Influencers & Profiles

Gillard compromised by compromise

James Thomson /

Prime Minister Julia Gillard might have grabbed all the media attention yesterday afternoon with her decision to distance herself from the embattled Craig Thomson and Peter Slipper, but I spent a lot of my weekend thinking about another news story from the other side of the world.

On Friday night, the Spanish Government released official figures showing that the unemployment rate had risen to 24.4% in the March quarter, making Spain the unemployment hotspot of Europe.

Dig deeper into the figures and it gets worse. A staggering 52% of people aged under 25 are without employment, painting a picture of an army of university graduates finishing their studies with only a one-in-two chance of getting work.

In addition, there are now 1.7 million households where no adult member has work.

The figures are unthinkable to most Australians. To have one in four citizens out of work will take a huge toll on the Spanish nation and no one will be left more scarred than the country’s young people.

How long will it take for the labour market to recover? A decade? Longer? It’s hard to say, but what is clear is that the European crisis is far from over.

The problems in Spain put Australia’s political woes sharply into focus. With our low unemployment rate, low interest rates and relatively strong economic growth I am sure there would be plenty of leaders across Europe prepared to swap places with Gillard.

Indeed, many of these politicians would find it hard to understand how Gillard is in so much trouble. But Crikey’s political correspondent Bernard Keane summed it up perfectly when he said this is a government and a prime minister with the stench of death about them.

As Keane argues, Gillard’s government has not been a bad one. Its economic management has been good and it has set out to bring in some genuinely big bits of policy, including the carbon tax, health sector reform and delivering on the NBN.

You might not support all of these measures, but getting them through in a minority government has not been an easy task.

However, it’s becoming clear that it is this same minority government that is killing Gillard’s re-election chances.

Forming and then running a minority government is all about compromise, but Gillard has had to compromise so much that she’s gone from looking like a strong leader to someone willing to do anything to hold onto power.

In any other government, Craig Thomson may well have been made to resign. But that Gillard was prepared to cling to the “due process” line for so long – and then backtrack so inexplicably yesterday – has been damaging.

The deal with Slipper might have been politically smart, but when it blew up Gillard was left looking silly. As with Thomson, she stood by her man for much longer than her common sense would have told her was sensible.

Gillard’s lack of judgement has the press talking about a leadership challenge and those drums might be louder after a Budget that will contain plenty of pain and will probably be poorly received – surplus or not.

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James Thomson

James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review's companies & markets editor, and a former BRW editor.

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