As has been widely predicted and reported, Julia Gillard has one the party room ballot 71-31. While Gillard went into the contest saying she would stand down and drop and leadership ambitions should she lose, Kevin Rudd made no such call.
Gillard will now drop Rudd from cabinet, but he will continue to undermine her from the back bench. He knew he didn’t have the numbers to beat Julia when he resigned as foreign minister last week – this is all part of his game plan. In effect, he plans to “do a Keating”. To refresh your memory, the Paul Keating article from Wikipedia nicely traces the rocky path that Keating took to Kirribilli…
At a 1988 meeting at Kirribilli House, Hawke and Keating discussed the handover of the leadership to Keating. Hawke agreed in front of two witnesses that he would resign in Keating’s favour after the 1990 election. The Deputy Prime Minister, Lionel Bowen, retired at the 1990 election, and Keating was appointed Deputy to Hawke. In June 1991, after Hawke had intimated to Keating that he planned to renege on the deal on the basis that Keating had been publicly disloyal and moreover was less popular than Hawke, Keating challenged him for the leadership. He lost (Hawke won 66–44 in the party room ballot), resigned as Treasurer and Deputy Prime Minister, and declared in a press conference that he had fired his ‘one shot’. Publicly, at least, this made his leadership ambitions unclear. Having lost the first challenge to Hawke, Keating realised that events would have to move very much in his favour for a second challenge to be even possible.
Several factors contributed to the success of Keating’s second challenge in December 1991. Over the remainder of 1991, the economy showed no signs of recovery from the recession, and unemployment continued to rise. Some of Keating’s supporters undermined the government. The Government was polling poorly. Perhaps more significantly, Liberal leader John Hewson introduced ‘Fightback!‘, an economic policy package, which, according to Keating’s biographer, John Edwards, ‘appeared to astonish and stun Hawke’s cabinet’. According to Edwards, ‘Hawke was unprepared to attack it and responded with windy rhetoric’. After Fightback!, Keating ‘did practically nothing’ as Hawke’s support dwindled and the numbers moved in Keating’s favour. On 20 December 1991, Keating defeated Hawke in a party-room ballot for the leadership by 56 votes to 51.
So what’s the solution? From Julia’s perspective, she can use this opportunity to grab the bull by the horns. A Labor loss in Queensland at the end of March will now be entirely blamed on Kevin Rudd destabilising the party just weeks out from the state election. Her campaign to retain the leadership was always on the back foot, but she showed she is a fighter (the press release from Wayne Swan was simply incredible).
She can rebuild, but it’s not going to be easy.