EDITORIAL : THE AUSTRALIAN, AUSTRALIA

             

  

Clues to Labor's future lie in lessons of the past

ADDRESSING the nation for the first time as Prime Minister a year ago yesterday, Julia Gillard paid homage to former Labor prime ministers Bob Hawke and Paul Keating "as the architects of today's modern prosperity".

The trouble for Ms Gillard and her party is that, while they have paid lip service to the legacy of those Hawke-Keating years, they don't seem to have grasped the essence of that success. Nor have they proposed anything to emulate those achievements. Rather, we can now see that in an historic setback for the Labor cause and the nation, the Rudd-Gillard years have been a repudiation of the Hawke-Keating model.

The Labor giants of the 1980s and 90s modernised the economy by tackling overdue reforms such as reducing tariffs, floating the dollar, opening up the banking sector, introducing compulsory superannuation, privatising government assets and pursuing productivity through enterprise bargaining. The Labor governments during that period worked

co-operatively with the union movement through seven national "Accord" agreements to control wages, boost productivity and limit inflation. This corporate model of government was far from perfect, but it delivered a clear message and benefits to working families -- it was a compact that promised high levels of employment and some real wages growth in return for inflicting the discomforts of reform and restraint.

Hawke and Keating understood the aspirations of the mainstream, and rather than lecture voters about what was good for them they flattered the public and involved them in the process. Throughout that period Labor accepted and adopted a market economics approach that saw value in encouraging growth in the economy in order to provide greater opportunities for the least fortunate. Despite the public's high expectations being dashed in the painful recession of the early 90s, Labor's model not only succeeded for over a decade, but also entrenched reforms that benefit the nation to this day. The Coalition under John Howard supported those reforms and then sought to build on them for another decade, particularly through tax reform, prudent finance industry oversight and industrial deregulation. In this sense, Australia benefited from more than two decades of economic policy continuum, through boom and bust, and under Labor and Liberal.

In 2007, Kevin Rudd came to power promising economic conservatism, but he abandoned it in a flash when confronted with the global financial crisis. His infamous essay of January 2009 declared "the great neo-liberal experiment of the last 30 years has failed" and "it falls to social democracy to prevent liberal capitalism from cannibalising itself". When Ms Gillard deposed him, she became not only the nation's first female prime minister, but also the first from Labor's left faction. So, for the first time in the post-war period, we have a Labor government that is not controlled by the pragmatism of the NSW Right. The result is a government that appeals less to the mainstream than it does to the progressive activism of GetUp! and the Greens, and that has allowed its economic management to drift towards the outmoded central planning of big government, which not so long ago was proudly described as socialism.

The policy implications of the Rudd-Gillard era have been profound, and not altogether for the good. Labor has re-regulated the labour market so that it is more rigid than during the Hawke-Keating years. Decades after Labor started the process of privatising government enterprises, Gillard Labor is building a government telecommunications monopoly and actually buying back some of the privatised assets. We have seen massive amounts of public money wasted on unproductive infrastructure in schools and subsidising home insulation.

With no true reform agenda to speak of, Ms Gillard promotes two major new taxes, on mining and carbon emissions, as reform. Properly implemented, through consultation with the states and the industry, a profits-based tax on mining could help to share the benefits of the resources boom. But the issue has been poorly handled and remains unresolved. While this newspaper supports a market mechanism to reduce carbon emissions, Ms Gillard's tax breaks a core election promise. And, crucially, the Prime Minister has failed to convince the electorate that Australia is not moving ahead of our main trading partners, in particular the US and China, thereby penalising ourselves economically for no tangible global emissions gain.

The Weekend Australian worries that for inspiration the Gillard government looks more to the interventionist economies of northern Europe than the practical politics of Hawke and Keating. A year after the new Prime Minister said the government had lost its way, it is becoming clear that, in historical terms, the Labor movement has lost its way. What is needed is a reconnection to the aspirations of the mainstream and a productivity-based economic reform agenda -- so that voters can be taken into the government's confidence and promised some future reward for reforms delivered.

On that first day, Prime Minister Gillard said: "There will be some days I delight you, there may be some days I disappoint you." Sadly for Labor and the nation there have been too few of the former and too many of the latter.

Sort it out in private, guys

UNDER Tony Abbott, front-of-house for the Coalition looks determined, driven and disciplined.

Polling suggests the electorate gets the Leader of the Opposition and knows what he stands for. So it's bewildering to find back-of-house squabbling over the sort of internal issues that ought never to be on the front page. The unseemly fight between Peter Reith and Alan Stockdale for the unpaid position of Liberal Party president is the sort of scrap Labor manages to keep behind closed doors. But today, with 100 delegates in Canberra for the party's federal council, the chill factor is high -- and on public display.

We make no comment on the relative merits of the two candidates, other than to note that Mr Reith has a national profile, a good rapport with the business personalities so crucial to Coalition fundraising and a tough hide from some of the biggest battles of the Howard governments in which he served. None of these necessarily make him the superior choice, but he is an attractive alternative to those who see the past three years under Mr Stockdale, a former Victorian treasurer, as an underwhelming chapter in Liberal history. Four of them, including former foreign minister Alexander Downer, felt strongly enough to write an open letter to Mr Stockdale on Thursday, outlining their concerns about party governance and federal structures, finances and "failures in decision-making in that crucial area".

In Mr Stockdale's corner is retiring senator Nick Minchin, who wrote his own letter warning that Mr Reith -- the hard man of industrial relations under John Howard -- would be a gift for Labor as president. The argument against Mr Reith is that having been a large public figure in the past, he will not know when to shut up and leave it to the elected representatives. Yet, as contributing editor Peter van Onselen writes in our pages today, Mr Reith's conviction could "provide valuable ideological ballast for the parliamentary leader". Given that Mr Abbott reportedly encouraged Mr Reith's candidature, it would seem the two men would work together well in terms of setting the tone of the party, raising money and ensuring there is a smooth and professional operation supporting the parliamentary wing.

The party of Robert Menzies is in dire need of strong organisational leadership -- something that Mr Abbott seems to appreciate. Indeed, the organisation's weaknesses were obvious during the last federal election, when the lack of an effective marginal-seats campaign to counter Labor arguably robbed Mr Abbott of victory. For decades, the Liberals have eschewed the ruthless machine politics of Labor for a looser culture that at times looked more like a gentlemen's club. Unlike Labor, with its drip-feed of funds from its union base, the Liberal Party has struggled to win the funding needed to sustain the organisation between elections. The plus has been that those with ideas, policy and beliefs have defined the party, rather than, as in Labor's case, the apparatchiks of Sussex Street. The negative has been a lack of the highly professional support essential in modern politics.

Our major parties are at different points in the cycle. As we note above, Labor must reconnect with voters, not waste time with internal changes and navel-gazing. In contrast, the Liberals must create an organisation that does not fail its front-of-house members. That's the real challenge for the delegates meeting in Canberra today.