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ELIZABETH:

From Schwartz Media. I’m Elizabeth Kulas. This is 7am.

As Labor responds to an internal review of its election defeat, some in the party feel they’ve already lost the next election. And while they struggle with uncertainty, the Coalition struggles with the task of governing. Paul Bongiorno on the difficulties of winning and losing.

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PAUL:

Is that you, Elizabeth?

ELIZABETH:

Hello, Paul. How are you?

PAUL:

I'm quite well, I'm now getting back into the studio. Closing the door, sitting myself down. When you're ready, I'm hot to trot.

ELIZABETH:

OK let’s get into it. Paul, Labor will respond to this election loss review today. What are we expecting that Anthony Albanese's response will be?

PAUL:

Well, Anthony Albanese will give his formal response to the review at the National Press Club, in fact today. Look, he's keen to move on. He's already said that he wants this review and the election loss to be something in Labor's rearview mirror.

ELIZABETH:

Paul Bongiorno is a columnist for The Saturday Paper.

PAUL:

He's going to obviously have to and will acknowledge the identified lessons that he will say are well learned. He accepts now that his job is to keep the party together. And that's going to be an easy thing. Heal the wounds if he can, and I'm sure he'll do this. He won't be leading any calls for blood lust or any recriminations. And in fact, he's going to say that the job has now begun to position the party for the next election, which is due in 2022.

ELIZABETH:

So unity. Anything that would get the party unified, is that the name of the day?

PAUL:

Well, look, I think it is. But what Albanese realises, and the Labor Party has to come to terms with, the discipline we saw in the last six years under Shorten was in very large measure driven by the sniff, the scent of victory. And in fact, we might say in the last three years, the certitude in their belief that they were going to win. Unfortunately, the Labor caucus is shell shocked and it's gripped more by the certitude that it's going to lose next time. And that, in itself, is a recipe for instability and disunity.

ELIZABETH:

So Paul, you're saying that there are people within Labor, at least some, that feel they've already lost the next election in 2022?

PAUL:

Yeah. The mood in the Labor caucus is that they've lost their moment, that the electoral cycle had arrived at the moment for a change of government, mainly due to the appalling state that the Liberals seem to be in. I mean, basically six years, three prime ministers, and the last term, the obvious undermining and brawling over Malcolm Turnbull's leadership. Now, there is a view that the electoral cycle has begun to turn the other way and they could be out of power for another two terms. That that could be wrong. Of course, people had that view after Paul Keating won the unwinnable election in 1993. The three Labor lost in a landslide in 1996 to John Howard. So what I'm talking about here is not the reality of who's going to win or lose next time, but the mood that is very much gripping many in the Labor caucus at the moment.

ELIZABETH:

And you're saying that makes the task of discipline much harder for Albanese over the next couple of years?

PAUL:

Yes. There's nothing like the scent of victory or the belief that you're certainly about to win, to keep you in line, to make you bite your tongue, to not rock the boat.

ELIZABETH:

Albanese will give his response to the review today, but we got a sense of its content yesterday afternoon - at a press conference with the review’s authors.

PAUL:

The lead reviewers, if you like, with the former South Australian Labor Premier, Jay Weatherill. And former trade minister Craig Emerson.

Archival tape -- Jay Weatherill:

“We tried to put ourselves in the situation of the facts at the time and without exception the expectation was that labor would win….”

Archival tape -- Craig Emerson:

“And that mindset, we do find, infected the campaign, and it started to affect a lot of the thinking. The great irony is that the attempt to actually build trust was actually the thing that created great fear. So there’s something quite tragic about that…”

PAUL:

Well, I think it'll be a long time before an opposition is as crazy brave, if I can put it that way, as Shorten was running such a big target campaign. Wayne Swan, who's the party president now but was treasurer in the Rudd and Gillard governments, says the real problem was Labor had too many policies and these couldn't be effectively communicated to the electorate. And of course, that made it easier for the Liberals to characterise the agenda as “big spending and big taxing.” Swan says he firmly believes labor cannot retreat on either the shape or content of its agenda. He says the size of that agenda is another thing. And I think that's a distinction we'll see more of — not different policies, just fewer of them being emphasised. Swan says that means Labor must find a way of communicating its vision through a short list of high profile, easy, campaignable policies.

ELIZABETH:

What about the policies that Labor did take to the election? How did they go defending those in the review?

PAUL:

Well, Swan and Shorten have both noted what Swan calls the effectiveness of the ruthless demonisation of these policies. They point particularly to the $60 million advertising spree by Clive Palmer, who Swan calls a single plutocrat, which is interesting.

Labor, in fact, was outspent 6 to one by its opponents at the election. And the review accepts that Labor didn't do enough to defend what Swan calls its vulnerabilities on taxes. They didn't push back against the characterisation of their agenda as big taxing and big spending. The party president points to issues with Shorten's leadership and this gets a mention in review. He says, we must also acknowledge that the agenda can only be as large as the voters trust in the leader and the party to deliver it.

Now, political analyst Peter Brent said Shorten's evasive persona accentuated the negatives and the doubts Labor suffers over its handling of the economy. Peter Brent says Labor confused the difference between being in government and being in opposition.

At the same time, Brent, who's quite a respected analyst, says Labor shouldn't overthink its loss. He says if people are ready to get rid of a government, don't stand in their way. Don't be difficult to vote for. Don't needlessly annoy voters and leave big, complicated policy announcements to when you're actually in government. One Labor insider who's seen the review describes its conclusion as “dud leader, dud policies and dud campaign.” Now, I think that's more out of bitterness than summing it up completely. But already we're hearing out in the commentariat that sort of analysis and it's coming, as I'm saying, straight out of the Labor Party.

ELIZABETH:

So that's labor. Where does the Coalition find itself after winning that election? Do they have a review themselves?

PAUL:

Well, yes, they do. After every election, there is a review but what they're finding right now is a truism of politics. It's often a lot harder to govern than it is to win an election.

ELIZABETH:

We'll be right back.

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ELIZABETH:

So, Paul, Labor's working through the findings of its election last review, but the Coalition has, as you say, this much harder job now of governing the country. What issues has this week presented them?

PAUL:

Well for one thing, we saw the worst Australian retail spending figures since the 1990 recession. And it's not being helped by the Reserve Bank holding interest rates at the emergency level of zero point seventy five per cent. The RBA doesn't do that if it thinks the economy is finally beginning to perform better. So whatever the spin, the economic stimulus promised by the Morrison Frydenberg tax cuts back in May hasn't registered.

It's no stretch to posit an explanation like this. People are not feeling secure about their jobs. Their wages aren't keeping pace with the cost of living. And they would prefer to begin paying down their contribution to Australia's record household debt, rather than running out and shopping till they drop.

On Tuesday, Melbourne Cup Day, the RBA governor, Philip Lowe, said there was no winner for the economy or for the government, although he did say after a soft patch in the second half of last year, a gentle turning point appears to have been reached. Few economists agree with him and some even say he threw that in there under pressure from the government. Anyway, an exception is Stephen Koukoulas of Market Economics. He admits it is a glass half full sort of guy. He says the tax cuts have, in fact, pumped billions into the economy. And he, like the treasurer, says it'll take more time to take effect. But Lowe, the governor of the Reserve Bank, still says it'll take the economy another two years to grow to a better but still comparatively weak 3 percent with no significant wage growth. So that gentle turn will hardly be noticed, even on the admission of the glass half full economist and the Reserve Bank governor.

ELIZABETH:

Paul it feels like every week we talk about the government facing down some bad economic data and basically refusing to do anything. What is it doing?

PAUL:

Well, it's masterful in buying time. One thing the government is really good at is announcing reviews and inquiries. We have several royal commissions now underway and several others that have recently reported into banking and superannuation, into the NDIS, into disabilities. And, of course, the interim report into aged care.

ELIZABETH:

But the problem with reviews, of course, or inquiries, any of them, I guess, is that eventually they make findings and with that is the expectation of action.

PAUL:

Yeah. And Elizabeth, that sure is the issue for this government. The Aged Care Royal Commission delivered its interim report late last week, and the government was particularly evasive.

Archival tape -- Fran Kelly:

“Greg Hunt, welcome to Insiders.”

Archival tape -- Greg Hunt:

“Good morning, Fran.”

Archival tape -- Fran Kelly:

“Minister, will a government stop neglecting older Australians right now and announce more funding for these home care packages right now?”

PAUL:

Health Minister Greg Hunt was reluctant on television on the weekend to announce an immediate 2.5 billion dollars for home care packages for the elderly, even though the money is already provided for in the budget.

Archival tape -- Fran Kelly:

“This is not news to the government. When the government does announce this funding package in MYEFO, will it be at least two and a half billion dollars?”

Archival tape -- Greg Hunt:

“It will be a significant package. So I won't preempt it”

Archival tape -- Fran Kelly:

“That high?”

PAUL:

It's another example of the government buying time or trying to work itself out as it goes.
Hunt admitted the Aged Care Royal Commission went further than we expected, he said, in its scathing interim report, which blamed this and previous governments for neglect. The commission found that the aged care sector is a sad and shocking system that diminishes Australia as a nation.

Archival tape -- Fran Kelly:

“Well we wait for the government’s response, I guess…”

Archival tape -- Greg Hunt:

“it will make it a better country and a better society as a result of the commission.”

ELIZABETH:

And then there's the drought task force as well, isn't there Paul ?

PAUL:

Yes Elizabeth, this report prepared by Major General Stephen Day was handed to the government, in fact, seven months ago. That is before the election. Cabinet’s taken until this week to thrash out a response which again demanded significant spending and more emphasis on drought preparedness. Unveiled on Thursday was a billion dollars in concessional loans and half a million dollars in relief and infrastructure packages with an emphasis on hard hit rural towns and businesses. The government in fact has a new slogan: It's not sitting and forgetting on drought response, which of course is just as well because no one knows when this drought will end.
But when you've been in power for seven years, it clearly becomes increasingly difficult to pretend to be surprised by these things.

ELIZABETH:

So what is the coalition actually hoping for? Because surely this has to end. Buying time is not a strategy that can go on forever.

PAUL:

Well, that's right. Scott Morrison seems addicted to kicking the can down the road. But eventually you do have to face the music one way or another. And of course, within three years, you have to face the voters.

ELIZABETH:

Paul, thank you so much, it's great to talk to you, as always.

PAUL:

Thank you, Elizabeth. You're such a lovely person. Bye.

ELIZABETH:

I’ve got a recording of that now Paul so...

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ELIZABETH:

Elsewhere in the news:

Australia’s main electricity grid was briefly powered by 50 per cent renewable energy for the first time ever this week, with solar, wind and hydro combining to deliver just over half the power supply to Queensland, NSW, Victoria, Tasmania and South Australia. According to experts, this will become increasingly common.

And the Andrews government has announced a plan to phase out native forest logging in the state by 2030, with the logging of old growth forests to stop immediately. The Andrews government has said it will provide $120 million in financial assistance to the timber sector to support the transition to a plantation-based supply.

7am is produced by Emile Klein, Ruby Schwartz, Atticus Bastow and Elle Marsh with Michelle Macklem.

Erik Jensen is our editor.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

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This is 7am, I’m Elizabeth Kulas. See you next week.