The Government, despite its recent successes, is likely to suffer a political backlash.
Despite landing an unprecedented clean-sweep of its legislation through the Senate, it is the Coalition rather than Labor which faces the greatest uncertainty and vulnerability over the coming 12 months.
The Howard Government ended the first year of its fourth term in a seemingly unassailable position, having bagged the sale of Telstra, its workplace relations changes, unprecedented security laws and the abolition of compulsory student unionism.
The strategy inside the Government was to use its unique majority in the Senate and the first year of the three-year electoral cycle to get all the unpopular or controversial legislation out of the way.
Prepared to take a “hit”
It was prepared take a “hit” in the polls in the name of “good government” and reform. Then it could get on with the real business of destroying Labor and gradually winning back the confidence of the voting public.
But there is every chance things will deteriorate further for the Government over the coming year.
Some of these factors the Government admits are unavoidable; others it believes that, though initially bad, will eventually turn out a political positive; and others on which it is simply blind.
First, the Labor Opposition, while led by Kim Beazley, is likely to improve this term.
Certainly, after four straight losses, Labor will not fall for any of its previous strategic blunders.
Labor will not electrify, but has regrouped after the disastrous Latham experiment and is now interested in solid, conventional policy work.
After a decade out of office and repeated catastrophic misunderstandings of the electorate, Labor is at last rethinking its fundamental policy settings.
This does not mean Kim Beazley’s team will get it completely right, but simply that John Howard (or Peter Costello) will not have the luxury of fighting a wedged, divided and confused Opposition.
Labor also finally has something to distinguish itself from the Coalition – industrial relations.
Which brings the second factor – the fact that the Government’s late 2005 legislative clean sweep is just the beginning of its problems rather than the end.
The vast majority of Coalition MPs believe that IR will be a re-run of the GST – initial controversy during the phase-in, then largely forgotten as the benefits of the reform are acknowledged.
The problem is these very same MPs have forgotten that the GST cost them a dozen seats in 1998 (and almost government), and that it might have cost them more in 2001 had it not been for the Tampa.
But it is possible that IR could be worse than the GST because every workplace problem, of which hundreds occur each week across Australia, will be blamed on the new laws.
The truth is no one can say with certainty who will be right on how the IR laws play out – the doomsayers on the Labor side or the Pollyannas on the Government side.
But one thing is certain: the Howard Government will have an entirely new enemy which will make it its business to keep IR a politically hot issue right up until the next election – the ACTU.
Telstra is another similar problem for the Government because there will be continued opposition to the privatisation up until the day it is floated – and lingering resentment afterward.
Admittedly, given the current share price and the strange management strategies of the US-controlled leadership, this may still be some time off.
Economically, there are warning signs with possibly higher interest rates, falling house prices, and Treasury telling everyone who will listen that the commodity boom cannot last.
The Government is also going to suffer from a backlash from its Senate dominance.
At the last election, Prime Minister John Howard promised to use his majority carefully and not abuse it. Strangely and stupidly, it has done the opposite.
Shut down debate
In recent months, the Government has trampled over the all-important Senate committee system, shut down debate, and adopted a winner-take-all mentality to its legislative program.
Rather than bully and intimidate Senator Barnaby Joyce, it would have been far better for the Government to take the occasional loss in the Senate.
Which brings the third major factor – division.
While Labor is more or less resigned to fighting the next election with Mr Beazley, the Coalition has to face not only the inevitable Howard/Costello rivalry, but also growing animosity between Nationals and Liberal MPs.
Many Liberal backbenchers deeply resent the power and influence the Nationals have, and this has been exacerbated by Senator Joyce’s cavalier attitude to Coalition unity.
After 10 years in office, expectations of advancement, preferment and other perks become normal and resentments begin to burn deep.
While John Howard continues to display extraordinary verve and energy, other ministers are tired and have run out of ideas.
In short, a Government, which on the surface appears to be on top, is in fact suffering from severe complacency, the suggestion of arrogance, and a raft of difficult political problems ahead.