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Hanging by a thread

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Peter Hartcher, Phillip Coorey

The sound and fury of budget week highlight the desperation in Julia Gillard's prime ministership.

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No opinion poll bounce for Labor

The first major poll published since the budget has done nothing for the standing of Labor and Prime Minister Julia Gillard.

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If the Australian economy were a racehorse, it'd be Black Caviar, streaking ahead of the field and feted around the world as a star performer. But the jockey riding it gets no credit, is booed at every appearance and rated one of the worst riders ever to take to the track.

There is no major country in the world where the disjuncture between the economic realities of a nation and the political standing of its government is so stark, according to a well-known international economist, Chicago's David Hale.

''It's very intriguing,'' says Hale, who tracks the politics and economics of dozens of countries from Argentina to Zimbabwe and has been a regular visitor to Australia for three decades.

<em>Illustration: Simon Letch</em>

Illustration: Simon Letch

''Australia is an outlier - it gets an A for its economic performance, where most of the industrialised countries get a C or a D - yet it has the same anti-incumbent mood as countries with recessions and serious problems of unemployment. Why can't the government get any credit?''

Julia Gillard is outwardly calm but confided to feeling the intense pressure of a failing prime ministership in addressing the Labor party room this week: ''Just because I don't sweat, crack or sob doesn't mean I don't understand the pressures.'' She promised her colleagues that she would go on to ''conquer'' her enemies, but Labor confidence is at rock bottom.

Perhaps the best outward indicator of creeping desperation at the top of the government was its decision in this week's budget to spend an extra $5 billion on payments to lower and middle-income families. A move like this is familiar in an election year, but unorthodox in the middle of the electoral cycle, and especially when the government is straining to deliver a surplus.

Julia Gillard ... understands the pressures.

Julia Gillard ... understands the pressures. Photo: Penny Bradfield

The juxtaposition of economic strength and political weakness was on display this week when the government brought down a budget that promised increased family handouts plus a surplus, closely followed by the news that the unemployment rate had fallen to 4.9 per cent.

Yet in contrast to this A rating on the economy, today's Herald Nielsen poll shows that voter support for the government is a D grade. Labor is polling a grim 28 per cent of the primary vote. Compare this to the standing of the governments in a couple of recession-racked countries. In Britain, where the economy has just relapsed into recession and the jobless rate is more than 8 per cent, the David Cameron-led coalition government is polling 33 per cent - five points higher than the Gillard government.

In the economic ruins of Spain, where unemployment is a staggering 23 per cent and half of young people cannot find work, the ruling Popular Party has polled support of 40 per cent, or 12 per cent better than the Gillard government.

Why, indeed, can't the government get credit? One reason was in evidence this week in the media coverage. The biggest story of the week, by far, was the budget, as always in a budget week. But look at the next three top-ranked stories across print, TV, radio and internet news, as measured by Sentia Media, formerly Media Monitors: the number two story was the Craig Thomson scandal; number three was the carbon tax; and number four was the Peter Slipper scandal. These are all running sores for the government, and all self-inflicted. Sure, Slipper was put into Parliament as a Liberal, but he became a problem for Labor when Gillard chose to make him the Speaker.

Even when the government has some positive news to announce, it has to struggle against its own bad press. But it's more than just a problem of achieving the Holy Grail of political news management, the hallowed ''cut-through''.

Even when the government trumpets news of a budget surplus, it is undercut by the Prime Minister's trust deficit. Gillard's approval rate is at minus 25 per cent in today's poll.

Tony Abbott is not a popular leader either, but his rating of minus eight almost looks good by comparison.

Is the government about to fall over the Thomson scandal? There is a crescendo of expectation that its grasp on the numbers on the floor of Parliament is about to slip. This is the tone of much breathless coverage and commentary. Deeper analysis shows this to be unlikely.

Those on whose support the government rests - independents Rob Oakeshott, Tony Windsor and Andrew Wilkie, and the Greens Adam Bandt - have no interest in bringing down the government because that would terminate their own relevance.

Any of these crossbenchers who survive the next election will find themselves most likely sitting among a majority of Coalition MPs, meaning their votes, opinions and electorates will no longer matter.

At the same time, they are uncomfortable with the nature of the Fair Work Australia findings against Thomson and need to respond to public opinion.

As Oakeshott told the Herald this week, he needed to balance his concern for the integrity of Parliament against his belief Parliament should not act as judge, jury and executioner on what were still essentially allegations.

On Tuesday, Oakeshott, Windsor and Bandt sided with the government to stop the opposition suspending the business of Parliament to bring on a motion to expel Thomson from Parliament for 14 days.

But the next day, Oakeshott was worried about the public backlash which resulted from being seen to protect the government and Thomson at all costs. He let it be known that he was prepared to support a Coalition motion to at least allow debate on whether to suspend Thomson, or take some other action, such as a censure, to send a message that he regarded the Thomson allegations seriously.

A crisis was averted when the independents met Thomson before question time and he told them he was prepared to make a statement to Parliament when it resumed the week after next.

The independents will reserve their judgment until then, but even if unhappy with Thomson's explanation, they will not bring down the government.

They may support a censure of Thomson, which is symbolic but meaningless, or even a suspension from the House for 14 days.

Should the latter occur, the government would be down a critical number. Tony Abbott would be tempted to bring on a no-confidence motion but the independents would not necessarily support this.

At worst, the government would be embarrassed and possibly be unable to pass legislation for a fortnight.

Significantly, Bob Katter, who it was broadly assumed would back the Coalition in the pursuit of Thomson, said he would have no part of it. Twice this week he abstained rather than support opposition motions, helping to ensure their defeat.

Katter said he is motivated by the principle that the courts, not the Parliament, are the forum for judgment.

Yesterday Windsor backed him, saying neither Thomson nor Peter Slipper had been charged with an illegal act and Parliament should not be asked to become the judiciary.

And Katter, a former Queensland National, believes the Coalition is being hypocritical for fulminating about Thomson's alleged misdeeds in a former life when it turned a blind eye to the alleged indiscretions of Slipper for over a decade when he was a Coalition member. ''There's no qualitative difference in the actions of the Liberal Party and the Labor Party here,'' he said.

The upshot of this is that it is highly unlikely there will ever be the numbers to suspend Thomson from the Parliament, either temporarily or indefinitely. Because to make such a motion enforceable, it would need an absolute majority of 76 votes.

Assuming Thomson would vote with Labor, the Coalition would need four of the five - Windsor, Katter, Oakeshott, Wilkie and Bandt - and it won't get Katter or Windsor.

Without a swift end to the Gillard government in sight, it has girded to fight the Abbott opposition in a longer trench war on the populist issue of wealth disparity and class.

Where the opposition has specialised in the use of fear as a political tactic - stoking fear of the carbon tax, in particular - the government is going hard in fuelling community resentment.

Wayne Swan's attack on three conspicuous mining billionaires represented a new assault, and the Prime Minister used the budget to intensify the attack.

The trademark decision was to scrap the promised company tax cuts, which were to be funded by the mining tax, and instead use the revenue for two separate cost-of living measures, worth a combined $2.9 billion.

The business community was angry but the government did not care because it received no support for the tax cuts or the way they would be funded, and no third-party pressure was exerted on the opposition to pass them.

''All they did was whinge the [1 percentage point] cut was too small and then they whinged when we dumped it,'' one adviser said.

Oddly, Abbott opposed the company tax cuts because they would be funded by the mining tax, but then said he would support the two new welfare measures, even though they, too, would be funded by the mining tax.

Because the Coalition is promising to scrap the mining tax, keeping the welfare payments would blow another $2.9 billion hole in its election costings.

Yesterday, Abbott started backing away, indicating the Coalition would not keep the measures - a $1.1 billion supplementary allowance to provide annual cash payments to welfare recipients, and a $1.8 billion boost to Family Tax Benefit A.

''If you don't have the [carbon] tax, you don't need the compensation. Now, this is effectively carbon tax compensation,'' he said.

Already, the Coalition opposed but failed to block the passage of the budget's third cost-of-living measure, the schoolkids bonus, which would pay low and middle-income families $420 a year for each primary school child and $820 for each high school child.

It was opposition to this, and Abbott's claim that parents would blow it on the pokies, that prompted Gillard's class war rhetoric.

''Mr Abbott's got to get off Sydney's north shore and go and talk to some real families and get himself in the real world,'' she said.

The budget blindsided the opposition. It was confused over the mining tax elements and the schoolkids bonus. Abbott was snookered on Wednesday when he complained the schoolkids bonus was poor policy because there was no requirement it be spent on school expenses. When asked to explain the difference between the Howard government's baby bonus, which was a cash payment with no requirement it be spent on baby needs, Abbott could not.

''They just are,'' he stammered when pressed on why the two were different.

The opposition's response to the budget confirmed that it lacks a coherent budget policy of its own. Abbott said that the opposition would restore growth to the economy, cheerfully ignoring the fact that Australia's is one of the strongest growth economies in the developed world. Black Caviar is running strongly even as the political leaders use their whips on each other in the relentless jockeying for position.

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