You have to feel sorry for Kevin Rudd. Eight months into its term of office, and despite an initial ‘buzz,’ his Labor government is having difficulty gaining traction on key policy issues.

This is not entirely the government’s fault. For instance, Rudd campaigned strongly on the issue of economic credibility. This was a “big ask” because, in Australia, Labor governments are generally regarded by the electorate as spending and taxing governments while Liberal/National coalition governments are popularly thought of as prudent economic managers.

Yet, Rudd has had the bad luck to take office on the eve of what some fear is a coming global economic tsunami. Even the traditionally staid Chancellor of the British Exchequer, Alisdair Darling, has recently offered dour warnings of economic hard times to come when he was quoted in the Guardian as saying that the times we're facing “are arguably the worst they've been in 60 years. And it's going to be more profound and longer-lasting than people thought."

Rudd, therefore, came to government applying the economic handbrake in response to fears about inflation and framed the government’s first budget accordingly.

Although inflation has been largely driven by the combination of world oil prices (which the government can do nothing about) and a rampant domestic minerals industry (which has generated huge government revenues), the Opposition has worked hard to brand the Rudd government as the root cause.

Frustratingly, although elected in a landslide in the November 2007 election, Labor is forced to govern as though it were a minority government. To understand this seeming contradiction, you need to understand the nature of parliamentary government Australian-style.

Australia, like Canada, has a bicameral federal parliament. “Bicameral” is a ten dollar word for “two houses”–upper and lower. The lower house is the House of Representatives–the direct analogue for Canada’s House of Commons. The upper house is the Senate which, unlike Canada’s Senate, is an elected body and operates, ostensibly, as a house of review.

Senators serve for six years and, owing to a rotation system, half retire every three years. Usually, only half of the seats in the 76 seat Senate are up for grabs at a general election.

In addition, the application of both proportional representation and preferential voting (which allows voters to number candidates in order of preference) in half of Senate elections increases the likelihood of minor parties and independents being elected.

To add spice to the mix, Australians have traditionally exercised what some refer to as “electoral insurance” by voting for one party in the lower house and another in the upper house, or voting for one party federally and another in state/territory elections.

In recent years it has more often than not been the case that governments have had to rely on minor parties or independents to pass legislation. The balance of power role is much sought after by senatorial aspirants outside the major parties.

Occasionally, governments enjoy a majority in both houses—as did John Howard’s Liberal/National coalition government for a large part of his last term of office. It was an experience Australian voters did not want to repeat.

Although Labor holds a commanding majority in the lower house—82 seats out of 150—it holds only 32 seats in the Senate to the Liberal/National coalition’s 37. Labor must depend, therefore on the support of five Green Senators, one Independent and one member from the Family First Party—a nominally Christian party with a socially conservative agenda.

So it was that the first of the government’s legislative initiatives was defeated this month in the Senate despite having the support of the Greens and Independent Senator, Nick Xenophon, when Family First Senator Steve Fielding voted with the Opposition against a Bill to increase excise tax on luxury vehicles valued over $57,000, resulting in a cost to the budget of over $500 million.

It seems increasingly likely that the Senator-on-training-wheels will also oppose other measures requiring legislation, including a proposed increase in excise tax on so called alco-pops and proposals to raise the income threshold beyond which a special tax is levied on those who choose not to take out private health insurance.

The former measure is ostensibly a response to teen binge drinking and aimed to curb consumption of ready-to-drink alcoholic confections much favoured by younger drinkers, while the latter seeks to soften a punitive measure introduced by the Howard government to force Australians into the private health care market.

Other key elements of the government’s policy agenda are similarly threatened, including a future emissions trading scheme and changes to the taxation system.

The sad fact is that, owing to the arcane intricacies of Australia’s voting system, the government is being held to ransom by a Senator who entered the Parliament with only 2,500 primary votes. Go figure.

The Rudd government has been criticised by the Opposition for preferring symbolism over substance, for commissioning reviews rather than initiating bold policy and for playing to the news cycle rather than offering leadership.

Although one suspects these criticisms are beginning to bite, the reality is that it is difficult to take bold action when a government cannot count on having its legislation passed in Parliament. Rudd did set out a big agenda in his bid for government, but, under the circumstances and given the inherent complexity of some of the issues the government is confronting, he is forced to hasten slowly.

Furthermore, while the Howard government trafficked in the politics of division and framed issues in stark, often simplistic shades of ideological black and white, the Rudd government has chosen a more deliberative path.

Although some might portray this as dithering, many appreciate a more reflexive approach to policy development. The government has, therefore, commissioned a number of studies, committees of review, green papers and white papers to develop and canvass policy options for tackling complex issues, such as emissions trading.

This is causing some disquiet in the public service, not only because the new government has been very demanding, but also because of the number of stakeholders in the mix and the government’s paranoia about possible leaks–probably inevitable under circumstances where public servants are sometimes unclear about what the government wants and, in some cases, prevented from sharing information about possible impacts of policy proposals on other portfolios.

Rudd also promised to make federalism work. Canadians appreciate that this is no easy task. In Australia, the federal government collects all the tax and the states and territories deliver most of the services, many of which are delivered via intergovernmental agreements through which the federal government provides funds to the states for specific purposes.

Many policy domains in which the federal government wants to make an impact–such as in water, health, education, infrastructure and indigenous health–require the cooperation of the state and territory governments.

As luck would have it, when Rudd took office, Labor governments were in power in every state and territory. Superficially, this boded well for a new era of federal/state cooperation. In reality, the bonhomie masked fairly mercenary agendas on the parts of both levels of government, never mind party affiliations.

The luck may be about to end. All of the state and territory Labor governments have been in office for two or more terms and all are feeling the weight of incumbency. On August 9, the Labor government in the Northern Territory was narrowly returned and in Western Australia it seems unlikely that Labor will be able to form government after its September 6 election.

Other states and territories are coming up to elections in the next year or so–all of them long term Labor governments experiencing some degree of political decrepitude. Their only real hope is the fact that their Opposition counterparts are similarly inept.

Still, the political stripe of the different levels of government need not impair a constructive working relationship with the federal government so long as the states and territories stand to benefit from cooperation. In fact, being on opposite sides of the political divide might make tough negotiation easier.

For the moment, Rudd’s government is being given some political cover by leadership uncertainty in the Liberal Party, with the former Howard government Treasurer, Peter Costello, silently stalking the current leader, Dr Brendan Nelson.

Also, both major Opposition parties performed poorly at two recent federal by-elections with the Liberal Party given the fright of its life by the Greens in one electorate and the Nationals being roundly thumped by an independent in another.

In any case, the Liberal/National coalition is still wearing the odium of Howard years–at this stage, many in the electorate still feel as if they’ve woken from a bad dream. Few are longing for a golden age under Howard–unless, of course, interest rates start trending upwards again.

In the meantime, political pundits are weighing the likelihood of Rudd calling an early election and spilling open both houses of Parliament in what is called a “double dissolution election.”

This is a comparatively rare event (the last double dissolution election was in 1983). It requires a trigger, that being a failure to twice pass a bill in the Senate.

The political risks are high–the electorate may well punish a government that brings them early to the polls, as seems to have been the case with the general election just held in Western Australia.

It that case, the incumbent Premier called a snap early election when it thought the Opposition was on the back foot. However, the strategy backfired badly and has brought the Liberal party within reach of forming a coalition minority government.

Whether Rudd will take that risk no one knows. He has not, so far, demonstrated a penchant for impetuosity, but he does have a program and he wants to implement it.

An intransigent Opposition in the Senate together with a host of minor parties and independents all seeking to advance special interests are standing in the way of that program.

If Rudd wants to make substantive progress in his first term, that is a log jam that will have to be broken, by negotiation if possible, or, if necessary, by going once again to the people.