Julia Gillard is unlikely to get much time to celebrate becoming Australia’s first female Prime Minister – with an election just around the corner, Gillard has a host of burning issues on which she needs to take clear positions.
Arresting the Labor Party’s terrible opinion poll performances will not be easy, and while Gillard is likely to enjoy a significant honeymoon period after winning the top job, the business community will be looking for clarity on issues such as the Resources Super Profits Tax, the emissions trading scheme and tax reform.
Here are 10 issues that Gillard will need to deal with in the coming weeks:
The Resources Super Profits Tax
Regardless of your position on the RSPT itself, the Government’s handling of this issue has been appalling. Announcing the tax without consultation with the resources industry has led to a fight that has been as distracting as it has been divisive. The site of billionaires protesting in the street was unquestionably ridiculous, but it highlights the urgency of this issue for Gillard. Will the Government be prepared to make big compromises to get a quick deal? Will Gillard set a deadline by which negotiations between the Government and the industry will be completed?
Tax reform
If Gillard decides not to proceed with the RSPT, how will this affect the Government’s other tax reform plans? Specifically business will want to know if the planned cuts in the company tax rate from 30% to 28% and the plan to increase the superannuation guarantee from 9% to 12% will go ahead.
Modern awards
The new national Modern Awards were the centrepiece of Gillard’s Fair Work industrial relations regime, which hasn’t exactly been welcomed by employers around the country. With many of the awards due to come in on July 1, and many employers still unhappy with the awards regime – particularly those in big employing sectors such as retail and pharmacy – Gillard could face a test very early in her leadership. If the awards roll-out creates problems, IR could actually become a real problem for Gillard.
Union power
Perceptions that the shock dumping of Rudd has been driven by the Australian Workers Union and the Right faction of the Labor party could hurt Gillard. The Coalition – and perhaps plenty of voters – will rightly be asking who is running the Government: the factions or Cabinet? Gillard may need to distance herself from the unions very quickly, although her IR background might make this tough.
The economy
Gillard inherits an economy that has performed extraordinarily well in the last few years, and appears poised to enter another very strong period. But there are dark clouds on the horizon that Gillard will need to watch very closely, particularly Europe’s continuing debt crisis, the possibility that the US may slip back into recession and the potential for China to put the brakes on its growth. There’s not much Gillard can actually do about these outside influences, other than to realise that if something does go wrong in the global economy Australia will be hit.
Emissions trading scheme
It appears one of the key issues that cost Kevin Rudd his job was the emissions trading scheme. But while many Labor supporters were angry with Rudd’s decision to postpone the introduction of the scheme, significant sections of the party – particularly the Right faction which unseated Rudd – don’t want the scheme to go ahead at all. It’s another issue where there is too much uncertainty, and Gillard needs to act.
Asylum seekers
This is another key issue that apparently brought Rudd down. Clearly many in the ALP believe that Rudd has taken too harsh a stance on asylum seekers, and Gillard will need to address this quickly one way or the other.
The Cabinet
We know Wayne Swan is Deputy Prime Minster and is likely to retain the Treasurer’s portfolio, but it remains to be seen whether there will be much of a shake-up in terms of Gillard’s ministerial line-up. For the small business community, it will be particularly interesting to see if Craig Emerson retains his job as small business minister – he was Rudd’s most prominent supporter in the hours before Rudd stood aside.
The school building program
Some sections of the media – notably The Australian – have attacked Gillard and the Government over the handling of the Building the Education Revolution program. The program was part of the Government’s stimulus package, and was designed to provide for the building of billions of dollars worth of school buildings. But allegations of widespread rorts and cost blow-outs have tarnished the Government in recent months, and could continue to be a problem for Gillard.
Election timing
The big question is when Gillard will go to an election. Does she take advantage of her honeymoon period and go in the next few months, or does she wait until she has built a solid platform for the election and call an election as late as next year?
It’s all likely to depend on how Gillard handles the issues above in the next few weeks.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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