A tactical victory !

Julia Gillard's Labor government goes to the Christmas recess with an enhanced majority, thanks to a surprise tactical victory that delivered one extra vote.

Speaker Harry Jenkins made an abrupt resignation from the speakership - and he was replaced by Peter Slipper,  a defector from the Liberals/Nationals.   Jenkins will sit on the backbench and will now be able to vote to support Labor legislation.   Slipper's vote will be lost to the opposition as his acceptance of the speaker's role will neutralise it.

This was a carefully crafted surprise move.   Labor tacticians correctly surmised that Slipper was ripe for turning.   This Queensland National was having trouble retaining nomination to contest his seat at the next election and there had been past acrimony with his party leaders.   Accepting the important role of speaker means a huge increase in salary and prestige for a backbencher - and when he eventually retires and leaves parliament his superannuation will be at the level of a cabinet minister.

Labor now has removed the need to retain the vote of all the independents to pass legislation in the lower house.   That one additional vote will put the cat amongst the pigeons when it comes to the demands they make for support.   Each independent has just lost a degree of power - and it is certain that the Labor numbers people will play off one against another to dilute the demands that most conflict with party dogma.

In particular, it will be interesting to see if there is a resolve slip in implementing the fanatical gambling demand delivered by Tasmanian Andrew Wilkie.

This additional vote also insulates Labor from being " one heart attack " away from a damaging by-election that may have removed it from power.   It has greatly enhanced the prospect that the government will go full term.

The move will certainly lighten the mood of the prime minister, but in reality nothing has really changed.  The government still absolutely needs the Greens to get legislation through the Senate - and it's dismal approval rating leads directly to policies forced on it by the Greens to remain in office.

The real fate of the Australian economy is still determined by external factors - what happens to the Euro and the EU - and whether the Americans can get their act together and fix their debt problems.