Australia’s prime minister, John Howard, boasts the record of being the longest-serving elected conservative leader in the world. However, an election due in late 2007 is likely to see his Government’s rule come to an abrupt end, with pundits predicting his defeat at the hands of a resurgent Labor Party under the leadership of Kevin Rudd.

Currently riding high in the polls, Rudd is an articulate young politician who was not even in Parliament at the time of the government’s election, but has managed to transform the party’s prospects after almost twelve years in the outback. For nine months, polls have consistently shown growing support for the Labor party under his leadership.

This is so significant because John Howard has dominated politics more than any politician of his generation. The key to his victory in 1996 was to split the electoral coalition on which the Labor party relied so heavily, appealing to socially conservative ‘aspirational’ working-class voters, typified by the constituencies of Western Sydney, with jingoistic and populist messages. Leading a revolt against the elitist ‘latte-set’, he led opposition to ‘politically correct’ ideas like multiculturalism, Aboriginal land rights and republicanism. His canny reading of the electorate and ability to outmanoeuvre the Labor party ensured victory for his conservative coalition at four successive elections.

So what can explain the recent shift away from the Howard Government? Is this a genuine realignment of the Australian political consensus, or simply a sign of an electorate growing tired of a sputtering fourth-term government?

After almost twelve years, there is always that factor, but this fails to explain the depth of dissatisfaction with Howard. The economy continues to perform well, and Australian troop deployments to Iraq and Afghanistan have been too small to cause much political anxiety. High-profile scandals, such as that involving the Australian Wheat Board paying kickbacks to the former Iraqi government, have had minimal impact on the polls.

There are three significant factors can be seen have contributed to the Howard Government’s waning popularity:

• Industrial relations: A pet issue of the PM since the 1970s, Howard used his 2004 victory to pursue radical reforms aimed at destroying trade unions, weakening safety nets and promoting individual bargaining between employers and employees. With unemployment at historic lows, voters have rightly recognised this as a case of ‘political over-reach’ and offensive to the traditional Australian notion of a ‘fair go’.

• Housing and interest rates: After successfully campaigning on a record of low interest rates in 2004, Mr Howard has been damaged by several consecutive increases by the Reserve Bank. With most households heavily indebted, there is growing concern over housing affordability.

• Climate change: A long-time climate change denier, John Howard has been wrong-footed on this issue. Joining the US in refusing to ratify the Kyoto Protocol, Australia is bearing the brunt of climate change. The worst drought in recorded history continues to cripple agriculture and leave cities and towns with dwindling water supplies. Howard’s climate scepticism is seen as a throw-back to the past.

But then, what of the Labor Party? Exploiting weaknesses in the Government is one thing, but what must Labor do to shift the political battleground onto progressive territory?

The first task for Kevin Rudd is to weave the specific concerns of the electorate into a ‘progressive narrative’ that establishes a clear vision for the country. One possible agenda is ‘quality of life’, covering issues such as housing affordability, environmental sustainability, family-work balance and childcare. The pitch to the electorate would mention protecting an Australian ‘way of life’. One-off, populist ‘eye-catching initiatives’, by contrast, risk playing to the conservative trump suits.

Kevin Rudd’s second task is to rebuild the electoral coalition that Howard so effectively splintered twelve years ago. Debate about whether the Labor Party should move to the left or right, after working-class or middle-class votes is largely fruitless. Labor needs both the suburban working-class, and the inner-city professionals to govern, and should be focused on building a consensus that encompasses a diversity of interest groups. Again, a progressive narrative might be one strategy for achieving this.

And Rudd must be bold. The temptation for Labor is to take no risks and allow the government to succumb to its own ineptitude. But Howard is a wily operator and has clawed back from the brink before. The mistake of his opponents has always been to underestimate his tenacity. In order to succeed in its bid to reclaim power, a Rudd-led Labor Party must be prepared to take calculated risks in policy development and set an ambitious agenda. If it can achieve this, the scene looks set for Australia to return to the social democratic fold.