Labor’s pain is just starting

And so it all went pretty much as expected. Prime Minister Julia Gillard emerged from the Labor leadership ballot this morning with a emphatic win, 71 votes to 31.

Kevin Rudd’s brazen challenge was too short. After “officially” nominating himself as a challenger only on Friday, Rudd was unable to get the numbers he needed quickly enough.

While much of the next week will be taken up with Labor heavyweights claiming the party can put the mess behind it, get a fresh start, draw a line in the sand and unify around the key ALP task of defeating the Liberals, few commentators or voters will believe it.

Rudd’s smart play of appealing directly to the public for support, rather than those “faceless men” in the ALP that he so despises, will ensure two things happen.

Firstly, it will further damage Labor and Gillard’s terrible standing in the polls. There is really no way that a bitter falling out like this can do anything else.

Secondly, Rudd will most likely hang around, despite his poorer-than-expected showing today. The public support he has received could still inspire him to just hang around on the back bench, waiting, waiting, waiting until the ALP’s position becomes so desperate that the party (led by those “faceless men”, presumably) turn to him again.

All of which means that we can expect most of this political year to be taken up with speculation about the Labor leadership.

Reports today say Gillard is planning a policy blitz in the coming months to put the leadership disaster behind her and refocus voters on the key differences between her and Abbott.

That sounds like a great idea, although a closer inspection of the “still to come” list suggests it could harm rather than help her chances of rebuilding public support.

In just over two months, Treasurer Wayne Swan (hopefully recovered from his classless attack on Rudd) will deliver a budget that will necessarily include spending cuts if it is to deliver the surplus the ALP has promised.

Whether we really need a surplus is a moot point – Swan and Gillard have backed themselves into a corner and must deliver. Problem is, spending cuts don’t tend to make governments more popular.

Two months after the budget the carbon tax will come into effect. In the past week, Gillard has framed this as one of her major achievements, and I think that’s right – but the Opposition won’t agree. Expect a brutal campaign focused on Gillard’s broken promise not to put the tax in place and fear-mongering about price rises as a result of the tax.

Business is also likely to be disappointed by the policy blitz. The Government’s working group on business tax reform will report in the coming weeks, but it’s unlikely Swan and Gillard will have much spare cash to implement the group’s reforms around carry-back losses.

The Fair Work review is another major policy “event” but the Government has shown no interest in implementing any chances to its IR regime.

Gillard might have won this battle against Rudd, but winning the long war for re-election looks like an impossible task. 

Crikey’s political correspondent Bernard Keane has suggested that Gillard will be gone before Christmas, replaced by Rudd or even a third unity candidate.

That remains to be seen, but Keane’s underlying point is right – the leadership speculation does not end today.