It is clear from the polls that voters believe Kevin Rudd promised to do something about rising petrol and grocery prices before the federal election last year. Nick Xenophon put his finger on the Government’s problem of balancing perception and reality when he said: “I just don’t think [FuelWatch is] going to do what it’s meant to do.”

Federal cabinet, meeting in Adelaide, a centre of the unfolding crisis, signed off on $50 million in additional spending to accelerate the buyback of water rights, which has so far had minimal impact. But the Opposition dismissed the package as “paper money”, while South Australia’s balance-of-power senator Nick Xenophon said it did not go far enough.

The Australian: Kevin Rudd accused the Coalition of siding with big oil companies over the FuelWatch scheme today, as the Government conceded it was prepared to “listen” to key senators to secure support.
Assistant Treasurer Chris Bowen extended an olive branch to crossbench senators over FuelWatch, admitting the Government would accept legislative amendments after it became [...]

The Government needs the support of the Greens and senators Fielding and Xenophon to get its legislation through the upper house. “We’re still wanting to understand how it won’t push petrol prices … up and we also want to know how FuelWatch won’t squeeze out independents,” said Senator Fielding.

Independent Senator Nick Xenophon said today that he was now convinced the FuelWatch scheme didn’t stack up. If the Coalition decides to oppose the measure the Rudd Government will be forced to rely on Mr. Xenophon and the minor parties to get the policy through the Senate.

When Parliament resumes next month it will be a brave new world for the Government and the Opposition. The Liberal-National Coalition no longer has a Senate majority. But that’s not necessarily good news for the Government either. The Coalition needs the support of two other senators to amend legislation and just one to block it. Labor, meanwhile, needs either the Coalition or the Greens and both Xenophon and Fielding.