News National How Labor went from dreaming of victory to staring at misery in the 2019 election Updated:

How Labor went from dreaming of victory to staring at misery in the 2019 election

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On the Monday night before the election, the Liberal Party knew something was up.

It was the moment that voters in an LNP focus group in the Brisbane suburbs started to parrot the slogan that Scott Morrison had delivered endlessly during the campaign.

Liberal Party director Andrew Hirst, his deputies Simon Berger and Isaac Levido had assembled swing voters from the ALP-held seats of Lilley, Oxley and Moreton.

Just six years ago Berger was the Woolworths executive forced to resign after it was revealed he donated a “chaff bag” jacket to a Liberal Party auction, a reference to Alan Jones’ suggestion that Julia Gillard be put in a chaff bag and thrown in the sea. Now, he had a ringside seat to an historic Liberal victory.

The Liberal strategists were still desperately trying to find new seats they could grab in Queensland, to make up for losses in Victoria.

Turns out, they had found them.

“Labor. It’s the Bill Australia can’t afford,” the voters said.

Scott Morrison’s message on Labor’s negative gearing tax plan and “retiree tax” had been delivered, loud and clear.

The voters were repeating the slogan in the Liberals ads – unprompted.

As counting continues, the Labor Party is just hanging on in the seat of Lilley in Brisbane’s northern suburbs, after being hit by a big anti Labor swing.

It has been held by Labor since 1998.

The Bill Shorten we know is the Bill Australia can't afford.

The Bill Shorten we know is the Bill Australia can't afford.

Posted by Liberal Party of Australia on Sunday, April 7, 2019

No guarantees

Scott Morrison wasn’t the only political leader who believed in miracles.

On the 6am leadership group phone hook up the day before Saturday’s poll, Bill Shorten was still convinced Labor could win the election.

Everyone on the phone hook up was still reeling from the death of Labor legend Bob Hawke, the night before.

Instead of focusing on the final day of campaigning, Shorten was preparing to ditch campaigning in Queensland marginal seats to visit Hawke’s widow Blanche D’Alpuget in Sydney and return to Melbourne.

Former prime minister Bob Hawke met with Bill Shorten just days before his death.

But in NSW and Queensland, fears mounted the $60 billion dividend imputation tax grab was hurting Labor. Scott Morrison called it the “retirees tax” despite the fact that pensioners were exempt.

As the ALP national secretary Noah Carroll outlined the polling on Friday morning – clearly “patchy” and not showing a clear victory, the Labor leader was convinced that Victoria would come to the rescue and deliver seats.

Carroll couldn’t guarantee a win. Shorten was convinced he could get there.

The published polling, including Newspoll, still had Labor in front on a 51 to 49 per cent basis.

That tipped the balance for some that Labor could get over the line.

ALP national secretary Noah Carroll could not guarantee a win.

But the polling results were all over the place. The ALP’s seat by seat polling never showed a clear majority.

A former Victorian official, Carroll was an experienced ALP strategist but had never run a federal campaign.

And he was fighting one of the most stunning upsets in Australian politics in 30 years, since John Hewson lost the unlosable election in 1993.

Mixed messages

It became clear that the polling, by John Utting, was not the only worry.

Bill Shorten had not run a perfect campaign, slipping up over superannuation taxes early. Then there were concerns about the cut through of ad man Darren Moss’ campaign.

Unlike Labor’s ads, the slogan for the Coalition’s most powerful message was actually developed by the Liberal secretariat, not an ad agency. The Liberals’ ad agency, the Adelaide based KWP!, had already done the ads for the SA and NSW state campaigns.

Labor’s ads, meanwhile, were not connecting with voters.

“Bill kept moving from one brain fart to another,” said a Labor source.

“Couldn’t stick to a message. Was it tax cuts for the top end of town? Or was it chaos and division under the Liberals?”.

As another ALP source put it: “They found the negative on us. We never found the negative on them.”

It was evident by this point that not everyone was convinced of a Labor victory.

One man who worried was former prime minister Kevin Rudd. He was concerned about how the ALP was travelling in Queensland. But he may have felt “unable” to express a strong view to Shorten’s inner circle according to confidantes, because they privately mocked him.

Another Labor figure concerned was Labor’s president Wayne Swan, another Queenslander.

A former Queensland ALP party secretary he understood Queensland intimately but was “locked out” of the campaign according to some officials and “treated like an old man” by the Melbourne crew.

Mr Swan told The New Daily this observation by others was not his own perception.

“That’s not accurate. I’m not going to get into litigating the campaign. My job is to bring the show together after this defeat,” he said.

Labor president Wayne Swan denies he was locked out of the campaign. Photo: AAP

The Adani issue was a case in point. In February, when Victorian Labor frontbencher Richard Marles said the collapse of thermal coal — which earned Australia $25 billion last year — would be “a good thing”, Queenslanders were horrified.

But Bill Shorten was convinced the votes he needed would come from “progressive” Victoria. They didn’t.

Critics now say Mr Shorten had picked people who “weren’t pushing back”. The office was a tight clique. And while Kevin Rudd was criticised for the so-called ‘gang of four’, a kitchen cabinet of senior ministers that made decisions without talking to cabinet, there was also criticism of Mr Shorten’s tight inner circle of ministers.

The Labor leader was well regarded as a consensus leader who brought the team together. But his consensus cabinet style also meant everyone in Labor’s shadow cabinet owned the decision on negative gearing and franking credits.

Union polling also showed the ALP could fall short, that victory was not assured.

Nervous troops

ACTU secretary Sally McManus was deeply worried Labor needed to lift its vote in the final week.

Labor’s deputy Senate leader Don Farrell was also worried. He was predicting 77 seats, just enough to get over the line. But it was so close and the undecideds in Labor’s polling was so large.

The weekend before the election many within the ALP were jittery. NSW ALP secretary Kaila Murnain was doing focus groups for the ALP.

ACTU secretary Sally McManus was concerned before polling day. Photo: AAP

The “retiree tax” message was hurting the campaign in NSW. Officials and volunteers had just fought the state election. The seats Bill Shorten needed would have to come from Victoria or Western Australia.

As the results came in on Saturday night, booths with over 65s were turning against Labor with big swings.

Whispers started to emerge during the final week that the campaign was “dysfunctional”, “secretive” and disorganised.

It was starting to look like Malcolm Turnbull had rope-a-doped the Labor Party, convincing Bill Shorten and Chris Bowen that they could take such an ambitious policy agenda to an election with an unpopular leader and win.

But Bowen and Shorten were convinced the taxes were necessary to fund Labor’s ambitious spending on health and education.

It was Bowen who had pushed and prodded Shorten to announce the negative gearing reforms at the NSW ALP conference over the Valentine’s Day weekend in 2016.

Labor feared Malcolm Turnbull would run Bill Shorten down and he needed a big target policy to take the fight to the Liberals.

And having survived the 2016 scare campaign on negative gearing, Labor added more new taxes. This time hitting retirees.

The dividend imputation tax refunds are unique to Australia and like negative gearing were a reform many economists urged the government to consider for years. Closing the loophole was Chris Bowen’s biggest budget saving.

It was worth a stunning $60 billion over 10 years. That was double the $30 billion Labor saved from reforming negative gearing. Labor exempted pensioners after an early backlash. But many still believed they would lose their franking credit refunds anyway.

There were sound reasons to pursue these reforms. For years Treasury and economists had called for reform of negative gearing laws which distorted the property market.

Labor’s plans were also grandfathered so they did not apply to existing investors. New investors would still be able to negatively gear new properties.

But, as the housing market took a dive was now the right time to introduce the reform?

It was a decision that also leaves Bowen damaged and unlikely to emerge as a credible candidate for the leadership given his deep involvement in the tax agenda that destroyed Bill Shorten.

Out of luck

A former Liberal Party director, Scott Morrison delivered the sort of performance he would have wanted from a leader when he was running the NSW division.

The Liberal Party polling turned out to be far more accurate.

As a former party director, Scott Morrison knew how to run a slick campaign. Photo: Getty

The Coalition pollsters had the party ahead in the Labor-held seats of Bass in Tasmania, Longman and Herbert in Queensland and Lindsay in New South Wales.

The risk was that there would be seats that might swing harder in Victoria that they were not expecting and not tracking. That was why the Liberals turned to that focus group of Queensland votes on the Monday night before the election.

Liberals say Scott Morrison’s comeback in the polls started with the April budget and their results started lifting from there.

For the Labor Party the result is utter devastation.

“Everyone is trying to make a why exist because of the what,” explained an ALP source.

“But the rules of campaigning were turned on their head last night.”

For his entire political career, Bill Shorten had always been lucky.

But on Saturday night, the Labor Party’s luck ran out.