View from The Hill

Shorten’s challenges: positioning himself on key economic issues and loosening union constraints

Bill Shorten should establish his identity as opposition leader early on. Lukas Coch/AAP

Bill Shorten’s blaming of the Abbott government for the death of the car industry and condemning the royal commission into union corruption were entirely predictable positions.

But they also highlight the major challenges ahead of the opposition leader – positioning himself on key economic issues and loosening the constraints imposed by his union past.

It’s easy politics for Shorten to target the government over the exit of Holden and Toyota. Losing this particular industry and the high cost in jobs make it a hot button issue. And advocating more government assistance fits into Labor’s tradition.

At least, into one strand of that tradition. In the Hawke-Keating period, Labor established another tradition, when it promoted extensive change in the economy, including dismantling protection.

Later, Labor for a while turned its back on those years but then re-embraced them.

Shorten has to ask himself: does he want to stand for economic reform, as Hawke and Keating did?

Doing that is harder than putting “oppositionist” politics first and foremost (in the mould of Kim Beazley and, of course, Tony Abbott). It would be especially tricky given that the interventionist approach has strong followers in Labor.

But if Shorten’s aim is to cut a credible figure in the years ahead, he will have to look to the economics. And, as Paul Keating puts it, “good policy is good politics”.

Interestingly, on the issue at hand, voters don’t necessarily default to giving more aid to the auto industry. This week’s Essential poll showed more people against than in favour of production subsidies for motor vehicle manufacturing – 47% to 36% (Labor voters were more likely than Coalition voters to approve support – 45% to 32%).

Shorten in parliament on Tuesday resorted to the line that “this North Sydney-based government does not understand manufacturing in the southern states of Australia. They have never seen a Victorian or South Australian job they would ever fight for other than their own marginal seat MPs.” It sounded like a twist on the so-called “class” swipes made in the Gillard-Swan time.

But it is a simplistic attack, which doesn’t do justice to Shorten’s own economic knowledge. Shorten’s attention should be on the creation of a forward looking industry policy, because the end of the auto sector will be a fait accompli (production is due to finish in 2017) by the time of the next Labor government.

Even more difficult and important is how Shorten deals with the union connection.

Aware that Labor had to put up an alternative to the royal commission, he proposed a police taskforce. It was clear however that, despite the government’s political motives for the royal commission, Labor’s arguments against it (lack of criminal charges out of the previous Cole commission; the high cost) sounded weak.

Shorten has robustly condemned corruption in unions but his opposition to a royal commission undermined the strength of what he was saying.

The commission holds dangers for Labor because of its institutional and financial links to the unions; the union backgrounds of so many leading parliamentary figures, including Shorten; and the current personal networks.

Shorten now should be seen to take the line of letting the cards fall where they will in the investigations ahead.

More generally, cementing himself in as an alternative prime minister requires drawing a boundary line between himself and the unions – no small task but one better tackled early in his leadership.

Kevin Rudd had little time for the unions and paid a price; Julia Gillard was too beholden to them, and that had a cost too. Shorten is of the union movement, and so will try to use it. But it will try to use him too and there lies the risk for him.

Tuesday’s Newspoll found that after a solidly increasing satisfaction rating last year (as people took their first look at him as opposition leader), Shorten had gone backwards, with a fall from 44% in December to 35% (Abbott was stable on 40%). Labor’s vote had fallen but on a two party basis the ALP was ahead of the Coalition 51-49%. In the Essential poll, also released on Tuesday, Shorten’s approval was down 5 points to 30% from mid January (Abbott’s approval fell 6 points to 41%).

Although it is the start of the term, the coming months will be crucial for Shorten. It’s not just the voters who will be getting a handle on him in his new role - his party will be too. In areas such as Labor’s economic approach and its stance vis-a-vis the unions, this is the best time for Shorten to set his tone and establish his authority.

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