There’s a lot of talk of reform at the moment, nearly all of it from the government. It’s almost like Labor is trying convince itself it’s a genuine government.

Yesterday morning the Prime Minister, accompanied by the Treasurer and the Health Minister, called a press conference to announce legislation giving effect to Kevin Rudd’s health and hospitals package. “Fundamental reform” and “major reform” were a couple of the ways it was described. The reforms will indeed provide a useful incentive for greater efficiency in health funding, but the package was originally sold as one of the “most significant reforms to the Australian federation in its history”. It might have been that if it was a full takeover of health funding, rather than leaving us in this policy halfway house of 60% of acute funding.

Julia Gillard devoted the second half of an AIG dinner speech last night to reform. Talking about “walking the reform road”, “reform a seamless robe”, an “historic reform project”, Gillard bid fair to be a true successor of the Hawke and Keating governments. To help, she conjured up a serious threat to economic reform, that “the reform consensus is now under serious threat” from Andrew Robb, Joe Hockey, Kristina Keneally and Barry O’Farrell.

Criticising Barry O’Farrell over the Murray-Darling Basin might have been fair enough, except it was only a couple of hours since Tony Burke had distanced himself from the Murray-Darling Basin Authority, on the basis that somehow it had not been sufficiently cognisant of the social and economic impacts of reduced water allocations. As Arlene Harriss-Buchan of the ACF pointed out, that was a strange conclusion to reach given the Authority had limited itself to considering a reduction of no more than 4,000 GL on the basis that any greater a reduction — as the return of up to 7,000 GL may be necessary to ensure the system’s long-term viability — would not have been consistent with social and economic criteria.

So far Burke has played out the same slow, sad dance of policy death on the MDB that we saw from Labor on emissions trading and the RSPT.

Labor has worked hard to suggest Andrew Robb questioned the floating of the dollar the other week, when in fact he was arguing the government needed to cut spending, in order to reduce pressure on interest rates and therefore the dollar. That claim is equally wrong, but apparently beyond Labor’s poor powers of communication to explain. Instead, Robb is the new straw man on “economic Hansonism”.

But Labor’s response to Hockey illustrated better than anything that, far from “walking the reform road”, this government is all talk.

Hockey has presented the government with a serious opportunity to initiate a bipartisan process of overhauling banking regulation and increasing competition in the sector that lies at the core of our economy. Instead of welcoming the opposition’s willingness to overcome its deregulatory impulse and set the ball rolling on what could be a key legacy reform of this government, it has used Hockey’s bold statements to attack him.

It was Assistant Treasurer and remorseless self-promoter Bill Shorten who was sent out in question time yesterday to have a go. Shorten may fancy himself as the next prime minister, but his stumbling and inept performance as attack dog suggests he needs a lot more time at the dispatch box before he can fancy himself as a heavy hitter in the chamber.

Shorten’s ego aside, what was truly remarkable was the rationale for his attack on Hockey:

“…if overseas lenders lose confidence in the debate in Australia on banking regulation, that can have catastrophic consequences for Australian mortgage holders … overseas lenders have been particularly sensitive in recent times following the very difficult set of circumstances which many foreign banks have experienced through the global financial crisis… I want to know: what does the opposition have against average mortgage holders that they would jeopardise their interest rates by playing with fire?”

We’ve gone through the looking-glass here, to a bizarre world in which Labor defends the banks (and, implicitly, their expansionist ambitions) against conservative calls for greater regulation, on the basis that timorous foreign investors might be scared off by a debate about banking regulation.

Coming from the government that endured exactly that criticism during the RSPT debate — and mocked it as the miners’ share prices soared — it would be laughable if it didn’t mask a seeming inability to seriously prosecute reform.

No wonder the question ‘what does Labor stand for?’ is so hard to answer.

“The foundation of good government was economic reform,” Gillard told Caucus this morning, assuring Labor MPs her government would be tackling climate and water reform and a “productivity agenda” around health and education.

But it is the Greens who have driven the government toward action on a carbon price rather than fobbing it off until the middle of the decade. Meanwhile Labor seems to be walking away as quickly as possible from action on the Murray-Darling. Now it is the Coalition which has updated its thinking on financial regulation to deal with the aftermath of the GFC.

Labor politicians are pretending to be reformers. They talk incessantly about it, but appear incapable of delivering it. The drive for major economic reform is now coming from elsewhere than the party in power. At the moment, Labor is at best a facilitator but looks more like an impediment.