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Governments and political parties go wrong when there idiological beliefs become inconsistent with the well being of the people they represent.In the end, their actions are as they are, the effects of those actions indicate their motives, the origin of those motives are a secondary question .
In the case of Federal Labor, their primary idiological belief is power at any cost. Like NSW Labor, they will pay a heavy price at the ballot box and the longer they are in power, the bigger the economic price Australia will pay. Many Labor politicians would realise this, but like the Titanic afer it hit the iceberg, their internal culture is such that they can't stop the ship from sinking.
John Howard was personally not much different in the leadup to the 2007 election. He was addicted to power and the culture within the Coalition was such that nothing effectively could be done.