The most important factor contributing to the ALP’s 2004 election defeat “was whether people had a mortgage”, according to the National Secretary of the ALP, Tim Gartrell.
Addressing the National Press Club, Gartrell highlighted the difficult position the ALP now finds itself in: “Because of [the ALP’s] two consecutive poor election results, from July next year the Government will take control of the Senate, and the outcome means in the lower house we now need to gain more seats than either Whitlam required in 1972, Hawke required in 1983 or
Howard required in 1996 to win the next election.”
In pinpointing interest rates as the key factor determining the election, Gartrell said: “Of the 15 seats with the highest proportion of mortgagees, 11 had a higher than average swing against Labor. For example, the most mortgage-sensitive seat in the country is Holt, where over half the voters are paying off a mortgage. In Holt, the two party preferred swing against us was 6.1 percent, almost three times the national average.”
- Listen to Gartrell’s speech (59m)
Transcript of National Press Club Address by Tim Gartrell, National Secretary of the ALP.
INTRODUCTION
Thank you for the opportunity to address the National Press Club.
Today I’d like to put Labor’s perspective on the campaign.
The loser’s perspective is rarely written, that’s why it’s important today to put our campaign into some context and debunk some of the myths that swirl around after an election defeat.
It’s also important that we acknowledge the loss, our mistakes and outline the task ahead of us.
Today, I’ll be as frank as possible but there will be no repeat performance of my counterpart’s highly censored exit poll that will tell you that our team is loved by the people (when they answered the right questions), that our ad team is brilliant and the muffins in the tea room at the Liberal HQ were far superior to those at 19 National Circuit.
Yes, we all know the victors get to write history but there’s only so much that can go unchallenged.
To start with I’d like to provide an overview of the result.
THE RESULT
From the start I acknowledge this was a very disappointing result for Labor.
This is despite the fact that in net terms we only lost 3 seats at a time when our economy is perceived to be strong, the international security situation uncertain and, as the US election shows, the benefits of incumbency are great.
Having said all that, it’s our fourth loss in a row since 1996 and our primary vote now stands at 37.6 per cent – 1.2 per cent less than when we lost government over eight and a half years ago.
To the credit of many of our marginal seat holders, this result didn’t translate into the same seat loss incurred in 1996.
Labor is still 14 seats net ahead of that result.
However, because of two consecutive poor election results, from July next year the Government will take control of the Senate.
And the outcome means in the lower house we now need to gain more seats than either Whitlam required in 1972, Hawke required in 1983 or Howard required in 1996 to win the next election.
It’s a very hard task — but not an impossible one.
In the coming months we’ll be analysing the results in more detail, but for now we have conducted some basic demographic analysis to guide our thinking in the immediate aftermath of the election.
For starters, we do know it’s more complex than simply asserting that the biggest swings were in the Labor booths.
Take the seat of Bonner for example, in the working class booths around Wynnum, there was a swing to Labor.
The swings against us occurred in the more affluent parts of the electorate, and cost Labor the seat.
The theory that the Coalition is now the party of blue collar workers is simplistic, and misses the major point.
Blue or white collar, tradesperson or professional, the most important factor was whether people had a mortgage.
This is the glaring lesson from the early analysis we have conducted.
Seats with the highest proportion of mortgagees were generally those which recorded the biggest swings against the ALP.
Consider this:
Of the 15 seats with the highest proportion of mortgagees, 11 had a higher than average swing against Labor.
For example, the most mortgage-sensitive seat in the country is Holt, where over half the voters are paying off a mortgage.
In Holt, the two party preferred swing against us was 6.1 percent, almost three times the national average.
Next on the list of seats with the highest proportion of mortgagees was Cowan, which saw us suffer a 4.7 per cent swing against an extremely popular incumbent Labor MP.
The list is long and illustrative; it includes seats like Aston and McEwen, with swings against Labor of 7.4 per cent and 4.2 per cent respectively.
While there’s no doubt other factors — some of them very specific and local— were at play in some of these seats, mortgages were the key.
When you think about it, it’s only logical – the interest rate campaign hit us hardest in the booths around new housing estates and in the seats with the highest proportions of mortgagees, and these were the booths and seats where we copped the biggest swings.
THE CAMPAIGN
What happened?
After the 2001 election, Lynton Crosby, in his role as winning campaign director and chief rewriter of history, sought to argue that the result was not due to Tampa, the unsubtle use of the race card, or the focus on national security.
The 2001 result, he claimed, was a sound endorsement of John Howard as a leader and the mythical third term agenda.
So this time, Brian Loughnane dusted off the Liberal Party manual and sought to convince you that the voters had once again overwhelmingly responded to the positive messages of the Coalition campaign.
In his speech he chose to omit the interest rates scare that dominated the Coalition advertising.
The Coalition campaign was overwhelmingly negative, based on Republican-style negative advertising and personal attacks.
I think the Coalition should openly acknowledge what they did in this campaign.
They engineered a very effective and well executed negative campaign that turned the focus on Labor and away from John Howard’s record and the pending leadership handover.
Despite being based on a total porky, it was an effective tactic, and it was delivered with discipline and consistency.
We acknowledge this and accept that it won them the election.
Interest rates, economy, three more years
By the last week of the campaign it became clear there were two perceptions that were dragging people away from their interest in our leader, our positive agenda, and a growing mood for change.
The first was the perception that Labor was a threat to low interest rates.
The lie that interest rates would increase under Labor had stuck, and washed over Labor’s positive agenda.
We heard about this growing unease during the campaign – from candidates with strong links to their communities, to unionists talking to members in workplaces and our own research.
The sentiment was best summed up by a woman in a swinging voter focus group in the middle of the campaign, who said:
“I like what Mark Latham and Labor are on about, I really want a change, but I’m scared about interest rates”
I’ll return to interest rates in a moment.
The second perception, which was just as potent, was that Mark Latham was inexperienced and needed more time.
This second area of concern was seized upon with a rehash of the Northern Territory Country Liberal Party’s 1994 “L” plate ad — with the “L” on Latham this time, not Labor.
So, while a majority of voters liked Mark Latham and felt his agenda was sound, the same people also expressed the view that he would be even better with another three years in opposition.
They also knew John Howard’s time was coming to an end and they might get a short spell of Peter Costello, a person they had strong reservations about.
In a logical way many decided they could have the best of both worlds. They could have both leaders.
By voting for the Coalition they could get more of the ‘devil they knew’ – John Howard – even if it meant putting up with a brief spell of Peter Costello.
Then, at the next election they would be able to vote for a more experienced Mark Latham, a leader who a majority viewed positively.
To political insiders like us this seems illogical but in the minds of many disengaged swinging voters it held fast.
In the last week, this notion of “three more years for Latham” was strong. In fact, according to our research, it was one of the top three concerns held by voters in target seats.
Household debt and interest rates
I’ll now expand some more on interest rates and why we believe it was such a potent issue in the campaign.
The Coalition’s interest rate scare was undeniably effective, based on their success in prosecuting the argument that Labor is the party of high interest rates.
It’s an issue we need to confront as we argue our economic credentials this term.
But, much more importantly I think, their campaign on this issue was effective because of the financial situation that so many Australians find themselves in.
Consider the facts:
Under John Howard, the cost of buying a home has nearly doubled.
In 1996, it took an average of five and a half years of wages to buy a house.
Now it’s almost ten years.
Mortgage interest payments cost more than ever – the burden of monthly mortgage debt has risen by more than 50 per cent.
Household debt stands at 766 billion dollars and growing, compared with 289 billion dollars when the Coalition took office.
And household savings have sunk to new lows, giving Australian families very little to fall back on if they’re suddenly placed under extra financial pressure.
When Labor left office, Australians were saving $5.80 out of every hundred dollars they earned.
Now they’re going backwards.
Today, for every hundred dollars, they go into debt an additional $1.90.
Little wonder people were susceptible to a scare campaign, however misleading, on rates.
Record levels of household debt — not just mortgages but personal loans and credit cards — have ramped up the fear of economic ruin and transformed the interest rate issue into a potent scare campaign rivalling Tampa for it’s scale and impact across marginal seats.
This is backed up by quantitative polling conducted three nights from election day, which gave the Labor team some stark and confronting news.
A majority of swinging voters agreed that “even though I think it’s time for a change, I can’t take even take the smallest risk of interest rates going up”.
In many ways this was the fault line determining the result on 9 October — a vote for change versus the fear of economic insecurity driven by the cost of servicing record debt levels.
High-debt households are working hard just to make their repayments and are receptive to any message that this might be under threat from a change of government.
As our analysis of the result shows, that’s where the scare campaign resonated most loudly — in the high-debt households of middle Australia.
This is the real state of play in Australia.
The electorate is not inherently conservative.
Swinging voters have always responded to hip-pocket concerns, just like they did in 1993 when they voted Labor against the mood for a change because they wouldn’t cop a GST.
In this case, it was the fear of yet another squeeze, and in the end they decided to vote for “the devil they knew”.
Peter Costello
It would be remiss of me not to spend some time dealing with the biggest post-election myth emanating from the Liberal Party, and that’s the alleged popularity of Peter Costello.
Of all the decisions we made during this campaign, this has attracted the greatest condemnation and ire of our opponents.
Our decision to highlight the leadership transition has provoked a howl of derision from the conservatives.
The moment the election result became apparent the Liberal spin machine went into overdrive — spewing out lines on why Peter Costello was a great asset during the campaign and mock disbelief that anyone would dare challenge this.
My opposite number in the Liberal Party spun this by selectively releasing the response to just one question in exit polling.
Well, when it comes to Peter Costello, the Liberals do protest too much.
In this case, the level of spin is an indicator of the level of sensitivity.
Nowhere was this clearer than in their strategy of leaking exit polling, revealing that voters have a positive view of Peter Costello’s economic stewardship.
That should come as no surprise. Many voters believe we are living in stable economic times.
The real question, asked by one of you a few weeks ago is: where are the rest of the survey results?
It beggars belief that Crosby Textor would only ask that question when it was clear from the rest of the leak that the survey was long and forensic.
Why not ask people whether they have a positive or negative view of Peter Costello, or whether he would make a good PM or whether they preferred Howard to Costello, or Costello to Latham?
We can only be left with the assumption that the rest of the findings were pretty unfavourable.
So let me respond with a more complete look at the Treasurer, demonstrating why we chose to campaign on Peter Costello.
Our election tracking research showed that on the final night of the campaign, the likelihood of a handover to Peter Costello was the fourth biggest vote switcher away from the Coalition (rating behind time for a change, John Howard’s lack of credibility, and education).
The handover featured at the top of the vote-switching tables consistently throughout the campaign, reaching as high as number two.
Peter Costello’s ratings were lowest during the final fortnight of the campaign, and he finished it in a worse position than he started.
By the end of the campaign the thought of a leadership handover to Costello made 28 per cent of people less likely to vote for the Coalition.
Among soft voters it was a staggering 40 per cent.
But it was in the swinging voter focus groups that the level of passion against Peter Costello was most clearly articulated.
Typical focus group impressions of Costello were “I don’t trust him, I don’t like him”, “he doesn’t like coming out to the bush”, “he’s a snake in the grass”, and “he’s smug”.
And, of course, there were many references to the infamous smirk.
Obviously the Liberal Party is using its victory to attempt to remake the Costello persona in preparation for the handover.
Our research backs our assessment of his weaknesses and we stand by our decision to highlight Peter Costello during the campaign.
Advertising
When it comes to Labor’s advertising campaign the criticisms are many.
We have, largely with the benefit of hindsight, been accused of:
Being too positive, or being too negative
Focussing too much on Howard, or focussing too much on Costello, or focussing too much on Latham, or not focussing enough on Latham
Not responding to Coalition ads and trying to set our own agenda, or not setting our own agenda
Or, all of the above.
Much can be explained in the context of the campaign and the limited resources we had to fight it.
One of the misconceptions of our advertising campaign is that we should have prosecuted a range of arguments early in the six weeks — most notably an inoculation on interest rates.
This is based on the assumption that in every week of the campaign Labor had a large ad buy at its disposal.
The fact is, our media buy could only sustain about two weeks worth of advertising at any level of effectiveness.
We estimated that the Coalition would outspend us by around one and a half million dollars.
In the end it was more like two and a half to three million.
For our first ad strike we decided to identify the people most likely to be affected by the scare campaign and looked at the other issues of importance to them.
They were, of course, voters in the mortgage belt seats — people who considered themselves under financial pressure from record taxes and the rising costs of education and health.
Many of them had incomes under $52,000 and felt abandoned after the May budget.
You might recall Labor’s first ad criticised the Howard Government’s record level of taxation and promoted our tax and family payments plan.
It ended with a message that Labor would take the pressure off families — which became the main theme of the campaign.
This tested well, it ran well and it had the dual benefit of also selling our family tax policy.
The bulk of Labor’s remaining ad clout was targeted at the last week before the electronic blackout.
We’d developed a strong response ad to the interest rates campaign and we devoted 30 per cent of that last week’s buy to it, with the remaining buy split between our key positive ad and the John Howard ready to leave concept.
As I said the day after the election, Labor always had a more complex task than the Coalition.
We had to introduce a new leader and his policy agenda. We had to highlight the record of the Howard Government over 8 ? years, remind people of the PM’s imminent retirement and the prospect of Peter Costello and inoculate against the attacks on interest rates, inexperience and Liverpool Council.
To ignore any one of these areas would have exposed a gap in our frontline.
All this within a limited advertising budget that was significantly less than our opponents, and up against the 167 million dollars of taxpayers’ money spent by the Coalition last term on partisan ads such as the Strengthening Medicare series.
This gross abuse of taxpayers’ money on inoculating Howard Government weaknesses freed them to devote all of the Liberal Parties campaign funds to attacking us.
Labor didn’t have that luxury. No political party should.
The Coalition’s task was clear. Hammer Mark Latham as inexperienced and scare the bejesus out of people on interest rates.
OUR MISTAKES
Having dealt with some of the myths about the Labor campaign I’d now like to turn to some of the areas where Labor did make mistakes.
Many of the people in this room wrote that Labor “out campaigned” the Coalition.
It’s true that on many individual days Labor won the day. In fact, the bulk of published opinion lay with Labor performing better on more days than the Coalition.
Even the Daily Telegraph’s highly scientific and carefully constructed Mal Meter had us winning 14 days.
I believe both sides ran very professional campaigns and most well informed commentators have agreed.
However, it is impossible to out campaign your opponents and lose. The final result requires an acknowledgement of our mistakes.
Mark Latham has already put his hand up and accepted a fair amount of the blame.
He’s highlighted that our focus was far too positive, that we sought to argue too much on our strengths and not enough on the Government’s significant weaknesses.
In short, we failed to lock horns with the Coalition on the vital ground of economic management and dispel the myths about interest rates.
This led to a victory of old politics, negative campaigning and pork barrelling over the notion that you can break through from opposition with an overwhelmingly positive agenda.
It’s now my turn to accept a fair share of the responsibility for the result.
Too much has been written that this campaign was a one-man band.
Whilst it was true that Mark Latham was very hands on and set a lot of our strategy, the campaign team and Parliamentary leadership endorsed and supported his approach.
This was not a campaign where there were internal divisions and major differences of opinion.
In fact, many noted the sense of cohesion, consultation and cooperation.
We were determined not to run a campaign where significant differences became the defining memory.
There were numerous strategy meetings, consultations with state branches and discussions with the Shadow Ministry all of which supported the broad approaches taken.
Another collective error was the view that many of our weaknesses could be either solved in the campaign or that Mark Latham’s strengths would overcome them.
We knew we would face an attack over interest rates.
The Government had started its campaign very early in the year.
We knew the Coalition would continue ramping up Mark Latham’s record on Liverpool Council.
Despite significant background research in areas such as Liverpool Council and early efforts to inoculate, such as the fiscal pledge released at the time of the budget, our mistake was to rely too much on a “wait and see” attitude, to wait too long for the campaign dynamics to unfold.
We’ve learnt the hard way that you have to fight every lie, deal with every weakness as early and as often as it takes. As it was once famously put — ‘leave no shot unanswered’.
This campaign has shown that the three years before the election are just as, if not more important than, the 40 long days of the campaign proper.
THE REVIEW
So we did make mistakes, and we can and will campaign better next time.
That’s why our review of the election is so critical.
That’s why a diverse group of experienced campaigners who were not closely associated with headquarters are currently finalising their inquiries into different parts of the campaign.
They will provide advice to the members of the National Executive Committee who will write a report to be tabled and debated at the 23 November meeting of the full National Executive.
It’s a short, tough assessment of the campaign by people who know their stuff and who will not hold back if they believe things could have been done better.
This process is vital to our success. It will provide important insights and lessons for the next campaign.
You’ll notice I’ve devoted much of my time here today to the strategies and dynamics of the campaign, and have largely steered clear of the policy dimension. This is because the shadow ministry has tasked itself with a review of policy.
From an organisational point of view, our priority is to objectively assess the other aspects of our campaign.
Once that’s done it’s just as it’s important to then move on and devote all our energies to building a majority for 2007.
WHERE TO NOW – TWO PATHS FOR LABOR
Lengthy recriminations, blame and the minutiae of who did what to whom will only distract us from our single task — reconnecting with those who have drifted further from us since 1998.
That old adage that disunity is political death is a lesson best learned from the Liberal Party in the 1980s and early 1990s, whose disarray helped sustain the Hawke and Keating governments.
Labor would do well to remember this, and to also remember that the last time the media spoke of the ‘natural party of government’ was in March 1993, only 3 years from the electoral oblivion suffered by Labor in 1996.
People wrote then that Prime Minister Keating was set to rule throughout the 90s!
So enough of this talk that Labor won’t be competitive in 2007 – we will.
But it will take the hard work and dedication of everyone in the organisation, the caucus, and the new shadow ministry.
The first step towards victory in 2007 is to build a credible economic message.
Another important task is to keep the Government accountable for the spending promises they made at their campaign launch, worth an astonishing $6 billion.
In the absence of responsible government spending, and with the impact of debt-funded consumption, we risk higher interest rates under this Government.
Mark’s appointment of two of our most effective performers to the key economic portfolios is a great start.
There’s much to be done to regain the trust and respect of Australians in this and other key areas.
This is a vital task, but Labor shouldn’t shy away from prosecuting what Labor does best – advocating and implementing policies that really do improve the health, education and skills of Australians.
Labor has two options now — the first, to turn inward on ourselves and fade into electoral irrelevance.
The second is to unite and sell a strong message on the economy, on national security and on the provision of the health and education services this country needs.
I’m confident we’ll take the latter approach.
CLOSING COMMENTS AND THANKS
In closing, I’d like to briefly say a couple of things about Mark Latham, who made Labor competitive again in only 10 months in the toughest job in Australian politics.
In that time, Australians sat up and took notice of someone who was prepared to go out and talk directly to people in their communities.
They took notice of a leader who comprehensively outperformed John Howard in the election debate, who reacted to the Jakarta bombing with poise and class and skill, and who gave them a real alternative to the backward looking Howard Government.
Of course we’re disappointed that Labor couldn’t convince enough Australians that change could take place without a rise in interest rates, or without threat to our comparatively strong economy.
But to all those Labor voters and supporters and volunteers out there I say keep the faith, and we’ll keep up the fight.
And to the more than 70 people who worked in the campaign headquarters I thank them for their dedication, hard work and flair.
My respect and admiration for our team has not been diminished by this result. What I said to those people on the Friday night before the election remains true today.
Those people will never be given the credit they deserve for such a terrific effort during an unusually long and difficult campaign.
I want to thank Mike Kaiser, the Assistant National Secretary, who remains one of Labor’s great campaigners.
I’d also like to thank the State and Territory Secretaries for their support, assistance and their cohesion — both before and after the result.
In particular, I’d like to thank Mark Arbib from New South Wales and Erik Locke from Victoria for their support and sound judgement.
One of the only things I agree with from Brian Loughnane’s address here is that you learn more from defeat than from victory.
We lost, we made mistakes, and we’ll learn from them in order to give this country a better government — a Labor government — in 2007.
