Kerplunk writes off ALP election chances

Regular readers will know that I've never been one to sit on the fence when I have a particularly strong opinion that I've developed after due consideration of the facts involved.

I have long held the view that leadership is something that can make, or break, those individuals who either seek it or have it foisted upon them. I always urge caution to those that quickly write off an individual before they've had the chance to step up to the plate and even did so when Mark Latham was appointed to the Labor leadership. My view was that the guy was an egotistical, class hatred driven, economic incompetent but, even so, I wanted to see how he performed once he wore the mantle. As things turned out, he was even loopier and with more personal issues than anyone realised and he crashed and burned, seriously setting back Labor's chances at the upcoming 2007 election by making no inroads into the government's majority.

The appointment of Kevin Rudd to the Labor leadership, along with Julia Gillard as his deputy, introduced a younger, fresher team that appeared to be more in touch with the Australian public than their older opponents in the Coalition. Opinion polls responded immediately with the ALP recording a large rise in voter support and an apparently unassailable lead in the polls that would see them comfortably win the next election.

However, as with all honeymoons they end too soon and such is the case with the Rudd/Gillard team.

There's no doubt that Kevin Rudd is an intellectually smart guy. His problem is that he thinks that being smart is all that's needed in order to succeed both in politics and, for the general public, in the Australian economy. His recent budget reply speech demonstrates this fact with his intention to provide more funding to schools in order to keep more students in school until year 12.

I certainly agree that we need our kids to be prepared for the transition we're going through from a manufacturing economy to a services economy and have written that in posts over the last few months.

The key to Rudd is that he has no understanding of how an economy works and what motivates the common person. Economies work by being given the freedom to operate in an environment unfettered by government interference and high taxes. Entrepreneurship must be encouraged and rewarded, not demeaned and torn down. It's entrepreneurs that drive Australia forward and government involvement, of either political hue, is always negative.

Individuals are 100% motivated by their own selfish interests and perform best when they have the opportunity to positively influence their own financial circumstances. That's why the government's WorkChoices legislation has been so successful. Speaking as an experienced negotiator of salary packages with my staff throughout my career I know that people will willingly trade-off certain aspects of their entitlements in order to achieve a higher guaranteed income.

Take the example of someone that is on a base salary of $60K and through various overtime and bonus schemes has the opportunity to achieve an income of $75K. Say that in the course of a few years they have ended up with between $65 and $70K. Now, our worker has been saving up as hard as they can and wants to take out a bank loan in order to buy a house. The salary information that the bank accepts is base $60K + extras, which is almost the same as $60K when they apply their risk profile, which lowers borrowing capacity. If this worker is offered $68K-$70K as a trade off for bonuses and/or overtime opportunities that they value at a lower amount then they will nearly always choose to accept it. There's no coercion involved, he doesn't have to accept the deal but he chooses to because it guarantees more money in his pocket than what he had previously and it increases his borrowing ability in the above example.

Rudd's IR policy, formulated completely by the unions, would be an unmitigated disaster for this country at a time when world competitive pressure is increasing at a terrific pace.

Equally, the Labor party seems to have a tin ear when it comes to the issue of Climate Change. They are prepared to go along with the massively discredited Stern Report and demand an insane 60% reduction in emissions by 2050 regardless of the economic consequences. What Labor is missing is that whenever the public is polled they express concern over the issue but they're not prepared to sacrifice themselves to achieve it, especially when they see China and India pumping along at a great rate. The government has picked the public mood exactly by offering a measured, practical response while also pointing out that we emit less than 2% of the world's carbon output. People understand this stuff and know that 1) the catastrophic predictions are politically motivated and wildly inaccurate and 2) we don't have to bankrupt ourselves in order to make a difference.

The other issue that is starting to hurt Kevin Rudd is that the arrogant and obnoxious way he behaves in private is starting to become apparent on the national stage. In that regard he is quite like Mark Latham in that he becomes visibly irritated when asked hard questions or when things aren't going his way. When he has no track record to stand on these are not traits that will endear him to the Australian voter.

I was impressed with the way Julia Gillard came out of the blocks in the first few months after her ascension to deputy leader. She showed poise and a willingness to take on the big issues. I wondered how long it would be before the real Gillard emerged; the one driven by class hatred, disdain for big business and fawning admiration for those union hacks that have had such a pernicious effect over the last forty years. In the last month a lot of her lustre has worn off and her recent comment for business to stay out of the IR debate or risk 'being injured' was revealing not only because it exposed her own personal prejudice but also because it demonstrated that Labor is completely beholden to the union movement in spite of the public sham to the contrary.

The electorate will certainly have a clear choice in the upcoming election on a range of issues. The government will spend the next six months wedging Labor for its extremist position on climate change compared to the government's measured approach, its extremist position on IR compared to the government's delivery of record low unemployment and strong wages growth, and its schizophrenic position on nuclear power not to mention the ridiculous 'Latham forest policy' announcement that Labor would spend $250M fixing leaking pipes.

For some reason, Labor does not understand that the electorate knows what's needed in order for Australia to sustain its current period of economic glory and it's not IR changes, Climate Change hysteria, fixing leaking pipes or teaching more people to speak Asian languages.

Barring a left-field scandal or some such event, Labor has lost the next election. All that's left now is for events to play themselves out.