Both are related.

Significant shifts in Australian politics have manifested themselves in this result, many of which are not strongly related to the surface political events of the campaign. For journalists to swallow the claim that all would have been well for the Labor campaign had it not been for leaks is to abdicate judicious reasoning. There was a time when skepticism would rightly have been applied to the efforts of a campaign director – such as Karl Bitar in this instance – to absolve himself of blame.

Nothing has been less illuminating than the spectre of partisan-bots like Andrew Robb and Bill Shorten rehearsing their lines, yet again, on Insiders, except perhaps the spectacle of yet another ABC News 24 “special” with a balanced panel of “formers” – ex-Labor and Liberal staffers of whom no one has heard, and who have nothing of interest to say.

The impatience, and haste, to resolve the result into a partisan frame is twinned with risible claims about the necessity of appeasing “markets” who are said to abhor “uncertainty”.

The dim drumbeat of campaign rhetoric and commentary beats its repetitious way on, for want of the anticipated end to the narrative.

As a nation, we should seize the chance to cast aside some tired dichotomies, including those which seek to oppose some parts of the country to others, as if Australia’s soul exclusively resided in one mythical region.

It’s appropriate, then, that we resist the huge amount of pressure that will fall upon the independent MPs to make a hasty decision, whether it comes from the media or from the spurious arguments of triumphalist Liberals.

Fortunately, having watched Tony Windsor, Bob Katter and Rob Oakeshott on the 7.30 Report (where the full video is now available online), I’m confident that no rush to decision is in prospect. We have the chance to sort out many of the dysfunctions of our national politics through this moment, and it’s worth taking time to do that properly.

Elsewhere: Grog’s Gamut on the difference between what we think, what we know, and what we can prove. Salutary reading on the election outcome, and its aftermath.

For those who might not be aware of how this works, if you vote “above the line” (that is, if you put a 1 in one of the parties’ or grouped and ungrouped candidates’ box), then your preferences are allocated according to a ticket lodged with the Electoral Commission.

There is also the option of voting “below the line”, but that can be a bit of an ask where there are up to 84 Senate candidates to number sequentially (I think that’s the largest number this election – in NSW).

There’s a lot in them to digest, but commentary so far has focused on two aspects:

(a) The ALP has given its preferences straight to The Greens in Victoria, atoning for the 2004 debacle which saw Steve Fielding elected;

(b) The Democrats in the ACT have preferenced the Liberals ahead of The Greens. No doubt they’ll not poll well, but in a contest where The Greens have some chance of defeating the incumbent Liberal, every preference is potentially important.

Elsewhere: An Onymous Lefty.

Update: [by Kim] Lots of easily scannable detail from William Bowe at The Poll Bludger.

It’s being billed as an opportunity for Wayne Swan to save Kevin Rudd, which I think is pretty hyperbolic (and it’s always interesting to contrast the journosphere’s attack on the government for hyperbole with their own commentary). But there is no doubt that what’s anticipated to be a “no frills” statement is now of more political importance given what’s been happening recently in the polls. While the concept of the “Budget bounce” is now somewhat discredited – given the public disinterest in the latter years of the Howard era in responding positively to the ritual handouts – the ALP will certainly be hoping that tonight is the first step on the road to political recovery.

Wayne Swan will be hoping both to cement Labor’s reputation as economic managers (and the current turmoil in world markets and in the Eurozone will no doubt be used as a point of contrast with Australia’s fiscal and economic position) and to use the opportunity of a set piece speech which has a large unmediated audience to convey a message which will concentrate minds on the case for the Government’s return. So there probably will be no huge surprises, but it’s being tipped that some major announcements in skills and training will supplement what we already know about the Government’s intentions in health and super and other policy areas.

The Budget will also shift the dynamics of the political debate, leaving the opposition with no further wiggle room on policy and finance, unable any more to say “wait til the Henry Review and the Budget”. The former excuse has also run out of steam, with the previous suggestions that the opposition itself would use a resources rent tax as a pot of gold for promises falling victim to their jumping on the cynical mining industry bandwagon (along with the corporate cheerleaders among Labor premiers).

Similarly, the Government will be trusting that an improved fiscal outlook will defang a lot of the rhetoric about “debt and deficit”, and enable Labor to get back onto the front foot. A virtue will be made of austerity, with Swan no doubt about to claim that he’s eschewing the big ticket spending that Costello/Howard budgets sought to lure votes with in election years.

It will be interesting to see whether Wayne Swan, as I suggested he should, also addresses the question of what the Government can do to maintain living standards for electors, and in this context, the personal tax cuts and lifting of thresholds and the Low Income Tax offset may feature prominently.

Tony Abbott will be under great pressure in his reply on Thursday night, because we’re about to get to that part of the electoral cycle where the negative message has been pushed about as far as it can go, and he has to come through with some sort of idea of what sort of Government he would lead.

There’ll be a surfeit of instant commentary, no doubt, and you might like to take a look at Crikey’s live blog, whose cast of thousands includes John Quiggin, or the Twitter hashtag #budget. Ben Eltham also has a worthwhile preview at New Matilda.

I’ll save my further thoughts on the Budget for a more considered look some time over the next few days.

Elsewhere: John Quiggin in Crikey [paywalled].

Update: Peter Martin says that Swan will announce a return to surplus in 2012-13.

[Update: Via The Poll Bludger, it's 51-49 in the Coalition's favour. And it's the first time the Coalition has been ahead on the 2PP in Newspoll since 2006.]

Note, though, that Essential Research had a smaller dip in the Labor vote (53-47 in Labor’s favour on the 2PP, or basically where the votes were in the 2007 election) with a bleed of primary votes to The Greens. That may or may not have a lot to do with the CPRS backflip.

If we make the assumption that the ALP is heading south in public opinion, and Morgan also had its tightest result since 2007, then that really raises the question of whether it’s better to take a hit on anything that might be controversial before the campaign begins, or whether backflips leave voters believing that the government is scrappy and incapable of standing up, or standing, for anything much. Your guess is as good as mine, but I don’t think it’s controversial to say that the health/economy only strategy isn’t off to a fabulous start, whatever you think of the merits or demerits of the latest political bonfire of the policies.

In any case, I don’t think any new new media narrative about the wonders of Abbott will be sustainable. It’s pretty clear that Labor’s slide is of Kevin Rudd’s own making. Whether that inoculates him against Abbott is another question entirely.

Elsewhere: Possum.

Update: Just to underline and expand on a point or two I made in comments:

(a) The way Newspoll allocates preferences is a function of the flow from the last election, not a question put to poll respondents. So these 2PP numbers would imply a direct bleed of ALP primary support to the Coalition or “Others”, not just to The Greens, because that normally doesn’t change the 2PP much, or at all.

(b) I doubt the ETS backflip per se makes all that much difference to many voters. It would be more the impression of backflips and broken promises, and I don’t think Rudd has effectively shifted the blame for sidelining the CPRS. It’s a matter of Rudd looking like “just another politician” and breaking the bond of trust he’d built up through appearing to be more in touch than Howard in 2007, through emphasising keeping promises, and through his leadership in the GFC.

I suspect that the smokers’ tax and the childcare centre backflip mean more to voters who don’t pay much attention to political news, as that stuff cuts through, and affects a lot of people in their daily lives.

(c) It’s also worth remembering, as William Bowe pointed out in comments on The Poll Bludger thread, that Newspoll and Nielsen have the most accurate methodology (phone compared to face to face or online) and also a good record in immediate pre-election polls. Having said that, I suspect this one is exaggerating the swing away from Labor, but there’s enough evidence from the other recent polls to suspect there has been one.

Update: The tables are online.

Labor’s on 35 (down 8), Liberals on 38 (up 1), Nationals on 5 (up 2), Greens on 10 (steady), Others on 12 (up 5).

A number of different ways of looking at that:

(a) Disillusioned Labor voters are parking their vote with a non-committal response (“Others”);

(b) The big drop in the Labor primary, the rise in the Nats’ primary and the stasis in The Greens’ suggests sampling error to me. But I still think the evidence of the three polls together shows drift away from the ALP.

(c) But another way of looking at this is to reflect on the previous polling volatility after Abbott got the gig, and to see it as bouncing around above the approximate line of the 2007 election result among voters who are the least attached to their partisan preferences.

On Preferred PM and in the approval ratings, Rudd’s taken the proverbial hit, but Abbott hasn’t benefited much. That tends to confirm my belief that Rudd’s brought the decline in the Labor vote on himself.

There’s also some questions on issues, with the most interesting being a significant narrowing on the question of which party can best handle climate change, most of which is accounted for by a drop in Labor’s credibility.

Update: As Mark just said on Twitter, the issue really is whether Rudd’s damaged his own credibility so much that the “clear the decks before the budget” election strategy itself suffers.

The Liberals have one sensible option, and one only – fold their hand, and pass the thing.

Kevin Rudd’s strategy in 2007 was to minimise disagreement with John Howard except where a contrast on key issues was favourable to Labor. Abbott should learn the lesson. If he chooses to go down the oppose everything path he’s so far adopted (despite a slight shift of rhetoric earlier on health), he hands Rudd two advantages: the ability to paint him as a negative naysayer with no substantive policy alternatives, and continued focus on health all the way to the election – just where Rudd wants it to be.

It’ll be interesting to see which way Abbott goes. I suspect it may well be the negative road – because his leadership appears to have been premised on a bunch of angry Liberals railing at Malcolm Turnbull for having the gall to support the government when he thought it warranted. Naysaying is the default reflex of the opposition parties at the moment, but primal cries of rage are not election winners.

*As Bernard Keane points out, neither WA’s holding out nor the 1999 agreement on the GST poses a legal obstacle to the implementation of the health reforms. So there is a deal. The only obstacle is the Senate.

I linked in an earlier post to an article reviewing the precedents for a negotiated arrangement for support of a Liberal minority government. But that doesn’t exhaust the range of possibilities. The intricacies of the Hare-Clark system mean that it’s still possible that the Liberals will end up with 9 rather than 10 seats, which would presumably give Labor first call on forming a government (the Westminster system never really having been designed – even in semi-proportional incarnations – to recognise votes rather than seats as conferring legitimacy).

It’s also possible that both major parties could refuse to negotiate with The Greens, leaving the onus on them to support or oppose confidence motions, and supply. That might promote ‘uncertainty’, but it would also set an effectively higher bar for an election, because it could be represented as arbitrary or capricious in the absence of written stipulations seeking to define what would be the grounds for removing confidence.

Labor may also be happy to sit in opposition, hoping that the tensions a Liberals/Greens arrangement might produce would give them an electoral advantage as against both parties at a regularly scheduled or early election, should the accord not survive.

And then there’s Richard Farmer’s take, based on the proposition that the result represents an anti-Liberal majority both in votes and seats. He argues that many Greens supporters would be unhappy with propping up a Liberal government, and that such a decision would cause tensions within the party:

Yet what if the Greens unilaterally declare they would guarantee a Labor Government the passage of supply and thus a basic stability to administration but would not do so if there was a Liberal Party Premier?

Such a thought should enter the McKim mind because the overwhelming majority of those that voted for his party are to the left of the Tasmanian Labor Party, let alone the Tasmanian Liberal Party. They surely did not vote Green so that there would be a truly conservative administration. If the Greens elected to Parliament anoint conservative rule for the next four years, there will be much disappointment among their supporters. The risk of losing support next time around would be considerable.

That makes me think this is not yet the open and shut scenario that is being so widely predicted.

No one believes in it.

They’ve come to this pass because of the momentum of the twin drives to dethrone Malcolm Turnbull and the internal politics of climate change denialism in the Coalition and among the so-called ‘Liberal base’.

Abbott’s ‘direct action’ is supposed to provide a point of contrast between bike-riding muscular Tony (and don’t for a minute think all these photos and all the tv vision of him in togs and exercising is coincidental) and that blancmange of a bureaucrat, KRudd. But the Coalition is stuck with the windy rhetoric that none of them actually care for – either because they don’t believe climate change is real, or because they know it is, and this is an epic fail.

That’s another reason why the contradictions in this thing won’t easily be papered over, and selling it will be very difficult.

Writing in The Guardian, Seamus Milne has an interesting piece on the failed coup attempt against Gordon Brown last week. Theatrics aside, he sees it as a contest for the future of the party, with the Blairite forces trying to enforce the New Labour line through a proxy contest over personalities and electoral tactics:

But by exploiting the coup attempt to demand a change of direction, and making the prime minister’s closest ally, Ed Balls, their fall guy, the cabinet’s anti-Brown majority has unmistakably called time on the Keynesian-inspired and progressive tax measures that have won public support but caused such alarm in the City, Treasury and media.

Milne goes on to argue that the (now) Brownite position makes more economic and political sense.

There’s a big irony here, given that New Labour’s success derived from an argument that the Labour party had sacrificed electoral success on the altar of ideological purity.

There’s also an Australian parallel, as the Coalition appear determined to avoid competing for the centre at any costs, all in the name of ‘defending the legacy’ and ‘differentiation’. So, it seems that the tendency for parties to curl up in an ideological ball in the face of defeat afflicts those of the right, as well as those of the left.

*In theory, Rudd doesn’t have to go to the polls til April 2011.

Elsewhere: Ben Eltham on the year ahead in politics.