Not Dead Yet

In May last year something unusual happened. A Labor factional powerbroker said something positive about me. Speaking at the National Press Club in Canberra, the head of the NSW Right faction and secretary of the Australian Workers’ Union, Paul Howes, suggested it was time to end the mutual hostility between the party and myself.

“Maybe the time’s come to stop being so particular about particular leaders or former leaders, constantly spending so much air-time ripping into ourselves,” he said. “I’m as guilty of this as anyone else. The time has come for our movement to be more tolerant of dissent, to be more tolerant of diversity, to bring back those lost members, those cousins who don’t come to Christmas anymore.”

My last Christmas dinner with the ALP was in 2004. Four weeks later I resigned as the federal leader of the party and as the Member for Werriwa. My motivations were many: overcoming ill-health, ending the torment of time away from family, detesting large sections of the media and disenchantment with Labor’s union-based factional system. Thereafter, I allowed my ALP membership ticket to lapse, ending my 25-year involvement in party politics. I became a rare breed – having resigned from parliament for “family reasons” I actually spent more time with my family, becoming the primary carer of my children.

In September 2005 I published my diaries, a frank account of life inside the Labor family. This ensured a long absence from future Christmas festivities. I was portrayed as a Grinch-like figure, the man who tried to steal Labor’s credibility. The initial reaction to my book was one of denial and denigration. With only a few dissenters, Australia’s political class united in declaring my critique to be absurd. To paraphrase the words of many: “The Labor Party can’t be as bad as that; the bastard has gone mad.”

This remained the orthodoxy until the beginning of 2010. Then something changed. People who had once looked the other way in the shopping aisles at Woolworths began to greet me like a long-lost friend, exclaiming, “Gee, you were right about Rudd in that book of yours.” Labor Party members I had once known contacted me, expressing regret that they had not taken my views seriously and we had not stayed in touch.

Some media commentators even altered their stance, acknowledging that many of Labor’s problems, especially in its organisational roots, had been foreshadowed in The Latham Diaries. At this point, again in the spirit of Christmas dinner, I could have joined with Noël Coward in declaring, “Legitimate at last. Won’t Mother be pleased?” My book had told the truth about Labor’s internal condition but, as often happens in public life, it took five years for the truth to be accepted.

Labor’s membership crisis

During the terms of the Rudd and Gillard governments, criticism of the ALP has become something of a national pastime. The processes of government have resulted in greater transparency about the true state of the Labor movement. The ALP’s rank-and-file membership has collapsed, concentrating power in an oligarchy of union-based factional leaders. Active trade unionism has also declined, with the Health Services Union scandal revealing a culture of nepotism and financial abuse.

The two problems are linked. Union numbers at Labor conferences have conferred factional power on a relatively small number of union chiefs. This factional control, in turn, has spawned arrogance – the type of conceit by which union officials assume that union money is their money. The countervailing influence of broad-based party and trade union membership, the traditional ballast of the Labor movement, has been lost.

Unionisation in Australia has fallen to 18 per cent economy-wide, with private sector coverage at just 13 per cent. Whether the traditionalists like it or not, minority union membership is here to stay. In a highly skilled and competitive modern economy – dominated by small businesses, contractors and information workers – it is impossible to organise mass union membership. A majority of economic agents see no need for collective representation. They have the qualifications and confidence to bargain effectively on their own behalf.

The problem for Labor, with its concentrated base of union affiliations and financing, lies in the organisational imbalance between the new economy and old-style unionism. In the workforce, unions have become a minority influence, whereas inside the ALP, through the strength of the factional system, they have maintained a majority complex, exercising control over party decision-making.

Having watched their relevance in the workplace fade over the past thirty years, union officials have compensated by beefing up their role inside the Labor Party. In practice in Australia, there is no longer any such thing as a powerful unionist, as expressed by the traditional notion of industrial leverage. There is, however, a generation of union leaders who have made themselves powerful by using their union’s resources to exercise factional influence inside the ALP. This has been a classic “big fish in a small pond” strategy.

It has been made easier by the long-term decline in Labor branch membership. In any organisation, power flows to the centre whenever a critical mass of grassroots participation is lost. This concentration of influence usually results in self-serving processes and decisions, generating ethical problems and further disillusionment among rank-and-file members. In this fashion, oligarchies feature a vicious circle of centralised power and membership decline. Over time, the preservation of power internally is regarded as a higher priority than satisfying the organisation’s external goals.

The formalisation of Labor’s factional system in the 1980s has coincided with a hollowing out of party membership. The Labor historian Troy Bramston has chronicled the collapse: from 150,000 members nationally in the 1930s, to 50,000 in the 1990s, to just 11,665 members who voted in the ballot for the ALP national presidency in November 2011. In many parts of the nation, branches which once flourished as forums of working-class activism and community participation have closed down. At each election, the party has had to rely on a dwindling number of volunteers to distribute its literature and staff its polling booths.

The problem is particularly acute in outer-suburban areas – the key marginal seats Labor needs to win to hold government. As the strength of union-based factionalism has increased, party members have lost interest in local branch meetings. Young families and professional people, already burdened by long commuting journeys and lifestyle pressures, have had no reason to maintain their involvement.

Compared to rival community organisations, the return on ALP member­ship is minimal. Active branch life has been reduced to a hard core of the ageing party faithful, plus members of parliament and their staff and other hustling aspirants for elected office. On the rollcall of inactive members, ethnic branch-stacking, while not as bad as in the 1990s, remains a problem.

In effect, Labor has split into two organisations, each operating in a different sphere of political activity. Branches go through the motions of monthly meetings and debate, knowing that their resolutions will be ignored by the party hierarchy. Their members blame the factional system for ruining the traditional Labor ethos of rank-and-file participation. This is the politics of permanent complaint at a local level.

At the party’s centre, the branches are viewed as an irritation, a mid-twentieth-century anachronism. Factional leaders rarely attend party meetings in their local electorate, looking down their noses at the tedium and irrelevance of such gatherings. In the exercise of their power, this is not an irrational outlook. Why bother with the party’s grassroots, huddled together in dank community halls, when the union/factional bosses can make real decisions, wielding influence around the lunch tables of inner-city restaurants?

When we think of Labor Party splits, the parliamentary schisms of 1916, 1931 and 1955 come to mind – in each case, highlighted by the decision of a significant proportion of Labor MPs to leave the party. The current split is different and, in many respects, more serious. The union/factional wing of the party has divorced itself from the rank-and-file.

Thus modern Labor is living an institutionalised fallacy. It is two parties in one, two divisions pulling against each other. The ALP historian and former NSW minister Rodney Cavalier has spoken of the “party below” (its disenfranchised membership), the corollary of which is the “party above” (its dominant powerbrokers). These two organisations have little in common, beyond the name “Labor” and a romantic attachment to the notion of working-class struggle.

The ALP’s original purpose, the mass participation of working men and women in parliamentary democracy, has dissolved. Very few unionists are still active in the party below. This is clear from statistics released by the former NSW assistant general secretary Luke Foley. Only 16 per cent of party members belong to a trade union affiliated to the ALP. By far the biggest category (55 per cent) is concessional membership, that is, people outside the workforce, mainly retirees.

When extrapolated to the 2011 national presidency vote, Foley’s figures expose the emptiness of Labor’s structure. Of the party’s 11,665 members participating in the ballot, only 1860 (16 per cent of the total) were likely to belong to a Labor-affiliated union. This represents, on average, just twelve trade unionists in each federal electorate – not enough for a rugby team.

As a party of working-class activism, Labor now resembles a Hollywood back lot. There’s nothing behind the facade. Walk through the doors of the main-street saloon and you find yourself wandering around an empty carpark. Grassroots union activism in Australia has ended and, with it, the energy which once powered political Labor has faded. As Cavalier has recorded:

Contested union ballots, like attendances at union meetings, reveal how very few members take the slightest interest in the affairs of their unions. The proportion of members of affiliated unions who belong to the ALP is fewer than 0.5 per cent. Belonging to the ALP is not part of the life of a modern Australian worker.

In organising Labor Party numbers, it is many decades since union officials tried to recruit unionists into the local branches. Union power is now exercised through centralised control: union secretaries donating money and staff to marginal seats and rounding up the numbers at state and federal Labor conferences. The grand old party of working-class participation has become a virtual party, top-heavy with union/factional bosses.

In no other part of society – whether in the corporate sector, community groups or government agencies – could an organisation function this way and expect to survive. This is the core delusion of 21st-century democracy, that political parties can fragment and hollow out, yet still win the confidence of the people.

For a party of reform like Labor, the condition is doubly debilitating. Social change needs to be a bottom-up process, with reformers drawing ideas from the community, testing those ideas at a local level and using them in the development of national policy. Labor has always been strongest when it has followed this technique: advancing a reform agenda but not getting too far ahead of public opinion.

Rediscovering this process in an era of widespread public disengagement from party politics is a difficult task, but one essential to Labor’s future. It is the key to effective organisational reform. Otherwise the party will continue to shrivel into a dispirited back lot, living off the glories of the past but unable to attract and inspire the next generation of social reformers.

Labor’s identity crisis

The corrosion of Labor’s culture has produced a crisis of Labor identity. The party is confused on economic policy, not knowing whether to embrace the Keating legacy of micro-reform and productivity growth or to accede to the sectional demands of union/factional bosses and the anti-competitive comfort of industry welfare.

As union coverage tends to be highest in old, declining industries, such as smokestack manufacturing, the demand for protection and subsidisation is disproportionately strong inside the Labor movement. This is at odds with Keating’s creation of a “miracle economy,” delivering twenty years of uninterrupted growth and wealth creation through the liberalisation of economic policy.

The union oligarchy is also at odds with the rise of Australia’s new aspirational class: the free agents of the new economy (the start-up entrepreneurs, contractors and information-rich specialists) who resent the intervention of outsiders, whether in the form of excessive government regulation or trade union collectivism. This is a problem not just in economic management, but also the development of social policy. Given a choice between traditional left thinking – reflected in the paternalism of welfare-state programs – and the aspirational demand for individual entitlements and flexibility, Labor still sides with the former.

In combination these problems have damaged the party’s electoral standing. The aspirational class is the fastest growing part of the electorate, yet much of the ALP’s policy-making is still directed towards a declining working-class constituency. The underlying voting trends in recent years have been alarming.

Generations of Australians who grew up with the assumption of an evenly balanced two-party system have had to recast their thinking. In March 2011 the Labor primary vote at the NSW election fell below 25 per cent – a figure more befitting an interest group than a mainstream party. Twelve months later in Queensland, Labor’s parliamentary representation was reduced to the size of a netball team.

In these two states, the longevity of the outgoing ALP governments was a factor. But in national opinion polls, with a federal government not yet two terms old, the party’s primary vote has rarely lifted above the mid-30s – an improvement on the catastrophic levels of 2011 but not sufficient to avert defeat at the federal election in September.

Optimists argue this is a cyclical phenomenon, that Labor will rebound once the high-water mark of Liberal dominance in Australia is reached. If only politics were like the world’s oceans, with the tides of electoral support moving with metronomic precision. The party’s bigger problem is structural, the steady erosion of its traditional working-class base. Across the suburban flatlands of Australia’s major cities, people who grew up in fibro shacks now live in solid-stone double-storey affluence. Families which were once resigned to a lifetime of blue-collar work now expect their children to be well-educated professionals and entrepreneurs.

In this respect, the Labor movement is a victim of its own success. With their economic reforms the Hawke and Keating governments freed up social mobility, ending the rigidity of Australia’s class structure. A deregulated economy has given workers the chance to gain access to capital and establish small businesses. This is a tremendous force for growth and wealth accumulation, making it the greatest economic achievement of Labor’s history in government. Politically, however, it has cannibalised a large portion of the party’s base. The working class has gone the way of record players and typewriters – a social relic irrelevant to the future shape of the Labor movement.

As a party dedicated to achieving a democratic majority, the ALP cannot win office and exercise power without the support of the rising aspirationals. This makes its egalitarian goals doubly difficult. The new grouping commands an electoral influence which cannot be ignored. Yet the pressing social justice issue in Australia is to address the problems of an entrenched underclass – people who have missed out on economic mobility, who are seemingly excluded from all forms of employment and social ambition.

The problem for this group is not the adequacy of income support. The Australian welfare system is generous enough for recipients to cover basic living costs. Indeed, since the mid-1980s, people on government benefits have experienced an increase in real disposable income of 11.9 per cent. Rather, the entrenchment of poverty comes primarily from social factors: disadvantaged people living in disadvantaged places, with an absence of effective role models and behavioural norms. In practice, this group has gone feral, leading lives of welfare dependency, substance abuse and street crime. Their political influence is minimal: many are not on the electoral roll and those who are tend to live in safe Labor seats.

As the working class has splintered, most of Labor’s constituency has climbed upwards in society, while a residual cohort has fallen back. In its values and policies, the ALP needs to straddle these two groupings, in a political setting in which its membership base and the viability of trade unionism are in decline. So far, the party is yet to overcome the Biblical challenge of serving two masters. It has not won the political trust of the new aspirational class, nor has it found new ways of solving the slow-burning crisis of the underclass.

A third splintering force has made the reform task even harder: the rise of climate change as the pre-eminent environmental issue of our time. In a labour-based party, there is a sharp tension between union officials whose members work in carbon-intensive industries and Labor MPs who recognise the dangers of global warming and the need for collective action. This conflict has been evident in ALP policy-making since 2006. Senior unionists have wanted the party to soft-pedal on this issue, while the parliamentary Left faction has urged a more aggressive stance.

Adding to this difficulty is the electoral task of selling climate change policies to aspirational voters in marginal seats. The new economic class has a strong focus on consumerism. This is a natural consequence of its financial success. Its favourite recreational activity is shopping. While it has little problem with other people making economic sacrifices to reduce the nation’s carbon footprint, it does not respond well to the idea of individual sacrifice.

This contradiction, more than any other policy area, destroyed Kevin Rudd’s prime ministership. He was elected in 2007 on a promise of addressing the cost-of-living pressures on “working families,” yet he also hailed climate change as the “great moral challenge of our generation.” Logically, the most effective way of reducing carbon consumption in a market economy is to increase its price – a strategy in direct defiance of the government’s living-standards mantra. In early 2010, Rudd conceded defeat in reconciling these goals. He accepted the poll-driven advice of party officials to shelve his Emissions Trading Scheme. Not surprisingly, policy chaos and broken promises followed – a position from which Labor is yet to recover fully.

Later in this essay, I argue the case for the party maintaining a high-profile campaign on the damaging impact of global warming. The political aftermath of Rudd’s ETS backdown has left the party bruised and tentative. It is tempting for Labor MPs to wish the issue away, that having introduced a carbon tax during the current parliament, they should now lie low and avoid discussing climate change. This would be a strategic mistake.

In the history of social democracy, there have not been that many issues where science is comprehensively on the side of progressive politics. As an environmental concern, climate change will not go away. It will continue to transform the earth’s habitats and, consequently, the way in which we think about economic activity and social organisation.

Labor must lead this debate in Australia. A strategy of withdrawal would cede this political space to the Greens at one extreme and the scaremongering and denialism of the Liberal and National parties at the other. For the remainder of this century and beyond, global warming will be the key transformative issue for left-of-centre politics. Labor has no choice but to think long-term about its consequences and plan for a new model of political economy.

A new discipline

Ross Garnaut once described climate change as a “diabolical policy problem.” This is also an appropriate way to think about the challenges facing the Australian Labor movement. Not since the tumultuous post-World War I socialisation debates have the ALP’s future direction and purpose been so uncertain. Its organisation is split in two, with the party above suffocating the party below. Its modern identity is also unformed, with the party yet to reconcile competing economic, social and environmental goals. Those hearty souls hoping to revive Labor’s agenda face a mammoth task – reminiscent of the Yiddish tale of the man sent to wait at the city gates for the millennium. “Big job,” he said, “but at least the work is steady.”

A task on this scale requires a certain temperament, a positive state of mind. Thus the purpose of this essay is to be constructive, not to rehash in detail things which have gone wrong with the Labor movement. I have provided a summary, and that’s enough. Bob Carr was right in September last year when, in response to the publication of Lindsay Tanner’s book Politics with Purpose, he said people have grown weary of the endless analysis of Labor’s faults.

With a humour typical of his outlook on public life, Carr said the heavy volume of Labor books and essays marked the emergence of a new literary genre, much like vampire novels. My library at home has several shelves of such material: authors highly skilled in identifying problems within the Labor movement but mostly silent on the development of solutions. Tanner’s book is no different. It is representative of a modern Labor ailment – a whinging, repetitive obsession with what has gone wrong.

This is somewhat surprising, as Tanner himself has often preached the importance of a constructive approach by the left. He has told the story of walking past an inner-Melbourne building site, reading political posters imploring society to “Stop the Attacks.” He wanted to know when the left was going to start the attacks – on inequality, on poverty, on environmental decline. This is the mindset Labor needs to adopt: forever positive, forever creative.

Hence there should be a new rigour applied to the writing of books and essays on the ALP: they do not qualify for publication unless they focus on answers – new constructive ideas for the future of social democracy, new positive attacks on entrenched privilege and social injustice. This essay is bound by that discipline, moving beyond the limits of Labor’s Twilight series.

One last Christmas

I should say something about my motivation in writing this essay. It comes from an obligation to correct a lingering personal failure. Along with Rudd and Julia Gillard, I was a Labor leader drawn from the post-Keating generation of parliamentarians. We were tasked with revitalising the party’s agenda after federal Labor’s heavy defeat in 1996, but in large part, nearly two decades later, this goal remains unfulfilled.

I had a short period in the job, just fourteen months. Nonetheless, I made no lasting progress in the development of new Labor thinking. Looking back, I came to the leadership too young (at forty-two years of age), with too little life experience (not yet having built a home and raised a family) and with too much of my policy thinking still a work-in-progress. I had done a lot of writing about new ideas for the party, but very little of it was settled in the public arena – that is, tested over time and able to withstand criticism, both from inside the Labor movement and by political opponents.

Rudd and Gillard, in their differing ways, have done much better. Rudd delivered an exhilarating election victory in 2007 and, for several years, inspired a generation of true believers to believe again. He is a highly intelligent person with a phenomenal work ethic – the sort of leader who could have successfully addressed Labor’s structural challenges. Unhappily, he failed in this task because he put public popularity ahead of the development of public policy.

The legitimacy of Rudd’s leadership rested entirely on his standing in the opinion polls. When this dissolved in the first half of 2010, his caucus colleagues, most of whom could not abide the man personally, removed him from the prime ministership. He left office with a newly discovered contempt for Labor’s factional system, the so-called faceless men. More tellingly, the key policy issues of his leadership remained unresolved: he failed to develop an effective framework for dealing with climate change, mining taxation and border protection. This was a terrible waste of Rudd’s talent – a tragedy made worse by his subsequent role as Labor’s parliamentary Destabiliser-in-Chief.

Gillard’s great skill has been on the practical side of government: negotiating successfully with the independents after the 2010 election, navigating a series of legislative achievements through a hung parliament and holding together the disparate sub-factions and fiefdoms of Labor’s caucus. Her methodology is that of a transactional leader, a tough-minded doer, rather than a policy wonk or inspirational figure.

There is little evidence of Gillard wanting to tackle Labor’s identity and structural problems, of her leading a renewed push for party reform. In large part, this is a product of the fraught political environment in which she finds herself. She is the modern equivalent of the eighteenth-century clergyman and pamphleteer Emmanuel Joseph Sieyès, who, when asked what he had done during the French Revolution, replied, “I survived.”

The ALP is at a tipping point in its history. If it does not resolve its underlying contradictions, it might not survive as a viable parliamentary force, shrinking in tandem with its union/working-class base. At the other extreme of possibilities, however, there are opportunities for Labor to make substantial electoral gains. Several of the long-term trends in Australian politics are running its way. I have already mentioned the science of global warming – an issue on which, eventually, the right-wing denialists will be routed politically.

Another opportunity for Labor is to be found in the shifting ideological base of the conservative parties and their barrackers in the media. In recent years, a group of hard-right fanatics has become more prominent within the Coalition, mimicking the ideological extremism of the Tea Party phenomenon in the United States. Labor’s opponents, in effect, have vacated the vital middle ground of Australian politics.

Under Tony Abbott’s leadership, longstanding political conventions have been trashed as federal politics has become intensely personal and destructive. The reasonable, small “l” liberalism of Malcolm Turnbull’s leadership is long gone. This is not even John Howard-style conservatism but, rather, an alien political trend in our country – a far-right arrogance and authoritarianism which relentlessly attacks climate scientists, evidence-based policy and anyone in the public debate who cares about social fairness. The democratic traditions of the Liberal Party, tolerating diversity and dissent, have been abandoned in favour of reactionary tactics.

Later in the essay, I look at this development in greater detail and its implications for the two-party contest. The opportunity for Labor, however, is obvious: as the Coalition has moved to the far-right, it is now out-of-touch with the moderate, empirical views of the electoral centre. This can be seen in Abbott’s record-high disapproval ratings – a popular rejection of his extreme style of politics.

Perhaps the ALP can do more than just survive. If it resolves its structural and identity issues – in effect, reinventing itself for the twenty-first century – it has the potential to dominate the new right-wing reactionaries. It can deftly reposition itself as a creative centre-left force, meeting the economic aspirations of the new middle class while also addressing underclass poverty – marrying economic growth with social justice. In this way, Labor can win more elections than it loses, entrenching itself as a natural party of government.

I want this essay to assist the next generation of ALP activists in realising that goal, to help them avoid the mistakes of the post-Keating generation. I hope my time out of politics has allowed my views to mature, to benefit from the process of learning from past errors of judgment. My contribution comes from a unique perspective: someone with extensive experience inside a political party but with the objectivity one finds in estrangement from the system. That is the spirit in which the essay has been written. I have no desire to rejoin the Labor family, but perhaps I could drop by one more time, offering some Christmas cheer and constructive advice.