December 18th 2004

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Articles from this issue:

EDITORIAL: Dr Strangeloves' Brave New World

ECONOMICS: Australia's $403 billion foreign debt: hail the banana republic!

CANBERRA OBSERVED: Utter failure of the Latham experiment

NATIONAL AFFAIRS: Where Labor failed itself - and Australia

SCHOOL EDUCATION: 'Fuzzy maths' doesn't add up

INTERNET PORNOGRAPHY: Telcos in bed with pornographers

ABORTION: Late-term abortion in Australia

STRAWS IN THE WIND: Eureka - we lost it! / The coming down of the wall / Favourite Books / Home alone

EASTERN EUROPE: Ukraine turns to the West?

PAKISTAN: Military corruption robs country's poor

UNITED NATIONS: Secretary-General Kofi Annan must resign

Long live Eureka (letter)

Kath and Kim land (letter)

Crusades re-examined (letter)

CINEMA: Japanese animation sweeping the West

BOOKS: D-DAY, by Martin Gilbert

BOOKS: THE DICTATORS: Hitler's Germany, Stalin's Russia, by Richard Overy

BOOKS: EPIDEMIC: How Teen Sex is Killing our Kids, by Meg Meeker MD

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Where Labor failed itself - and Australia

by Colin Teese

News Weekly, December 18, 2004
Since the election, speculation and hand-wringing about the performance of the Labor Party has been rife - both inside and beyond the party itself. And the election outcome has provided the media with boundless opportunities for speculation about the party and its leader.

From inside the party, comment has ranged from merely ridiculous to absurd. One particularly disgruntled parliamentary member even asserted that Kim Beazley would have won for them. Not "could", mind you, but "would". And this about a man who stands behind two election losses. One unloseable, and another eminently winnable. At least, that is, according to those who are supposed to know.

As to the media - well, Mr Latham's position is already untenable and he is clinging on, under sufferance, awaiting only the arrival of a more plausible alternative.

The facts

The facts are somewhat different.

No doubt various commentators will have their opinions as to whether Mr Latham campaigned well or badly. We could expect Coalition commentators to denigrate Labor's policies - and, indeed, the Labor leader's performance. But they, and Mr Latham's other detractors, have missed the point.

If we look back over the last 100 years we discover that - at the federal level - the Australian electorate is essentially conservative in nature. The conservative side is the natural party of government. (And, incidentally, the present government is not conservative, but right-radical - a fact it has been able successfully to conceal from the electorate. And for this Labor can and should be held responsible.)

History reminds us that Labor comes to office only when the conservative side messes up. And, normally, it only hangs onto office until the conservatives pull themselves together.

The Hawke/Keating governments appeared to contradict the rule. But, in fact, they did not. They only held on for longer than any other Labor government because the Coalition needed more than the usual time to pull itself together.

Now these facts appear to be better understood on the right of politics. In the Hawke/Keating years we saw little evidence of the Coalition - out of office for an unseemly period - falling apart.

Certainly, they displayed extreme discomfort, but they held together well enough. Much of their troubles arose from a number of destabilising leadership clashes between competing Liberals, Andrew Peacock and John Howard. One of whom appeared not to want the leadership enough and the other, perhaps, wanting it too much for the taste of many in the party.

Eventually, the Liberal Party sorted itself out and, under Mr Howard's leadership, have held office ever since.

So the question is: how can Labor recapture office? If the past is any guide, only if the Coalition stumbles. Ironically, if that is to come during this term of office, it will likely be as a result of a turndown in the economy, which is supposed to be the Coalition's strong point. Certainly, it will not be as a result of the electorate being permanently converted to Labor.

The innate preference for conservative political parties is not the issue of economic management. It is connected with political philosophy - and, if you like, ideology.

Traditionally, the divide between Labor and the right has been clear-cut. Conservatives, at least after World War II and until the Howard right radical switch, were genuinely conservative. They believed in a mixed economy - interventionist capitalism.

Private enterprise was best left to produce most of the goods and services where some kind of competitive pressures could apply. Governments were better able to provide those essential infrastructures: schools, hospitals, power-generation and rail-based transport services which helped oil the wheels of the private economy.

Labor had a different view. It was attached to socialism. Formally it was committed to the idea that all the means of production, distribution and exchange should be government-owned. That is to say, all manufacturing, all transportation and all banking, should be run by the state with the profits accruing to the people. Their position on agriculture was less clear.

Not surprisingly, these policies found little support among those whose financial interests would be directly affected by the implementation of the Labor reforms. And in the early post-war years, Labor, in office, lost a referendum over its bank nationalisation proposals. And it lost the next election, in no small measure over anxiety over its commitment to socialist policies. It was to remain out of office for the next 23 years.

Ordinary voters

Now, the notable thing was that, while those with very large financial and other interests to be protected, spearheaded the campaign against Labor, they were able to carry with them many more ordinary voters, with no real financial interests to defend, but whose political and social instincts placed them in opposition to what Labor stood for.

It has been said, particularly within the ALP, that the 1955 Split which divided Labor enabled the newly created Democratic Labor Party (DLP) to keep Labor out of office for the next 17 years.

There is, however, another possibility, at least as plausible. Labor kept itself out of office over that period by offering policies which did not resonate with the electorate. And remember, over that period, the DLP was never - for good reason - ever able to support Labor.

Although Labor policies - and indeed, the party's entire platform - could not win favour with the electorate, the party was yet able to maintain a strong influence over policy. Why? Because it held on to its core beliefs.

Overall, its policies could not persuade the electorate to put it into government, but there were elements which appealed to them. And these, the conservative Prime Minister of the time, Robert Menzies, had no hesitation in picking them up and calling them his own.

Labor shaped policy

So Labor had its influence. But it was able to do more. It played something of a watchdog role. It was the anchor which kept the other side of politics securely moored. With Labor's well-defined ideological and philosophical base as an alternative, it wasn't possible for the conservatives to stray too far out of line without the risk of losing voter support.

None of that applies any longer. And the principal and most adverse effect of its absence is in the area of economic policy, though other areas of policy-making are also affected. In economics, quite radical policy changes have been possible with little more than token Labor opposition. Some of them indeed were introduced by Labor itself, when in government.

In policy terms, such has been Labor's transformation that it is no longer able to articulate - even to itself - what it actually stands for. It enters each election with the stated intention of appealing to this or that emerging interest group - usually one identified by the media. And it attempts to guess what kinds of policies might attract these groups. Is it any wonder it cannot get its policy mix right?

Meanwhile, it is too scared to venture beyond the area of orthodox economics out of fear that it will alienate some group or other. A year or so back, when Simon Crean was Labor's leader, he was asked whether or not his party would support the creation of a new Development Bank. His reply was: not unless the other side of politics also supported it.

The party seems incapable of fashioning its own policy position based around the needs of its traditional support-base. And it cannot criticise the government on economic policy because, in all essential respects, its policies are identical. There are some differences between the parties in other areas, but in so far as they are related to expenditures (and mostly they are), they come back to economics.

Nowhere is this better illustrated than in Labor's attitude to a balanced budget. The idea of balancing the budget as an end in itself is absurd. And, although the Coalition professes fealty to that notion, its commitment is more theoretical than real. What the Coalition really believes in is accumulating surpluses over its three-year term which can be used in elections to buy votes.

Meanwhile, Labor has committed itself to what the Coalition doesn't believe in or follow as a matter of practice; and that is to year-on-year balanced budgets. This is just one example of what can happen to a political party which no longer knows what it stands for.

The interesting part of all this is that Labor's changing strategy has not even strengthened its electoral appeal, much less projected it into office. At the same time, Labor seems to be losing its grip on its traditional support-base.

In the most recent election, its primary vote - according to some sources - was its lowest ever. If that circumstance continues, it will be difficult for Labor to win a federal election, even if the Coalition messes up.

What is necessary is for Labor to consolidate its hold on its traditional supporters and, when the opportunity comes, take enough of the votes from the other side to win office.

Right now, Labor is losing on all sides. Its regular supporters are deserting it, and its policies are so similar to the Coalition's that it has no chance to influence policy.

Labor no longer seems to be the party waiting in the wings, ready with alternative policies with which to influence and contain government excesses, and, when its chance comes, to assume office.

Such is the present state of the party that only the bravest could predict any realigning of the party in line with its traditional values and any returning it to a position of influence in our political life which our system sorely needs.

Sadly, the party has been captured by careerists, whose interest lies in winning office as an end in itself. Ironically, they have been less successful in doing that than has been traditional Labor.

Nevertheless, such has been the influence of opportunism that Mr Crean - a Labor traditionalist - was persuaded to waste the first year of his ill-fated leadership convincing himself and others that the party was distancing itself from the trade unions.

And who was the driving force of that idea? Would you believe - Mr Howard! The question Mr Crean should have been asking was: can the policy hope, overall, to increase Labor's vote?

Of course, none of this would matter were it not for the fact that, whether or not we like traditional Labor, Australia's political and economic life needs them.

  • Colin Teese was deputy secretary of the Department of Trade.

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