JULIA Gillard is nothing if not an optimist. She has now set up a new committee, headed by her close friend and ally Jenny Macklin, to look at strategies to win the next election.
The move makes two more or less heroic assumptions, the most improbable being that Labor has not already lost it - a recovery from the party's current depths in the time remaining would not only be unprecedented, but downright miraculous. The second unlikely premise is that Gillard herself will lead the party to the election.
Unlikely, but not quite as credulity-stretching as it seemed a month ago. While Labor's numbers are still a full five percent below what is considered an acceptable minimum by the psephologists and her standing with the public remains low, Gillard has started hitting a few winners in the caucus room.
She is not in the clear yet, of course; the accepted wisdom is that she will have to hang on at least until Christmas, but in fact the challenge could come much later than that - as did her own strike at Kevin Rudd, only four months before an election was due.
And Rudd has let it be known that he is always available and willing, through his speech claiming that Tony Abbott could still be beaten (he meant by himself, of course, not by Gillard) and the odd move to gain favour like his promise to support Melissa Parkes' private members bill to ban the marine vacuum cleaner opportunistically rechristened Abel Tasman. And he remains overwhelmingly the popular choice as Labor a leader. Gillard cannot afford another major stuff up.
But it must be said that, just for once, she has gone a few weeks without one, and is starting - just starting - to shrug off some of the baggage she has been carting around during her first two ill-starred years as Prime Minister.
It began when she held the mammoth press conference to deal with the personal slagging against her, a major media success; not only did it dispose of the main issue, but as a corollary the other scandals which had been tormenting her - Craig Thomson and Peter Slipper - seemed to go into a kind of remission. They could flare up again, of course, but their initial potential to tear down her government has at least been contained.
Then there was the Houston report and the action on asylum seekers. It may not work - indeed, it almost certainly won't. The boats will keep coming. But at least the blame will now be dissipated, and Tony Abbott's simplistic sloganeering exposed for the sham it always was.
But far more importantly than eliminating the negatives, Gillard has started to accentuate the positives - to act like a Labor Prime Minister. The Disability Insurance Scheme was the foundation on which she has built the new Dental Scheme and the prospect of real progress on education reform following Gonski. Her opponents in both parliament and the media snarl that she is acting all too much like a Labor Prime Minster, indulging in wild spending sprees which are unaffordable and probably unrealisable - although, given that Tony Abbott has foreshadowed an even more extravagant program which he will not even submit to the institutions devised by Peter Costello for costing, does not have quite the political impact it used to. Sometime in the next parliamentary term, whichever side gains the Treasury benches will have to face up to the harsh reality, and there will be much wailing and gnashing of teeth when it does so.
But in the meantime Gillard can enjoy a bit of long overdue adulation from the true believers. Disability insurance, affordable dental health and properly funded public education are bedrock Labor issues: all sections of the party, from the old guard in the western suburbs to the chardonnay sippers of the inner city will applaud the reforms as basic and necessary. And if they have to be paid for with reduced spending in other areas or even, (shock horror) higher taxes, well, fair enough: Julia Gillard is finally getting her priorities right.
And as she is successfully hosing down the dissenters in her own ranks, Tony Abbott has to deal with a few brushfires among his own troops. Barnaby Joyce has always had the makings of a political arsonist, and in his uncompromising opposition to the sale of the giant Cubbie station to a Chinese consortium with links to the Chinese government, he has fanned some old embers in the National Party back to roaring life.
The Nationals, the old Country Party, have always been protectionists at heart. It was their last great leader, Black Jack McEwen, who inveighed against selling the farm - allowing foreign interests to take over Australian resources - and his brand of economic chauvinism is now an article of faith among party's traditionalists.
In the past Liberals have usually managed to keep a lid on the their junior coalition partners, extolling the virtues of investment from overseas to develop the countryside and industry, and gaining grudging support from the Nationals leadership, and Tony Abbott and Joe Hockey obviously thought they could do it again this time.
But the issue was too big, and the voice too strident, and Warren Truss (remember him? The National Party leader, the job Joyce is unashamedly positioning himself to take after the election) joined the push to save Cubbie from the People's Revolutionary Army. It is hardly a coalition-splitter, and eventually the Nationals will accept that they just don't have the numbers in the joint party room and retire, as usual, hurt. But they will take it as yet further evidence that the Libs in general and Abbott in particular either don't understand or don't care or both.
And in Queensland, where Campbell Newman is already inflicting grave damage on the conservative cause, it will be it will undoubtedly revive tensions between the newly merged parties. As the re-energised Julia Gillard was wont to say in the past, bring it on.
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