The answer is b). I suspect they fully know how stupid their policies are (Stephen Conroy has pretty much admitted it on live TV). What they are attempting is

The answer is b). I suspect they fully know how stupid their policies are (Stephen Conroy has pretty much admitted it on live TV). What they are attempting is classic 'wedge politics': pick an issue on which your opposition is passionately divided 50 / 50 and take an extreme position on one side or the other. The internal damage it causes in the other side far outweighs any damage it causes to your own.