David Harper: This week saw big problems emerge for the Labor Party in New South Wales and Western Australia, while federally the Nationals shrank even further with the loss of Lyne to independent MP Rob Oakeshott. In the Senate, Steve Fielding voted down the luxury car tax increase, much to the displeasure of the Rudd Government. Meanwhile, in the United States, Alaskan Governor Sarah Palin has been formally introduced to the American public, an introduction which has garnered an immediate and positive reaction.

NSW, WA Labor in crisis

Since the defeat of the Howard Government last year, the Australian Labor Party has been in power both federally and in all the states and territories. However, events this week show that the ALP’s historic grip on a number of state governments is weakening. In New South Wales, Premier Morris Iemma, who had only been in office for three years, resigned suddenly following a week of crises. Mr. Iemma’s plans to privatise the state’s power industry, long opposed by his party, were resoundingly defeated in parliament after the Liberal Party decided to defy the business community and vote against the enabling legislation. Following this defeat, Deputy Premier John Watkins announced his retirement, prompting a cabinet reshuffle. On Friday, Mr. Iemma’s plans for the reshuffle, which included the demotion of unpopular Treasurer Michael Costa, the architect of the power sell-off, and a number of other senior ministers, were scuttled by Labor MPs. Mr. Iemma immediately announced his own resignation, and shortly afterwards the little-known junior minister Nathan Rees was elected unanimously as Premier, with long-time Carr Government minister Carmel Tebbutt as his deputy.

The Labor Party is no doubt hoping that the 40-year Mr. Rees, who has only been in parliament for 18 months, will give the party a much needed fresh start. Mr. Iemma’s Government had, in recent months, become widely reviled for its arrogance and stupidity, and at his inaugural press conference Mr. Rees was at pains to stress that he intended to get on with the job of fixing the many problems facing the state, and to promise “straight talk” rather than the endless cycles of spin that characterised his predecessor’s administration. However, Mr. Rees has inherited a difficult situation from his predecessor, and it is unclear exactly how much leverage he will have both on the party and, more generally, service delivery.

Mr. Rees faces three major difficulties. Firstly, it is clear that despite the ongoing windfall from the Goods and Services Tax, the state’s finances are not in the best of shape. The new Premier told Lateline that the failure to agree to the power sell-off has blown a $15 billion hole in the infrastructure budget. This means that the much-needed infrastructure plan is now in jeopardy, unless the Government can make cost-cutting measures elsewhere. Secondly, as the caucus was not prepared to agree to Mr. Iemma’s radical restructuring of the cabinet, and Mr. Rees was similarly forced by caucus to keep a number of unpopular and under-performing ministers, including the supposedly corrupt Joe Tripodi, who is alleged to have improperly obtained a high-paying public service job for a friend, and John Della Bosca, who is still under investigation by the NSW public prosecutor over his role in the Iguana’s nightclub affair. (However, the widely reviled Health Minister Reba Meagher, whose outright incompetence is the stuff of legend in NSW, has fallen on her own sword and retired to the back bench.) Thirdly, many New South Wales services, particularly the health department, are already stretched to breaking point, and it is unclear exactly what can be done to bring these agencies back from the brink, especially given the tight financial situation Mr. Rees finds himself in. Lastly, some agencies, particular RailCorp, are simply corrupt, and although this is not directly Labor’s fault, the party – which has been in power in NSW for 13 years – must bear some responsibility. Mr. Rees and his new cabinet must encourage a new culture of accountability, as opposed to endless media spin, at both the parliamentary and public service levels, and restructure the state’s finances to direct much-needed resources to front-line services.

The challenge for the NSW Labor Party is enormous. Voters were clearly dissatisfied with the Iemma Government, and it will be Mr. Rees’ job to repair the public’s trust in the Labor Government. In addition, the new cabinet will need to deal with a number of time-bombs left behind by Mr. Iemma, such as the Lane Cove Tunnel and the North-West Metro project. This all will require considerable skill, Mr. Rees’ plain-talking style notwithstanding. Fortunately for Labor, the next election is scheduled for early 2011, which will give Mr. Rees ample time to begin turning the state around, if indeed this is possible under a Labor administration.

Meanwhile, the West Australian Labor Party took a beating at yesterday’s state election. According to the ABC, Premier Alan Carpenter’s Government has lost at least nine seats, while the Liberals have picked up seven seats. This means that the Nationals, who have not been in formal coalition with the Liberals for some time, have emerged as potential power-brokers in what is increasingly starting to look like a hung parliament. Assuming that current projections are correct, and the Liberals and the Nationals are able to muster a majority in the Legislative Assembly, Opposition Leader Colin Barnett, who was a minister in the Court Government, will become the new Premier of Western Australia. If the conservatives do indeed form a government, the Labor Party’s historic grip on all state and federal governments, which it achieved in November last year when Kevin Rudd defeated the John Howard, will have been broken.

The outcome of the WA election has been complicated by a major redistribution that was undertaken by the Carpenter Government, in which the old disproportionate voting system, which favoured country electors, was abolished and replaced by a more modern one person, one vote system. The redistribution has caused a number of anomalies, including seats contested by two sitting MPs, seats without any incumbent, and seats strongly contested by both the Liberal Party and its some-time ally the Nationals. However, despite these distractions, it is clear that large swathes of voters have become dissatisfied with the Labor Party’s performance. This is entirely deserved, and largely the fault of Mr. Carpenter, who in 2005 relaxed the ban on communication with disgraced former Premier and lobbyist Brian Burke. The subsequent scandals resulting from this disastrous decision have paralysed the Labor Party in Western Australia and forced Mr. Carpenter to sack five ministers. Mr. Carpenter perhaps believed that he could win this election by capitalising on the leadership turmoil in the Liberal Party and going to the polls before the Crime and Misconduct Commission released its report into Mr. Burke’s influence-peddling. Clearly he was wrong, and his corrupt administration has deservedly been punished by the electorate. The extent of Mr. Carpenter’s failure will only become apparent in the days to come, as Nationals leader Brendon Grylls waits to see whether his party will in fact hold the balance of power.

Oakeshott heads to Canberra

Although they are better represented at the state level, and may well play an important role in Western Australia for the next four years, federally the Nationals have entered what may become a terminal decline. The junior party in the Coalition lost three seats at the 2007 federal election, and yesterday they lost a fourth, Lyne, to former Nationals-turned-Independent MP Rob Oakeshott. Mr. Oakeshott, formerly the State MP for Port Macquarie, was comfortably elected to ex-deputy Prime Minister Mark Vaile’s rural seat, and will become the third Independent Member of the House of Representatives in the 42nd Parliament, alongside Tony Windsor and fellow ex-National Bob Katter.

The election of Mr. Oakeshott to what had been a formerly safe Nationals seat is an example of one of the two trends that may eventually kill the rurally-based party. The most pressing trend working against the Nationals is demographics. As formerly rural seats become more developed new voters who have previous experience with the major parties enter the electorates and find little in the Nationals that they can relate to. Secondly, as the Nationals’ presence in public consciousness declines, enterprising MPs, such as Mr. Oakeshott, have struck out on their own, leveraging their own personal followings to turn safe National seats into bastions of independents. Thus the party is further diminished as its most talented members depart, taking their constituents with them.

Combined with the population trends, the continued defections may prove terminal for the Nationals unless they can become more relevant to modern voters, rather than their old core base of agriculturalists. The party is aware of this problem, and is beginning to respond. In Queensland, the Nationals merged with the minority Liberal Party to create the Liberal National Party, while in Western Australia, Nationals Brendon Grylls has publicly stated that the party will sit on the cross-benches rather than join with the Liberals in the traditional Coalition. Whether these measures will be enough to keep the party relevant beyond its traditionally strong base in Queensland remains to be seen, and with just nine lower house seats federally, many Nationals members must be questioning the party’s long-term viability as a separate entity.

Fielding’s first test

Senator Steve Fielding, the sole Family First representative in Canberra, faced his first legislative test this week when the Rudd Government tabled its proposed luxury car tax increase in the Senate. The Government successfully negotiated compromises regarding the proposals with both the Greens and Independent Senator Nick Xenophon, leaving Senator Fielding as the sole remaining hurdle before the passage of the tax hike could be assured. However, Senator Fielding indicated shortly after a meeting with Treasurer Wayne Swan that he would vote against the bill, and shortly thereafter, despite a hiccup on the part of the Liberal Party, the luxury car tax was defeated by a combination of Coalition and Family First votes. The defeat of the tax increase blew a $555 million hole in the federal budget, a fact that Prime Minister Kevin Rudd was quick to exploit in question time, pillorying the Liberal Party for its decision to vote against the legislation.

Regardless of the culpability of the Coalition parties, responsibility for the defeat must also rest with Senator Fielding, whose behaviour this week was at best underwhelming. Pundits have been quick to criticise Senator Fielding’s decision as amateurish, rash and premature, suggesting that he should have agreed to let the taxation bill be shuffled into a committee for further negotiation. In the senator’s defence he did attempt to obtain concessions for farmers and tourism operators, only to be told by Treasurer Wayne Swan that his proposals were both unworkable and unconstitutional. Senator Fielding was right to point out that the proposed tax hike would have disadvantaged both farmers and tourism operators, just as the Greens were well within their rights to note that the proposed legislation discriminated against fuel efficient vehicles, which are often more expensive than those with less economy. However, the fact that the senator’s proposed amendments were clearly unworkable in the eyes of the Government is cause for concern, particularly given the fact that every piece of controversial legislation will require his approval before it becomes law. Frankly Senator Fielding, who has apparently requested that the Government provide him with additional staff to help him sift through the myriad of legislative initiatives he must now deal with, made his own bed when he put his name up for election and must now lie in it. Only the accidental election of Barnaby Joyce in 2004 prevented him from holding the balance of power in the last parliament. Senator Fielding has a responsibility to the Victorian electorate to propose acceptable amendments, not unconstitutional political stunts, and to work with the Rudd Government to come to reasonable decisions regarding its legislative initiatives.

Fortunately the Senator’s mistake of voting the bill down outright is not irreversible – the Government has already said it will reintroduce the legislation later this month, giving both sides a chance to work out a deal. Hopefully the parties will come to a swift resolution the second time around, and Senator Fielding will handle future legislation more appropriately as the government moves forward.

Palin proves her worth, for now

In the United States this week, Republican vice presidential nominee Governor Sarah Palin of Alaska officially accepted her party’s nomination and unleashed a spirited attack on Senator Barack Obama, the Democratic nominee. In her speech at the Republican National Convention, Ms. Palin compared her experience as mayor of Wasilla, Alaska to Mr. Obama’s early years as a community organiser in Chicago, telling the party faithful that the mayor’s job was similar, “except that you have actual responsibilities”. Ms. Palin’s address to the convention was watched by around 37 million viewers, and her lead-in helped Senator John McCain, the senior half of the Republican ticket, top Mr. Obama’s previous ratings record.

More broadly, Ms. Palin has already given Mr. McCain a huge boost in a number of important ways. Firstly, Ms. Palin has successfully rallied the conservative Republican Party base, despite the rather bizarre situation where Mr. McCain is building his election platform on criticism of the Bush administration. Secondly, Ms. Palin has also appealed to a wide array of ordinary, generally poorer, Americans, who feel that her down-to-earth demeanour and enthusiasm for guns and moose-hunting makes her more “in touch” than Mr. Obama – and who, despite the gravity of the issues at play in this election, appreciate her looks. Lastly, Ms. Palin has been able to cast aspersions on Mr. Obama’s experience – attacks that his limited legislative experience make him vulnerable to – and draw attention to Mr. McCain’s decades-long record.

The early results show that the electorate has, broadly speaking, responded well. Mr. Obama’s lead over Mr. McCain has narrowed substantially from eight percentage points to around two and a half – a statistical dead heat given the margin of error in most opinion polls. However, there is one possible problem that could derail the McCain campaign early next month: the so-called “trooper-gate” investigation into Ms. Palin’s actions in firing her Public Safety Commissioner. It is alleged that Ms. Palin wrongfully dismissed the Commissioner after he refused to fire a state trooper – Ms. Palin’s ex son-in-law – at the Governor’s request. Should the Alaskan House Judiciary Committee find that Ms. Palin acted improperly, her vice presidential candidacy might well be over, dealing a deadly blow to Mr. McCain’s campaign just a month before the election.

Either way, Ms. Palin’s candidacy – which was largely accidental, as Mr. McCain had intended to select independent Senator Joseph I. Lieberman – has shaken up the race in a way that nobody would have forseen. Mr. McCain, who has now attempted to take Mr. Obama’s oft-repeated mantle of change for himself, now has a real chance of winning the White House in a year when Republicans will likely do badly more generally. However, it will take some time for the underlying bounce from the Republican convention to filter through to the opinion polls, once the headline enthusiasm has evaporated. All I can say is – watch this space for the latest!

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