Phil Coorey is speculating about a Rudd prime ministership.
SUPPORTERS of Julia Gillard are growing nervous about a spring leadership offensive, believing the Prime Minister could lose the majority support of caucus if the introduction of the carbon tax on July 1 and the billions in compensation is not the ”game-changer” the government is banking on.
There has been an increase in leadership chatter recently while Ms Gillard has been overseas, and one of Ms Gillard’s key supporters acknowledged yesterday that backers of Kevin Rudd were ”circling”.
I can’t see how this would assist the ALP in any way. The single issue killing them is the carbon tax – due at the end of the month. It can’t be postponed or modified now without huge political pain. Rudd may have had some chance of success had he succeeded with his challenge in February – but not now.
For Rudd regaining the leadership would be about redemption and revenge. That’s fine; but I’m not sure that would benefit either the party or the electorate.
Then there is a prospect of an early election.
Strategists on both sides also concede that a leadership change would most likely prompt a quick election and this, in itself, was acting as a deterrent for MPs who were wavering but did not relish the prospect of an election this year.
I’ve argued this point before – we should think of the election as an option.
Factors that make options valuable include the time to expiry and volatility. Right now the time to expiry is over two years – the last election was less than a year ago. Nonetheless it looks like the government would be wiped out at any election held any time soon. That is because there is no volatility in public opinion – support for the government is a one-way bet, down. But the government is intending to shock the system – the introduction of the carbon tax might introduce volatility into the mix and then the option to call an election at will becomes very valuable. That combined with the time-value of options suggests that an election (barring unexpected by-elections) will be as late as possible.
Against that is the argument that the longer the government waits to go to the polls the bigger the wipe-out. Maybe – but it doesn’t usually pay to exercise options until expiry. In the meantime Centrebet has the Coalition at $1.15 to win the next election.