Julia Gillard on the ropes...this time its all of her making.

Disillusion with PM saps national confidence

• by: Dennis Shanahan, Political Editor
• From: The Australian
• May 01, 2012 12:00AM
• Gillard and the Labor government cannot continue like this; nor can the nation afford to have the federal government held in such disregard that it weakens national confidence.

This is much worse than just the wash-up of a few scandalous allegations against a Labor MP and the Speaker of the House - this is fundamental disenchantment with the Gillard government that began with the announcement of the carbon tax and the loss of respect for the Prime Minister in February last year.


No sudden, surprise and ill-explained standing down of the elected Labor MP, Craig Thomson, over allegations of misuse of union funds or the Labor-selected Speaker, Peter Slipper, over allegations of fraud and sexual harassment, is going to stem this long-term rot and the erosion of confidence it breeds.


This is evidence of a long-term trend and voter concern over much deeper issues such as the carbon tax, the cost of living, illegal boat arrivals, economic growth and business confidence. The prospect of the carbon tax and global uncertainty is destroying consumer confidence and business is applying a "Canberra discount" to share prices and investment decisions.


The Labor Party's primary vote has returned to its lowest levels on record. The only prime minister held in less personal regard than Julia Gillard was Paul Keating, and Tony Abbott has a clear lead as preferred prime minister.


MPs are confused and despairing as the pre-Christmas rise out of Labor's longest and worst period of support evaporates.


The optimistic "plan" to get Labor's primary vote back to the mid-30s and hence within striking distance of a less than disastrous outlook has proven forlorn. Labor's primary vote in Newspoll has been in decline since February and is now within one point of its record low of 26 per cent in September last year.


The numbers for Labor are actually worse than they were in September because voter support has shifted directly to the Coalition and the Opposition Leader. The Coalition's support is now similar to what it was at the peak of the Howard government after the terror attacks of September 11, 2001, and just before the 2001 election victory.


In September last year when Labor's support was at 26 per cent, the Coalition's support was lower than it is now and the Greens and "others" had higher support than they do now. At 51 per cent, the Coalition's primary vote translates into a two-party-preferred support of a whopping 59 per cent because Labor's lost vote is no longer parked among the Greens and others but going to the Liberals.


While Wayne Swan prepares for a budget which he insists must be back into surplus - even if only nominally - with spending cuts and imposts, the danger for Labor is that all the political and economic gain from a solid budget will not only be lost but also have the reverse of the desired effect. Gillard's lack of authority and the disproportionate concern about the state of the Australian economy relative to the rest of the world give an otherwise weak Liberal economic team the opportunity to play up negatives and score cheap shots in the realm of economic management and the cost of living. None of this helps the Treasurer's struggle to instil confidence.


The tough budget could provide the final straw in public and business confidence and exaggerate the caution and fear that are limiting the economy right now. Concern about the carbon tax is not abating, the prospect of a turnaround when compensation is paid is likely to prove delusional without real changes - particularly the implementation date and floor price of $23 a tonne for carbon - and the Gillard government and the economy will face even greater setbacks.
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