The fate of the Gillard government lies in the resolution of the asylum seeker issue. Nothing less will do. Julia Gillard must act decisively if she is to have the slimmest chance of retaining government.
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But there is more at stake than that. Gillard needs to combine humility, statesmanship and clever politics. It will not be easy but every avenue must be explored. She needs a victory with a moral dimension of some sort.
When she took office two years ago Gillard pledged to attend to three issues: carbon taxation, mining taxation and refugees and asylum seekers. She has achieved some resolution of the first two but no progress on the third.
The government hopes that the introduction of the two new taxes will revive their fortunes by demonstrating that Tony Abbott's wilder claims are misconceived. Evidence suggests that there is only a faint likelihood that this will be the case. The government's position rests on the dollar impact of the taxes. It hopes that voters will realise that any negative net impact on their finances has been greatly exaggerated when compensation is included.
There are several problems with this scenario. The government is counting on voter recognition and gratitude that the earth has not fallen in. Yet voters were not grateful for the government's response to the GFC so why should they be particularly grateful now.
Voters are also distracted by the international economic crisis, as it is manifested in Europe especially. Furthermore, calculating the net impact of what any government does in a world where prices for products like electricity are set by large corporations, state governments and international trends outside the government's control is an extremely difficult and inexact science.
The government's hopes also misread the community's problem with the taxes. Greater than any worry about the economic impacts are the loss of trust in the government over broken election promises and subsequent maladministration.
Finally, the hopes of the government that things will settle down ignore the efforts of the opposition to ensure that does not happen. There is also the related court case by Fortescue Metals against the mining tax that makes sure uncertainty flourishes.
All of this is not to say that in the medium term there may not be some benefit to the government from these policies finally coming on stream. But they will be of marginal impact rather than a big breakthrough.
That is why refugees and asylum seeker policy is the big one that Gillard must confront.
The recent tragedy has shaken the nation once again and some parliamentarians have expressed a willingness to think beyond the square. Independent Rob Oakeshott has even suggested that Parliament should keep sitting until it has arrived at a solution.
Gillard has called once again for bipartisanship, offering generous new concessions, but Abbott has again rejected her call. She now has to go further even at huge risk to her personal reputation. More of the same will not do. However the challenge is enormous because of both political and policy factors which make a positive outcome hard to envisage.
The government does not control the Senate and neither the opposition nor the Greens will countenance passing the government's preferred policy, the offshore Malaysian solution. The opposition wants to re-open the Nauru processing centre, while the Greens want onshore processing.
Each of the three parties is convinced that only their solution will succeed in solving the problem, if that means stopping the boats in a humane fashion. They all believe the alternatives have either already been proved to be ineffective and inhumane or will be so proved if allowed to proceed.
Each party has also invested so much political capital in selling their proposed alternative that to back down would be seen to be caving in.
Gillard should demonstrate strength by conceding even more. But some hard facts must be put on the table first. A revolutionary consensus led by party backbenchers emerging on the floor of the Parliament is unprecedented. Therefore Gillard must deal with either the opposition or the Greens.
Political time is passing inexorably. In the absence of a deal, nothing will happen until the October 2013 federal election when the government will be defeated and the new prime minister, Abbott, will be able to introduce his Nauru solution. That solution will be rejected by the Senate unless it is supported by the Labor opposition. If it is rejected Abbott can either wait until July 2014 if he controls the new Senate or engineer a double dissolution election to try to gain control. If he still can't win control of the Senate, then in three years the parliamentary situation will be deadlocked just like the present one.
Gillard must act now. Nothing could be worse than the continuing deaths at sea. She should go to the Greens first and try to deal. If that fails as it probably would she should go to the opposition.
She should then announce personally to the Australian people that, in the absence of any other possible way forward, she has decided to accept the opposition's Nauru solution, which she will trial until the next election.
Gillard would be pilloried within her own party for backing down. She would attract public criticism that she had turned away from her own principles. Neither the opposition nor the Greens would give her any credit. But she still would have been the one to take the necessary initiative. She would have given it a go. Win or lose she would have broken the deadlock. That is what most Australians want done.
John Warhurst is an emeritus professor of political science at the Australian National University.
John.Warhurst@anu.edu.au