RUDD'S CABINET: WINNERS, LOSERS, AND SURPRISES

C O N F I D E N T I A L CANBERRA 001712 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 12/02/2017 TAGS: PGOV AS SUBJECT: RUDD'S CABINET: WINNERS, LOSERS, AND SURPRISES Classified By: Political Counselor James F. Cole for reasons 1.4 (b) an d (d). ¶1. (C/NF) SUMMARY: Prime Minister-elect Kevin Rudd announced a 42-member Australian Labor Party (ALP) Ministry November ¶29. Twenty of the positions are in the Cabinet. Ten are in what is known as the "outer ministry," and 12 are parliamentary secretaries, who assist the minister in the portfolios to which they are assigned. Rudd and his ministers were sworn in on Monday, December 3. While Rudd had said he would choose the Ministry - rather than have it chosen for him by the powerful blocs within the ALP - the ministry broadly reflects the balance between the Left and Right in the ALP. The members of the 20-member Cabinet were not a surprise, but some of their portfolios were modified in unexpected ways. Several incoming Ministers have been given positions in which they have no background. In addition, there are question marks over whether Deputy Leader Julia Gillard will be able to meet the challenges of an expaned portfolio that included Education, as well as Employment and Workplace Relations. High-profile union newcomers Greg Combet and Bill Shorten were appointed Parliamentary Secretaries, although neither job was in an area related to SIPDIS their background as union officials. Maxine McKew, who defeated John Howard for his parliamentary seat in Sydney, was rewarded with a parliamentary secretary position in the Prime Minister's office. END SUMMARY CABINET ¶2. (U) In a departure from his predecessor, PM Rudd expanded the Cabinet, the principal decision-making forum of the Australian Government, from 18 to 20. In order to keep within the Constitutionally-mandated 42-seat limit, Rudd reduced his outer ministry to 22. By modern convention, only the more senior ministers are members of Cabinet. Most Cabinet ministers have one or two junior ministers or parliamentary secretaries who assist them in their portfolio and who are joint administrators of the government department with the senior Cabinet minister. The Rudd Cabinet is: -- Kevin Rudd, Prime Minister, -- Julia Gillard, Deputy Prime Minister, Minister for Education, Employment and Workplace Relations, -- Wayne Swan, Treasurer, -- Chris Evans, Government Leader in the Senate and Minister for Immigration and Citizenship, -- John Faulkner, Special Minister for State and Cabinet Secretary, SIPDIS -- Simon Crean, Minister for Trade, -- Stephen Smith, Minister for Foreign Affairs, -- Joel Fitzgibbon, Minister for Defense, -- Nicola Roxon, Minister for Health and Aging, -- Jenny Macklin, Minister for Families, Housing, Community Services and Indigenous Affairs, -- Lindsay Tanner, Minister for Finance, -- Anthony Albanese, Minister for Infrastructure, Transport, Regional Development and Local Government, -- Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, -- Kim Carr, Minister for Innovation, Industry, Science and Research, -- Penny Wong, Minister for Climate Change and Water, -- Peter Garrett, Minister for the Environment, Heritage and the Arts, -- Robert McClelland, Attorney-General, -- Joseph Ludwig, Minister for Human Services and Manager for Government Business in the Senate, -- Tony Burke, Minister for Agriculture, Fisheries and Forestry, and -- Martin Ferguson, Minister for Resources, Energy and Tourism. QTourism. OUTER MINISTRY ¶3. (U) The l0-member Outer Ministry, who are ministers that are not part of the Cabinet: -- Nick Sherry, Minster for Superannuation and Corporate Law, -- Craig Emerson, Minister for Small Business, Independent Contractors and the Service, and Minister Assisting the Finance Minister on business deregulation, -- Brendan O'Connor, Minister for Workforce Participation, -- Tanya Plibersek, Minister for Housing and the Status of Women, -- Bob Debus, Minister for Home Affairs, -- Alan Griffin, Minister for Veterans Affairs, -- Warren Snowden, Minister for Defense and Science Personnel, -- Justine Elliott, Minister for Aging, -- Kate Ellis, Minister for Youth and Sport, and -- Chris Bowen, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs. PARLIAMENTARY SECRETARIES ¶4. (U) There are 12 Parliamentary Secretaries: -- Maxine McKew, Parliamentary Secretary to the Prime Minister, --Greg Combet, Parliamentary Secretary to the Minister for Defense, -- Bill Shorten, Parliamentary Secretary to the Minister for Families, Housing, Community Services and Indigenous Affairs, -- Mike Kelly, Parliamentary Secretary for Defense, -- Gary Gray, Parliament Secretary to the Minister for Infrastructure, with responsibility for northern and regional Australia, -- Bob McMullan, Parliamentary Secretary for International Development Assistance, -- Duncan Kerr, Parliamentary Secretary for the Pacific, -- Laurie Ferguson, Parliamentary Secretary for Multicultural Affairs and Settlement Programs, -- Ursula Stephens, Parliamentary Secretary for Social Inclusion, -- Anthony Byrne, Parliamentary Secretary to the Prime Minister, and -- John Murphy, Parliamentary Secretary to the Minister for Trade. A BIG BUREAUCRATIC SHAKEUP ¶5. (SBU) Before the election, Rudd promised that there would be minimal disruption for public service departments under a change of government. However, his announcement of the Ministry indicates otherwise: half the cabinet departments will experience major changes in their portfolios. For example, Education and Employment and Workplace Relations will merge into a "super-department" and the Department of Environment would be presumably split to accommodate the new portfolio of Climate Change and Water. Rudd also said he had not given up on creating a Department of Homeland Security, which would take in several departments. GILLARD GETS BOTH KEY PORTFOLIOS ¶6. (SBU) In September Rudd broke with ALP tradition by declaring that he would choose the Ministry and that it would be chosen on merit, rather than by ALP Caucus election after consultation among the factions. As far as Cabinet is concerned, he has stuck with the senior members of his front bench that served him so well in opposition. Generally, they have retained their portfolios although there are a few stand-out exceptions such as Stephen Smith in Foreign Affairs, Julia Gillard in Education and Tony Burke in Agriculture. Gillard has responsibility for implementing the two policies which the ALP has defined itself on since Rudd became leader - the "Education Revolution" and the abolition of WorkChoices. These are monumental tasks. The university sector has expressed concern that Gillard will be too stretched to adequately handle the education part of her brief. In workplace relations, she will have to deal with elements of the union movement that are already calling on the ALP to go further than the policies on which it campaigned, and in education she will have to work with the left-wing teachers' unions which opposed the ALP's campaign pledge to fund non-government schools. UNION HEAVYWEIGHTS GET HALF A LOAF ¶7. (SBU) Greg Combet, the past national secretary of the Australian Council of Trade Unions, and Bill Shorten, ex-national secretary of the Australian Workers Union both Qex-national secretary of the Australian Workers Union both were elected to Parliament from safe Labor seats. Both are nationally-known charismatic union leaders who have been anointed by the media as future ALP leaders. Before the election, there was speculation they would both be appointed ministers. However, it appears that Rudd has done only what he had to do, giving them parliamentary secretary positions in recognition of their former positions but not appointing them to the ministry. Interestingly, neither man seems to have been given a high-profile job. Shorten, who is from Victorian Right Faction, will be parliamentary secretary to E the Minister for Families, Housing, Community Services, and Indigenous Affairs with particular responsibility for disabilities and children's' services. Combet, from the Left, is parliamentary secretary to the Defense Minister, with special responsibility for defense procurement. FACTIONS STILL MATTER ¶8. (C/NF) When he announced the Ministry, Rudd reiterated that factional considerations were not a factor in his decision and he had just consulted "a few wise old owls" in the ALP. However, although he did not take orders from the caucus, it appears Rudd did take the factions into account. It may be no coincidence that the 20 member Cabinet contains the same number proportion of factional representation as the ALP National Executive: 11 Right and 9 Left. Rudd has looked after power brokers such as the "Roosters" which supported Beazley (Conroy, Smith and Swan),Kim Carr from Victorian Left (who supported Rudd against Beazley),and Joe Ludwig (son of the influential Queensland union official Bill Ludwig). Perhaps reflecting South Australia's increased representation in Caucus, Rudd has promoted 30 year-old Kate Ellis, a protege of incoming Senator Don Farrell, the most powerful player in the South Australian ALP. As with the National Executive Committee, the "Independents" - those not aligned with Left or Right - have no representation in Cabinet, reflecting a tendency of the Right and Left to form an alliance to gain a greater share of the spoils. This may partly explain why Bob McMullan, an experienced former Keating Government minister who is close to Rudd, was only appointed a parliamentary secretary. COMMENT: SOCIAL PORTFOLIOS TO THE LEFT, ECONOMIC AND DEFENSE PORTFOLIOS TO THE RIGHT ¶9. (C/NF) As with previous ALP governments, the Right dominated the economic and defense-related portfolios, while the Left received a large number of the "social portfolios" such as Immigration, Family Services, Indigenous Affairs, Education, Housing and the Status of Women. In the last ALP government, there was an implicit trade off between Right and Left - the Left would grudgingly accept the Right's economic reforms while the Right would let the Left pursue its agenda on Aboriginal affairs, multiculturalism and immigration. However, the perceived hijack of the Keating government by the Left's agenda is generally regarded as a key reason for the ALP's defeat in 1996. Rudd, a social conservative who holds unprecedented power in the ALP caucus, should be able to resist the Left's agenda, which includes a rollback of the Coalition's intervention in remote Aboriginal communities. A noted centralizer and micro-manger, Rudd will likely keep his Ministers on a tight leash. MCCALLUM