Australia: is Labour doomed?

Or would Kevin Rudd's return help?

The ALP has slipped consistently in polls for months. It now trails the Liberal-National Coalition by 22%, according to a Newspoll published in The Australian. It appears that PM Julia Gillard is doomed: it's not now a matter of if she should go, but when. Her unprecedented unpopularity seems to stem from:

• her coup to remove predecessor Kevin Rudd in June 2010
• her subsequent poor performance as ALP leader at the federal general election of August 2010 when Labour scraped back in only by virtue of a deal hatched with the Greens and a few Independents
• her u-turn on the emissions trading scheme: now promoting it as a result of pressure from her governing coalition partners, the Greens.

Most recently, another factor has emerged in the form of her failure to deal effectively with the refugee issue, where her government's concocted arrangement with Malaysia was ruled as unlawful by the Australian High Court.

And now the economy. House prices are flat or falling. Certain sectors are stagnating despite a resurgence in overall growth in the last published quarter's figures. Unemployment is rising.

And yet a campaign to replace her with Kevin Rudd, now Foreign Minister, has failed. ALP powerbrokers are standing by Gillard despite press reports that Rudd had been calculating party support to unseat her. Maybe the numbers didn't stack up. Anyway, it looks like no change for now. 

But when?

The next election is due on 30 November 2013, only two years away. And any new Leader would have to settle in before seeking their own mandate from the electorate. And that against a backdrop of rotten levels of support, indicating a return to a Liberal-National Coalition government as virtually inevitable.

Furthermore, the world economy is set to turn sharply for the worse:

• The IMF has joined the doom-mongers
• China's growth (on which so much of Australia's depends) is slowing and a property bubble threatens to burst
• The Eurozone is precarious to say the least
• The US is in dire debt and political deadlock prior to a bitter election campaign.

The UK prime minister has called for global stimulus to kick start stalling economies. Cameron has signed a joint letter with Australia, Mexico, South Korea and Indonesia pressing for co-ordinated action from the G20 nations.

This is undoubtedly necessary, as the World Bank president has said that a BRIC bailout of the Eurozone is unlikely. Can a harsh global recession be avoided, one which would impact Australia? Concerted inter-governmental action to thwart adverse market sentiment usually fails. Where there are underlying systemic issues a papering over of the cracks doesn't work. 

Gillard appears to be between a rock and a hard place. Tony Abbott, the Opposition leader, must be rubbing his hands with glee at his parties' revival in fortunes, as his Coalition nudges 50% in the polls (latest opinion places them two points shy).

But who would wish to inherit an economy in these circumstances. Perhaps as Kevin Rudd is in a centre of global gossip in New York he's realised that now might be a dreadful moment to wrestle the mantle from Julia Gillard. Maybe he thinks his present portfolio isn't so bad after all, as it keeps him out of the domestic fray. I suspect he's holding his firepower for another day.

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