Power Failure: How Labor Imploded Over Climate Policy

  • Date: 10/05/14
  • Philip Chubb, The Age

It was the moment when the Rudd government lost its way. In this extract from his new book Power Failure, Philip Chubb tells the inside story of how Labor imploded over climate change policy. After the disaster of the UN climate summit in Copenhagen in December 2009, Kevin Rudd suddenly shifted his focus to hospital reform – but his failure to deal with the fall-out for his signature climate policy was to prove fatal to his leadership. 

Power Failure: The inside story of climate politics under Rudd and Gillard

In the week after Australia Day 2010, Rudd flew around the states. His hospitals team, including Nicola Roxon, was dragged along with him from Melbourne to Adelaide, Perth, Darwin, Brisbane and back to Darwin. This was the only way they could get the hours they needed to talk about the major reforms he was pushing.

While the prime minister was focused on hospitals, he knew he could not just give up on climate policy. But what was to be done? The senior figures in the government, it seemed, were talking about it non-stop. But they could not get through to Rudd, and his paralysis seemed to be worsening. “Whenever he didn’t know what he wanted to do, he just didn’t do anything. And, you know, it’s just a feature of how he operated,” said Wayne Swan. The stress of early 2010 exacerbated the trait. “A lot of the stuff that’s said and written about Kevin being a detail-minded guy is actually about him being presented with information to make a decision on and delaying a decision by asking more questions,” said a senior public servant.

Abbott was running hard on what carbon pricing would do to the cost of living. While apparently acknowledging that the electorate would not accept out-and-out climate change denial, he developed a policy of reducing emissions through what he called direct action. Abbott was in the early stages of a three-year post-GFC scare campaign, arguing that, “the Coalition’s direct action plan is careful, costed and capped” while the government’s approach was a “great big tax on everything”. He said it again and again. He was attempting to spook both Rudd and voters, and he was spectacularly good at it.

Observers mostly characterise Rudd’s demeanour in this period as agitated and angry. His work patterns were chaotic. Several times Gillard, Swan, Roxon and senior staff would be told on Friday or Saturday to be at a meeting in Canberra the next day to work through roadblocks. Roxon was once summoned to the Lodge on a Sunday night; Karl Bitar was also present. The boss told her he wanted hospitals on the Cabinet agenda the following morning.

Sometimes Rudd’s behaviour in meetings was genuinely worrying. Several sources describe independently how he sometimes physically froze and was unable to continue. He took trips around the garden to help regain his composure. Valentine’s Day in 2010 saw a particularly serious instance of this behaviour. Abbott had already sparked fear in Rudd. Then, with an acute political judgment that Australians would see much more of in coming years, he drove Rudd to a “meltdown”, as observers have described it. In a relatively insignificant stunt designed to irritate the prime minister, Abbott glided into the hospitals issue. He visited Sydney’s St Vincent’s to pledge that a Coalition government would install local boards to fix public hospitals within six months of winning power. Since the election, he said, “all we’ve had [from the Rudd government] is waffle and committees”.

The result of this small intervention was chaos. A hospitals meeting was scheduled to be held at the Lodge that day, involving senior ministers and relevant staff. Rudd was in a spin, so the meeting started late. He then wanted to keep the group small, so he could be free to be himself. Some staff were forced outside and spent the day on the lawn playing handball. They were not allowed in but not allowed to go home. As if that was not weird enough, things soon became totally bizarre.

“Rudd had this absolute meltdown. He was completely spooked that Abbott would beat him to taking over the hospital system,” said a witness. “We were brainstorming different ways of fulfilling his ambitious commitment of 2007 about taking over the hospital system one way or another. People were very nervous about doing that, which is a whole other issue, and he just couldn’t face it. We were in his dining room in the Lodge working on health stuff and he just couldn’t keep it together.”

Rudd hyperventilated and froze so seriously that his chief of staff, Alister Jordan, helped him to his feet and took him for a walk. It seemed he had suffered a debilitating panic attack. Everyone was shocked and embarrassed for him. The only thing that broke the mood was the dog scratching at the door.

Gillard stood up and attended to the work on the whiteboard. That was her way. She reacted with no fuss, methodically worked through a plan and became the person Roxon and Swan would go to during the remainder of the health reform process, whenever Rudd was unable to bring order or sense to it.

In March, Rudd commissioned a briefing paper from senior staffer David Fredericks, who consulted with others in the Prime Minister’s Office and went off quietly to speak to people he knew in the Department of Climate Change about how you could get to the 5 per cent target by some other mechanism than an ETS. The end result directly and completely unexpectedly stole from Abbott’s direct action policy.

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