the deal Swan and Gillard had reached. There was a further blow for the government in a Senate estimates hearing yesterday when Treasury secretary Martin Parkinson, quizzed on the forecasting error, pointed to what Treasury had not been able to see – notably the starting cost that firms were able to pick for depreciation – rather than blaming changes in commodity prices.

Rudd knew that by speaking out publicly, targeting Swan and Gillard for the difficulties in the mining tax and highlighting their deal with the companies, he was directly undermining the leadership.

While Rudd does not have the numbers in caucus, this week has seen more conversations about the state of play. People are observing Simon Crean, a year ago one of Rudd’s harshest critics. He was forced to insist nothing should be made of his dining with the former PM and his supporters on Wednesday. Just a get together for former attorney-general Robert McClelland, he said. (McClelland, dumped from the ministry by Gillard, retires at the election.) No doubt. But Crean was keeping interesting company.

Vital in what happens on the leadership will be Workplace Minister Bill Shorten, from the Victorian Right, and Minister for Mental Health and Ageing Mark Butler, from the Left. Shorten influences a cluster of votes and Butler a handful. Shorten was one of those behind the 2010 coup, and is now being watched with eagle eyes by colleagues. If these two moved, it would quickly have a domino effect. So far, they remain with Gillard.

In the Rudd camp, various scenarios are canvassed, and different timeframes, between mid March and late June (on Gillard’s calendar, the last sitting of this parliament). In reality the Rudd forces have little control over timing or process. Rudd has said he won’t challenge. It would send the wrong message to the public – already cynical about untrustworthy politicians – to go back on that pledge. If she holds her nerve this gives PM a strong advantage.

Rudd has to rely on bad polls coming and caucus members eventually panicking. His supporters must be careful in counting and canvassing; they also know, from experience last year, that promises of support can fall away at crunch time.

Rudd himself is a wild card. While some backers want him to take a lower profile, he is no mood to do so. He has the demeanour of the king in exile, bent on recapturing the throne. As a former Prime Minister, he has no intention of being silenced. Then there is the adrenaline. A danger is that all this could alienate rather than attract those colleagues who need to be won over.

Gillard’s toughness is legendary. She doesn’t flinch under enormous pressure. No one believes she would stand aside. And she is tactically canny and ruthless – a year ago the Gillard forces pushed Rudd into a premature challenge to rout him.

Labor MPs with seats at risk are living a double nightmare: the fear of political demise combined with trying to decide the best shot for saving some of their skins. They are alarmed by the electoral feedback on Gillard. The polling is turning down again; Essential this week saw her approval falling from 41 per cent in January to 36 per cent this month. They are holding their breath for the coming round of Nielsen and Newspoll.

Yet many of them hate Rudd, can’t bear the thought of what they would have to go through to install him, and don’t know what would happen if they did.

A restored Rudd would give Labor a sugar hit in the electorate, but how long would it last? His best hope probably would be to get the leadership in June and go to the people quickly (not that this worked too well for Gillard). There’d be the drag of internal schisms (with possible leaks like those from his camp in 2010). He’d have to cope with the NSW corruption inquiry stench – by casting himself as committed to reforming Labor.

Rudd’s best pitch, however, could go along these lines: “You know me – you’ve seen me in government. I was the guy who guided us through the global financial crisis (and I really have learnt lessons from those things we messed up along the way, like pink batts). You don’t know Tony Abbott. He’s scary. He’d be dangerous on the economy; can’t be believed even if he has a mild industrial relations policy; is unconvincing when he claims to have modern attitudes on women. Don’t risk the unknown. I’m Kevin. And by the way, if you’re in a Queensland marginal seat, remember I’m from Brissie.”

It might not win an election but it would be a narrative.

Kevin Rudd has elevated the temperature surrounding Labor’s leadership by buying into the row over the government’s controversial mining tax.

With Julia Gillard and Wayne Swan under attack about the failure of the tax to yield any significant revenue, Rudd sheeted home the blame for the whole fiasco to them.

The tax, it must be remembered, helped destroy his leadership, when the mining industry ran a massive campaign against the original version. He is highly passionate about the whole episode.

Rudd told Sky News the origin of the tax came from the Henry Review, established by the Treasurer, and Swan had “brought it to the relevant ministers… including then Deputy Prime Minister [Gillard] and myself.” They had supported the Treasurer’s decision to go forward with his proposal.

“Of course after the government’s leadership change, the Treasurer and the new Prime Minister elected to make some significant changes to the structure of the tax,” Rudd said.

He said – pointedly – that he was “unfamiliar” with what undertakings the pair had provided to the mining industry at the time. Quizzed on whether Gillard and Swan had given away too much to the miners – the tax was much watered down – Rudd said “history will be the judge of that.”

Any future changes were a matter for Gillard and Swan he said, while defending a robust tax.

Asked whether the government should be afraid of taking on the miners again, Rudd declared: “No government should ever take a backwards step in pursuit of the national interest.”

In Parliament the mining tax was again the issue of the day, with the government saying it would not alter it, beyond its current negotiations with the states to try to fix the loophole which forces Canberra to reimburse companies when state governments put up royalties.

The PM slipped up during question time, when she wrongly attributed comments to businessman Don Argus’s review (rather than to an another review), and was forced to clarify. For her critics, it’s just another example of how accident-prone she is in these first weeks of election year.

Rudd told Sky the government could win the election and “could win under the Prime Minister’s leadership”, and later Rudd forces hosed down the politics of the interview, saying that it had been done to mark the anniversary of the national apology and the mining tax had only been a part of it. Indeed Rudd’s provocative public intervention came as a surprise to some of his backers. But he was happy enough to expound on his views about the mining tax when he left the ABC office in the press gallery after doing another interview.

Around caucus, the Sky appearance was seen as Rudd again stepping up the pressure on Gillard, and Labor sources said the atmosphere in ALP ranks is presently less stable than earlier this year.

2013 started with a general consensus that the Rudd leadership push had faded. But a series of mistakes and events has changed the dynamics and thrown more doubt over Gillard’s position.

Julie Bishop, Deputy Leader of the Opposition, who is personally close to Rudd, pointed Coalition MPs' attention to the next parliamentary sitting week after this one. “Circle the ides of March in your diary, where chaos, history, a full moon and pandemonium will coincide,” she said.

As each week passes, time runs out for Kevin Rudd, and there is less certainty about how his play will end.

In a notable bookending, the mining tax that helped destroy Kevin Rudd’s leadership late last term is causing Julia Gillard serious budgetary and political problems as she heads towards the election.

For Treasurer Wayne Swan, the tax has brought one disaster after another. Rudd bitterly blamed Swan for the vicious reaction to the original tax from the mining sector, because there was not enough consultation beforehand.

The opposition has targeted Swan after figures last week revealed the tax had raised only $126 million in its first two quarters when it should have brought in $1billion. Low commodity prices and the high dollar account for much or most of the shortfall – government and opposition dispute the proportion – but the design of the tax is also seen as a cause.

The Coalition argues the tax should be scrapped altogether, while other critics say that it should be revised to make it effective.

It’s going to be a rough sitting week for the Treasurer; Tony Abbott opened question time yesterday by demanding to know whether the Prime Minister still had confidence in him.

The mining tax flop is putting extra strain on the already tough task – with the general revenue outlook bleak – of seeking savings to pay for the National Disability Insurance Scheme and the Gonski education reforms. This tax was supposed to finance various other measures, including the enhanced superannuation guarantee, which will have to be paid for by other means. Workplace Relations Minister Bill Shorten was vague and dismissive when pressed on the ABC yesterday about the money challenge.

There has been previous speculation that in its search for savings the government might again trim some so-called ‘'middle class welfare’‘, and also put a squeeze on the superannuation breaks which benefit higher income earners. In response to the talk about super, it has ruled out changing the tax exemption that over 60s get on payouts, but the favourable tax treatment when people invest in super has not been quarantined.

The government is in a bind. It is looking to the NDIS and Gonski to be vote magnets. But if it has to hit middle class welfare or super breaks to help pay for them, it risks losing votes.

It’s true that the Labor heartland would not be directly hurt by such measures. But Labor also has to think of its aspirational supporters in those many marginal seats. These people don’t necessarily need to be personally left worse off by changes – they may simply know people who are, or worry that they might find themselves affected in the future.

Fears about such a backlash came though in comments last week by government whip Joel Fitzgibbon (who, incidentally, is in a heartland Labor seat). ‘'On super, we do need to be very careful’‘, he told Fairfax Media. ’‘Aspirational Australia is sick and tired of … constant changes to superannuation and the uncertainty that brings. We need to be rewarding people for their efforts of the past. At the same time, there are some inequities and inconsistencies in the system that need to be sorted out. It’s a very difficult balance for the government.’'

Fitzgibbon, a Rudd supporter, went on: ‘'If there is a story saying Fitzgibbon said that those who worked hard in the past to get to where they want to be in life should be protected, then I’ll be happy with that story. We’ve got to make sure that there is an incentive to work. Hard work brings reward at the end. That is what aspirational Australia is about and that’s what we should be promoting.’‘ Seeing a potential advantage, Tony Abbott recently promised that a Coalition government would not bring in any unannounced adverse changes during its first term.

The Labor government has already eaten away at middle class welfare and breaks over several years – through changes to eligibility for family benefits, the baby bonus and the private health insurance rebate, as well as some winding back on super. In terms of policy these can be strongly defended. And there is a case for more action. But taking it in a budget four months from an election would be bold – and there will be quite a few Labor troops hoping that political discretion will be put ahead of valour, or even the budget bottom line, by the government’s cost cutters.

May I start my introductory column for The Conversation with one not-so-bold prediction. This hung federal parliament – just the second in a century – is likely to be the last one we’ll see for a very long time.

With some notable exceptions, the Australian people usually speak fairly clearly at federal elections. Even when they don’t, the electoral system tends to produce a decisive result. It’s unlikely to be different on September 14.

What will be distinctive about this election is that the date is known so many months out. Of course, in a parliament where the unexpected is the expected, that could change – for instance, if Kevin Rudd were to achieve the Herculean challenge of seizing the leadership.

But on present settings, election year already has its structure and, notwithstanding Julia Gillard’s optimistic declaration that this was not the start of the campaign, everyone is on the hustings.

The hung parliament has been a paradox. On the one hand a lot of policy work has been done or at least started. The price on carbon, operating now for more than half a year, is an historic reform, of the magnitude of John Howard’s introduction of the GST – though whether it survives as the GST did is another matter. There is a mining tax on super profits, albeit not raising much revenue.

A beginning has been made on a National Disability Insurance Scheme; some rate such a scheme, when it is operating, as a reform that will be comparable to Medicare. The government is moving to get a new funding system for schools in place, along the lines of the Gonski recommendations.

Yet in the public mind this parliament has been largely defined by noise and nastiness, to an extent that many people just want to close their ears until it is over. The closeness of the numbers, the feeling that there could be a sudden election, a certain desperation on both sides, have soured debate.

This parliament has given crossbenchers in the House of Representatives the sort of power usually only accorded to crossbench senators. It is a matter of argument whether that is the system at its most democratic or its most dysfunctional.

How much of the bitterness of the past two years flows into the election campaign remains to be seen. But regardless of tone, one thing is clear: this campaign will be policy heavy. There will be big issues at stake, both economic and social.

Most obvious is whether carbon pricing continues. Tony Abbott has promised he would, if necessary, go to a double dissolution to secure its end. If he ever welshed on his pledge to repeal the carbon tax, it would be the doozy of all broken promises. Abbott has also undertaken to repeal the mining tax. The Coalition doesn’t support the Gonski education changes. Economic management, border protection, industrial relations and broadband will all be centres of policy contention. (At least the NDIS has bipartisan support.)

In recent times there have been calls for greater media focus on these policy issues and less on the political contest. But it’s not a case of just doing one or the other. In my writing for The Conversation, I will of course be concerned with the “horse race” aspect of the contest. After all, the “horses” carry the policies – who is first past the post will determine the shape of the future. As Paul Keating said, “when the government changes, the country changes.”

But at The Conversation, which draws on the talents of academic experts all over the country, we are also especially looking at the politics of the next few months through the prism of policy, and my writing will have an emphasis on that as well.

The Conversation generally will be asking tough questions on policy and how the parties measure up. I hope to receive feedback from readers on policy questions of interest.

As well as being chief political correspondent for The Conversation I will be a professorial fellow at the University of Canberra. One of the projects the university is considering is a bird’s-eye study of the bellwether seat of Eden-Monaro which we would report on through The Conversation.

The Conversation is increasing its real time political coverage just when the diversity of political reporting is contracting in the mainstream media. Economic pressures are partly but not entirely to blame.

But the result is clear. The increasing tendency in recent years is to have one reporter write news on a subject across a number of mastheads.

I believe that it is as important to have multiple voices reporting news as it is to have many voices in commentary. On occasion what is “fact” and the weight that should be given to particular pieces of information in a story can be as disputed as opinions based on the facts. And the more competition there is in the searching out of facts, the more the community will know. My writing for The Conversation will also include news.

I reckon this is going to be a fantastic year for following and reporting politics. We should not be cynical or put off by the less attractive aspects. We have a robust democracy, even if aspects of it can try the patience sometimes. Technology has enabled those in the media, old and new, and their readers to have a degree of interaction that could not have been dreamed of a couple of decades ago.

Let us indeed help to make 2013 a year of meaningful conversation.