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Grattan on Friday: Bill Shorten’s purgatory puts Labor into limbo

Opposition leader Bill Shorten was forced to ask for his testimony to the royal commission on union corruption to be brought forward in the wake of media stories about union deals. AAP/Mick Tsikas

Bill Shorten’s July 8 appearance before the royal commission into union corruption is crucial for his credibility and has major implications for his leadership.

Shorten needs to lay absolutely to rest any suggestion that in his previous life as Australian Workers Union (AWU) chief he put the union’s interests ahead of those of the workers.

But the very fact Shorten is before the inquiry will be a negative in some voters’ minds, making it a no-win situation for him. The question is whether the damage will be light or disastrous.

Shorten was forced to ask for his testimony to be brought forward in the wake of media stories about union deals.

In particular, Fairfax Media reported the AWU was paid almost A$300,000 after he struck an agreement with Thiess John Holland for the $2.5 billion EastLink road project in Melbourne that cut conditions and gave the company big savings.

But it should be noted that Tony Shepherd, then-chairman of Connect East that subcontracted Thiess John Holland and latterly head of the Abbott government’s commission of audit, has strongly defended Shorten, saying the deal was good for employers and workers at a time when “construction was appalling”.

This parliamentary session’s penultimate week has been all downside for Shorten. Only months ago Tony Abbott was in deep trouble. Now Shorten finds himself tangled in a net of his own history as well as current issues.

Tuesday brought a Newspoll showing the opposition leading but Shorten’s ratings poor, plus a damaging episode of The Killing Season reprising Labor divisions. On Wednesday-Thursday came the Thiess and other union tales. All fodder for the government. By Thursday, the Sydney Morning Herald was claiming in an editorial: “The position of Bill Shorten as federal Labor leader is becoming untenable”.

Shorten is on the defensive to a much greater degree than at any time since becoming leader.

The bad week came despite Labor having ammunition against the government – the schmozzle over the as yet unseen legislation to strip citizenship from dual nationals associated with terrorism, and Abbott’s refusal to say whether Australia paid $US30,000 to the crew of a people smuggling boat.

But with his confidence high, Abbott has become increasingly brazen. He’s ready and able to run over an opposition that fears and falters, and even to display a touch of Ruddism towards his ministers. The citizenship bill, when finalised, won’t go back to cabinet, despite (or perhaps because of) its sensitivity.

Abbott accused Labor of wanting to “roll out the red carpet” for returning terrorists, as the opposition got caught between Shorten’s earlier “in principle” support for the move on dual nationals and Labor’s increasing concern about the revocation power being vested in ministerial hands.

After the citizenship bill is released next week, we’ll get an idea of whether Abbott has succeeded in forcing Labor to break its bipartisanship on national security.

We may not know definitely, because the bill will go to the parliamentary committee that has been able to devise compromises on earlier legislation. Will Abbott, who has his blood up, want a divided report or the usual consensus that comes from that committee?

The opposition had legitimate questions over the allegation the government paid the six-member crew of a people smuggling boat $US5000 each to take the passengers back to Indonesia. But after its initial attack, Labor appeared spooked when it became clear that under the ALP government payments were made for information about people smuggling and disruption activities.

If Shorten had greater authority and Labor more confidence, the opposition would not have hesitated. Paying for disruption activities and information is different in kind from giving out a big sum to the smugglers after a boat is intercepted. And also the Indonesians, who have been apparently untroubled by “disruption” payments, were loudly demanding answers on the boat incident.

On a completely different front, Shorten copped fire when Labor announced it would oppose the legislation for the government’s tougher assets test on pensions, which will save $2.4 billion over the forward estimates. The opposition then quickly became irrelevant when the Greens did a deal with the persuasive Scott Morrison.

In terms of policy, Labor’s position is flawed. Yes, there are losers up the income scale in the Morrison model, but there are winners down the scale. And when savings need to be made, it is reasonable that the well-off don’t get the pension, or get less of it.

Whether Labor’s stand on pensions is a political miscalculation is less clear. The government can portray it as the ALP standing up for the non-needy. But Labor is making a direct pitch at those in the pre-pension age bracket. Shorten said some 700,000 in their 50s and early 60s would be hit. Once the change is legislated, however, Shorten can’t argue he’d reverse it – he’d have a fight over fiscal irresponsibility on his hands.

Between now and July 8, Shorten will be living in political purgatory, which will impose a discount on the effectiveness of everything he does.

Worse for him, the inquisition is expected to stretch out. The commission said that because he had asked to appear early it will not be possible for everything to be done in one sitting. Anyone affected by his evidence will be able to seek to cross-examine him later.

And then there will be the wait for the findings.

For Labor, there is a nightmare of uncertainty ahead.

Listen to the latest Politics with Michelle Grattan podcast, with guest, Greens Senator Sarah Hanson-Young, here or on iTunes.

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