Gillard between a rock and a hard place

This week's US election has delivered another arrow deep into Labor's political heart with Obama, in words sure to wound, abandoning any emissions trading scheme for many years. Read his words because they will cut into Australia's political debate. "Cap and trade was just one way of skinning the political cat," he said. "It was not the only way. It was a means, not an end. And I'm going to be looking at other means to address this problem."

Shadow climate minister Greg Hunt said: "The President has announced that cap-and-trade is now dead, buried and cremated in the US. If she [Gillard] won't listen to Coalition plans for direct action, perhaps she might listen to the US. President Obama will now examine direct action models, just as has been put forward by the Coalition here in Australia."

Yet Gillard has pledged to a carbon price as proof of her economic reform credentials. That means an Australian price without any US congress-approved price. It is almost certainly an impossible call. Tony Abbott will renew his campaign with fresh and simple ammunition: "If Obama says no, than Australia should say no." Understand the magnitude of Gillard's dilemma: she must press ahead or fall away.

Pressing ahead will accentuate the lift in electricity prices and falling away will confirm Labor as a party in a systemic crisis over belief and commitment. The risk, again, is that the Greens and Abbott will look strong while Labor twists in the wind as its support declines.

Could there be any worse situation? Yes. It lies in the explosive outlook building in this country over boatpeople. This protracted crisis is far advanced without any sign of policy resolution. The Canberra-induced trap is to think this issue is settling down. That misses the mood on the ground and the shift in policy.

Immigration Minister Chris Bowen said last month the refugee approval rate for claims from Afghans is at 50 per cent, down from well above 90 per cent. That is, on Australia's own assessment, only one in two Afghans arriving is a refugee. The others, pending appeals, have no right to be here. "I think that's an important message," Bowen said in a classic understatement. It penetrates to the central issue: that Australia's approval rates have been too generous, that the restrictive language of the 1951 Refugee Convention needs to be upheld and that Australia must deny asylum-seeker arrivals any migration self-selection outcome.

The progressive mantra is about to unravel. This is because the flow of boats is increasing, fewer boatpeople are refugees, it is extremely hard to deport non-refugees, new detention centres are having to be established on the mainland and numbers are such - totalling 5800 this year - that with family reunion included boat arrivals now affect Australia's overall population intake profile.

Far from Canberra, community meetings at Northam in WA and Inverbrackie in South Australia, showed on-the-ground alarm about new detention facilities.

Abbott led the Coalition team. He punished Labor, saying people were "understandably outraged" when governments lost control of the borders.

Bowen says Labor has a plan to stop the boats. It is the regional framework including the proposed East Timor processing centre that Gillard pushed this week in Indonesia and Malaysia. Neither country is persuaded. Both will keep talking.

As a new Prime Minister, Gillard has tied her prestige in the region to this initiative. It will end in Gillard's humiliation or in a regional solution of improbable benefit to checking the boats to this country. The reality is Gillard cannot tolerate the status quo on the boats. Ongoing arrivals reveal Labor's failure to deliver border security, a legitimate expectation of the Australian public since nationhood.

Labor always looks better when the parliament sits. Its tactical skills expose Coalition flaws and divisions and the media duly follows. But such tactics are not enough to save Gillard Labor.

Arising from the resources boom, the finance sector, federal-state relations, climate change and boat arrivals, it is besieged by policy challenges that demand far-reaching and convincing responses that, so far, seem beyond Labor's political character.


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