Decline and Fall?

My god, the Australian Labor Party is a mess. Since coming to power in a landslide federal election in 2007, it has lost governing majorities in four of eight states and territories and of course in Canberra itself, where it clings on to power thanks to a motley group of independents and minor party MPs.

Now Labor's electoral support is at an all-time low - just 26 per cent - and rumours are flying round that the backroom boys of the party are plotting to make Julia Gillard the ALP's Lady Jane Grey.

Consider that Australia is in the middle of a once-in-a-generation boom and you have an idea of how weird this is. The UK Conservative party is in better health, despite introducing massive spending cuts against a backdrop of a moribund economy and a continent falling to bits. This is truly extraordinary incompetence on the part of federal Labor.

I've got no very coherent thoughts on all this, but a few disjointed ones:

1. Dumping Kevin Rudd so soon before the election last year was an unmitigated disaster. By numerous accounts he is a difficult politician to work with, but then Gordon Brown occupied one address or other in Downing Street for 13 years: one of the purposes of politicians' private offices is surely to make these egotists capable of rubbing along together. The decision made voters think that Labor was more preoccupied with its internal squabbles than with running the country.

Moreover, it was a tactic lifted from the playbook of the reviled and corrupt New South Wales right faction of the party, who were booted out unceremoniously in state elections earlier this year after changing leaders more times than Lady Gaga changes outfits.

NSW is the biggest state and a crucial swing area in elections: linking federal Labor with these crooks was a big, big mistake. It also underestimated the voters, who actually do care more about policies than personalities, if they perceive there to be a real choice in terms of policy.

2. Labor has utterly mishandled the rise of the Greens. This dynamic was visible years ago: I remember writing about it back in 2004. Labor seemed to see the Greens as a second coming of the Democrats, a now-defunct party who tried to be a bit of everything. Fatal mistake.

The Greens have always had a very clear ideology - it's there in the name - and as Australian politics has drifted towards interest-group-ism and dog whistles to alienated bigots, they're probably now the closest thing Australia has to a mainstream European social democratic party of the old school. Labor has responded by treating them like a passel of Stalinists, picking up a frankly bizarre talking point from the rabid ends of the News Ltd papers. That makes them look silly and vindictive, and makes it very hard for them to woo the green vote.

An excellent Peter Hartcher column in the SMH a few months back made the point perfectly. The Greens stand for left environmentalism. The Lib/Nats stand for right state capitalism. What does Labor stand for? Nobody can say. Labor are the true heirs of the Democrats, and look what happened to them.

3. On a related note, we all know Labor is institutionally a mess. This isn't just in the NSW right - although the continued rise of that faction since the NSW state elections is a piece of chutzpah on a par with Wall Street's ability to use the financial crisis to advance its interests.

There's a problem in that the internal power structure of the party comes from the conservative wing of the union movement. That means that the Labor voting base is fundamentally split on a whole host of issues. It explains why the carbon tax has been so dangerous, because major union bosses don't like a deal that is seen as hurting the metal-bashing industry. It also explains why supposedly liberal Australia will be one of the last countries to grant full partnership rights to gay couples.

The right and left streams of Labor's electoral base often dislike each other more than they dislike the alternative parties on either side. So both sides are picking them off.

4. Australia's boom hasn't been nearly as good for people as it's supposed to be. People are up to their eyeballs in debt and trade-exposed industries are being killed by the strong dollar. Bricks 'n' mortar retailers can't compete with offshore operations when the currency is so strong. The government is coming off the sugar high of the financial crisis stimulus, which means a fair bit of retrenchment in the public sector. And people are aware that the world is collapsing up in the northern hemisphere, and can't quite believe we'll be immune. All in all, people feel they're not doing as well as they should be doing, so they feel disillusioned.

5. Tony Abbott makes stuff up, the News Ltd. papers regurgitate it, and the ABC regurgitates that. The groupthink that permeates the media and political classes here is astonishing, and astonishingly mindless. Still, as a government you have to play with the hand you're dealt. I'm quite sure that the media tilts the debate rightwards, but I'm equally sure that the government could do more to combat this, and doesn't.

6. Julia Gillard is a terrible figurehead. Lacking much visible sign of spark, inspiration, or talent. She may be much better at managing the warring factions of the Labor party but, publicly, she just fails as a leader. It's a sign of how repellent Tony Abbott is that it's taken him this long to overtake her in the polls, despite a conga-line of craven admirers in the press and, let's face it, considerably greater reserves of school-bully charm.

As for what they should do? I'd follow that old Irish saying: "If you're going there, I wouldn't start from here." I think they have to accept that they will lose the next election and try to act to maximise their policy gains till then, and minimise their political losses. Of course, those two objectives work at cross purposes: the carbon tax is a policy win that is looking politically horrible for Labor. So, cynically, I think the best thing to do after stealing a remarkable skin-of-the-teeth electoral victory last year is to do what successful thieves have ever done after the act: lie low. Try not to get noticed.