The ALP after the NSW election - facing the Canadian conundrum?

The Greens subsequently won the seat of Balmain following the publication of the previous article.

However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.

The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).

They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.

John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.

As Simon Benson observed in the Daily Telegraph:

Faulkner's thesis centres on a belief that the reason Labor's membership has disappeared was not only as a result of the cancerous machine-dominated process of preselections but because they failed to engage on left issues, causing a leakage of future Labor activists to fringe organisations like Get Up…….

If Labor had not been afraid to embrace Left-wing issues before the election, people would not have voted Green.

That is one view. Benson himself thought the real problem for the ALP was:

….the political dead weight of the trade union movement.

When they represented the bulk of the workforce they had legitimacy in the ALP. At their current 15 per cent - the majority of which are in public sector unions - they have a diminished legitimacy.

Another view.

As Peter Hartcher said in an opinion piece following Faulkner’s speech:

Labor is now in an existential crisis. For the first time, it has a serious political challenger capable of taking seats from its left, as well as the traditional enemy on the right, the Coalition.

If an elector wants to vote for a conservative party, she can vote for a real conservative party, the Liberals. If an elector wants to vote for a progressive party, he can vote for a real progressive party, the Greens.

Why vote for the one in the middle? Only 31 per cent of voters would bother, according to the latest Herald Nielsen poll, and that's about 9 percentage points fewer than Labor needs if it hopes to stand for election as a party capable of governing in its own right.

The worst case scenario is that Labor will face the ‘Canadian conundrum’.

For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.

However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.

The Liberals suffered the worst outcome imaginable:

Then came the unexpected surge of the NDP, and Conservative Leader Stephen Harper’s eleventh-hour appeal to Liberal voters with economically conservative leanings, often called blue Liberals. “Let me speak very clearly to traditional Liberal voters: I know many of you do not want NDP policies. That you do not want NDP tax hikes,” Mr. Harper said on Sunday.

The message: Only we can protect your prosperity.

The result is that the Conservatives were able to achieve in 2011 what eluded them in 2008, a coalition of economically conservative-minded voters who cast their ballots based on pocketbook issues rather than concerns over cultural issues, including the Tories’ supposed leanings toward social conservatism.

Those blue Liberals were the missing element in the Conservative coalition. In the 1990s, they were the foundation of the successive Liberal sweeps of Ontario. So long as they remained with the Liberals, Mr. Harper would be shut out of the urban heart of most big Canadian cities.

But the rise of the NDP, which siphoned off progressive-minded Liberals, clearly spooked a sizable number of blue Liberals, causing them to bolt to Mr. Harper in the last weekend of campaigning...

This could be the federal fate of the ALP if Tony Abbott commences to concentrate on values than being the party of ‘no’ and if the Labor fails to reform itself.

The question is – can Labor?

The (second most) recent appointment to the NSW Legislative Council was Walt Secord.

As the Sun Herald reports:

After he left Carr's office, Hawker gave Secord work at his Labor-aligned lobbyist firm Hawker Britton before parachuting him into Rudd's office in Canberra 12 months before the Kevin07 campaign. Straight after the historic win for Labor, Secord was moved (some say shafted) to the office of Justine Elliot, the then minister for ageing, before returning to Sydney in 2009 to work briefly for treasurer Eric Roozendaal and then Keneally.

Keneally describes Secord as ''among Australia's best'' political and media operators but also ''policy smart''....

and:

Liberals are happy to see Secord in the upper house where he will be joined by the former primary industries minister Steve Whan, who lost his seat of Monaro but will be parachuted into the Legislative Council to raise the ALP's leadership stocks.

“Having Walt Secord and Steve Whan taking up seats is just more proof that Labor talks about renewal but still hasn't acted upon the talk,'' says the Liberal source.

In NSW at least, until Labor change the view that the best government is drawn from from a parliament of the nomenklatura they face a long time in the wilderness

Further reflections on the NSW election

The Greens subsequently won the seat of Balmain following the publication of the previous article.

However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.

The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).

They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.

John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.

As Simon Benson observed in the Daily Telegraph:


Faulkner's thesis centres on a belief that the reason Labor's membership has disappeared was not only as a result of the cancerous machine-dominated process of preselections but because they failed to engage on left issues, causing a leakage of future Labor activists to fringe organisations like Get Up…….

If Labor had not been afraid to embrace Left-wing issues before the election, people would not have voted Green.

That is one view. Benson thought the real problem for the ALP was:


….the political dead weight of the trade union movement.

When they represented the bulk of the workforce they had legitimacy in the ALP. At their current 15 per cent - the majority of which are in public sector unions - they have a diminished legitimacy.

Another view.

As Peter Hartcher said in an opinion piece following Faulkner’s speech:


Labor is now in an existential crisis. For the first time, it has a serious political challenger capable of taking seats from its left, as well as the traditional enemy on the right, the Coalition.

If an elector wants to vote for a conservative party, she can vote for a real conservative party, the Liberals. If an elector wants to vote for a progressive party, he can vote for a real progressive party, the Greens.

Why vote for the one in the middle? Only 31 per cent of voters would bother, according to the latest Herald Nielsen poll, and that's about 9 percentage points fewer than Labor needs if it hopes to stand for election as a party capable of governing in its own right.

The worst case scenario is that Labor will face the ‘Canadian conundrum’.

For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.

However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.


The Liberals suffered the worst outcome imaginable:


Then came the unexpected surge of the NDP, and Conservative Leader Stephen Harper’s eleventh-hour appeal to Liberal voters with economically conservative leanings, often called blue Liberals. “Let me speak very clearly to traditional Liberal voters: I know many of you do not want NDP policies. That you do not want NDP tax hikes,” Mr. Harper said on Sunday.

The message: Only we can protect your prosperity.

The result is that the Conservatives were able to achieve in 2011 what eluded them in
2008, a coalition of economically conservative-minded voters who cast their ballots based on pocketbook issues rather than concerns over cultural issues, including the Tories’ supposed leanings toward social conservatism.

Those blue Liberals were the missing element in the Conservative coalition.

In the 1990s, they were the foundation of the successive Liberal sweeps of Ontario. So long as they remained with the Liberals, Mr. Harper would be shut out of the urban heart of most big Canadian cities.

But the rise of the NDP, which siphoned off progressive-minded Liberals,clearly spooked a sizable number of blue Liberals, causing them to bolt to Mr.Harper in the last weekend of campaigning....

This could be the fate of the ALP if Tony Abbott commences to concentrate on values than being the party of 'no and if Labor fails to reform itself.


The question is – can Labor?


The (second most) most recent Labor appointment to the NSW Legislative Council was Walt Secord.


As the Sun Herald reports:


After he left Carr's office, Hawker gave Secord work at his Labor-aligned lobbyist firm Hawker Britton before parachuting him into Rudd's office in Canberra 12 months before the Kevin07 campaign. Straight after the historic win for Labor, Secord was moved (some say shafted) to the office of Justine Elliot, the then minister for ageing, before returning to Sydney in 2009 to work briefly for treasurer Eric Roozendaal and then Keneally.


Keneally describes Secord as ''among Australia's best'' political and media operators but also ''policy smart''


and:


Liberals are happy to see Secord in the upper house where he will be joined by the former primary industries minister Steve Whan, who lost his seat of Monaro but will be parachuted into the Legislative Council to raise the ALP's leadership stocks.


“Having Walt Secord and Steve Whan taking up seats is just more proof that Labor talks about renewal but still hasn't acted upon the talk,'' says the Liberal source.


Quite.

UPDATE

Antony Green has conducted an analysis on the NSW election which includes observations such as:

- the Coalition's 2-party preferred vote was 75.7% in country NSW, 62.0% in Sydney and even 53.9% in the industrial seats of the Hunter and Illawarra;

- in the Hunter Valley, Labor's primary vote was 32.9%, against 33.1% for the Liberal Party and 2.1% for the Nationals;

- the Liberal Party polled 50.6% of the first preference vote in greater a Sydney as opposed to 28.3% for Labor;.

- the Liberal Party even won a majority of the vote in Western Sydney, a first preference vote of 43.5% to 36.6% for Labor, a Liberal 2-party vote of 53.8%; and

- the Labor first preference vote was in single figures in seven electorates.
Truly a terrible result.

The NSW Election and the ALP

This article was originally published at On Line Opinion on 31 March 2011.

A follow up article will discuss developments since the NSW election.

The NSW ALP has just received its anticipated thumping at the polls, creating a real Quo Vadis moment for both it and the ALP more generally.

This may well have been a ‘transformational election’ – where tribal voters irrevocably change allegiance.

The NSW ALP gamebook (copied in other states) was set out by Bruce Hawker from Hawker Britton in a Sydney Morning Herald article of 14 September 2006:

When state Labor governments began being re-elected from 1995, the public gave them qualified endorsement. In almost every instance they were elected with the bearest of margins and had to prove they were solid, conservative managers of the economy. When they did move it was usually to the centre on their traditionally weak areas, such as law and order and encouraging development. Premiers such as Bob Carr and Mike Rann were also able to woo the green vote with environmental measures the conservatives could never match, saddled as they are to the Nationals. This political dexterity effectively gave Labor's opponents nowhere to move. The result has been a long run of election wins, each one as good or better than the last. However, this clever positioning in the middle that has worked for the last 15 years has now run its race.

Demographer Bernard Salt has noted a social and economic division between those who live in the inner city and those who live on the city's edge:

…... I am suggesting that there is almost a regionalisation of wealth, income and culture based on urban geography.Battlers, migrants and assorted low-income earners who formerly lived in the inner city are now being flung out, as if by some centrifugal force, to the city's edge. What is left in the inner city is an odd coalescence of tribes - namely students, singles, couples, dinks, gays, expats, corporates, divorcees and, most important of all, the professional and entrepreneurial classes. And to this lot I might add the entertainment, information and media glitterati. As a general principle, none of this class would ever think of living more than 10km from the city centre.

The ALP voting coalition has hitherto consisted of self identifying members of the working class, people with English as a second language, income transfer recipients, public sector workers, the arts sector and progressive middle class professionals who are both secularist and internationalist in orientation.

However, the Greens message - guided by the so-called ‘four pillars’ (ecological sustainability, social equality and economic justice, grassroots democracy and peace and disarmament and nonviolence,) is apparently more amenable to a ‘progressive’ middle class constituency than one put out by a 50% union controlled cadre party designed to represent the ‘labour movement’, achieving progressive change primarily through improvements to working conditions and changes to the wages and salaries system.

Although the Greens failed to make their anticipated breakthrough win in the lower house they are the second most popular party in a number of Sydney electorates, they still won 10% of the vote and the clustered nature of its vote certainly requires the ALP to use a lot of ammunition in seats such as Marrickville and Balmain so Labor can remain competitive in these seats.

On the other side of the coin, the ‘lifestyle’ values of these voters, such as placing a premium on environmental issues, may not be necessarily shared by those in the outer suburbs and industrial regions more interested in more utilitarian issues that are part of living in suburbia – being able to run the car, keep the mortgage paid, and so forth.

The party of organised labour also faces the problem that the larger manufacturing operations employing thousands of unionised workers are being replaced by smaller less unionised service industries, breaking the nexus between worker and union and thus the broader ‘labour movement’.

Finally, in the land of the Macmansion and the self-employed tradie, ‘working class’ identity is being replaced by ‘aspirational’ ideals, creating an environment in which the centre-right message of financial prudence, self-help and independence is receptive.

And so it showed in Newcastle seats such as Charlestown (24.8% swing) and Campbelltown (20.5% swing) amongst others.

The Hunter and the Illawarra no longer have the industrial bases of times of yore, making it more receptive to the safe conservatism of Barry O’Farrell whilst the inner city is turning Green.

The glue that bound the ‘labour movement’ – a wish to express solidarity with the working class – has lost its power to bind, as ‘progressive’ voters become more interested in more abstract concerns such as ‘social justice’ and the erstwhile members of the working class no longer feel…..well…..working class.

This massive rejection of 26 March means the question of ‘what does Labor mean in the 21st century mean?’ will broadly resonate, with possible federal ramifications.

The Prime Minister attempted to set a new middle ground on which to establish the ALP In her Don Dunstan Foundation speech of 16 March 2011.

In the immediate context of arguing why its carbon reduction policies are important, she framed Labor as being between the coalition and the greens:

Neither of the extremes in Australian politics can deliver this reform (carbon reduction). The Coalition has surrendered itself to fear-mongering and denying the power of markets.The Greens are not a party of government and have no tradition of striking the balance required to deliver major reform.

She went on to say:

Like the economic transformation of the 1980s, this is a reform that can only be handled in the progressive Labor tradition…… In all of this, we draw strength from enduring Labor values - protecting jobs – always our first commitment; a sustainable environment for future generations – an environment with less carbon pollution; reform with equity, looking after those who need a helping hand; and accepting a scientific world - view in a community of reason.

For the sake of her party, this restatement of the ALP as the brokerage party of Australian politics had best resonate with sufficient numbers of electors.

Otherwise, it will face a slow descent into irrelevance, stuck between two world views based more on lifestyle than anything else, better reflecting the binary political divide of this century’s Australia than the labour/capital divide of the last.

2011 - The Year Ahead

The 2011 political year is now beginning. Here are some of the issues that will influence how it pans out.

The upcoming NSW Drubbing

It will not be an issue of whether NSW Labor will lose government on 26 March.
Rather, given that that the ALP primary vote is as low as 24% the question will be by how far.

The Hunter and the Illawarra no longer have the industrial bases of times of yore, making it more receptive to the very small ‘c’ conservatism of the Coalition, whilst the inner city is turning Green.

The glue that bound the labour movement – a wish to express solidarity with the working class – has lost its power to bind.

This reality, together with the poor condition of ‘brand Labor’ means that this could be a ‘transformational election’ – where tribal voters irrevocably change allegiance.

This could have federal ramifications as the NSW model has been the model of governance has been the template for Federal Labor.

Massively reject NSW Labor, the question of ‘what does Labor mean in the 21st century mean?’ will more broadly resonate.

Then there is the next challenge:

The Greens

The new Senate is sworn in on 1 July. From that date the dynamics of the chamber changes. All it needs is for the Government and Greens to vote together to enable matters to pass.

How will Labor handle this? Will it be like Tasmania or the ACT in which the parties act more like a coalition presenting to the chamber pre-agreed outcomes, or will there be an attempt of product differentiation between them?

Following the Queensland floods, the Prime Minister has announced the abolition, deferral or capping of a number of carbon abatement schemes, including the Green Car Innovation Fund, Cleaner Car Rebate Scheme, the Carbon Capture and Storage Flagships and Solar Flagships, the Solar Hot Water Rebate, Green Start Program, Solar Homes and Communities Plan and the Global Carbon Capture and Storage Institute – policy outcomes that will clearly rile the Greens.

However, at the same time she proposes retaining a price on carbon, something to the Prime Minister apparently akin to the floating of the dollar (as she told the National Press Club) or a driver of ‘another technological revolution like Information Technology did in the 1980s and 90s’ (as she told a recent CEDA luncheon).

Two lessons flowed from the Victorian election.

The first was that in deciding not to provide the Greens any preferences, the Victorian Libs proved that you can take on the Greens without being seen as anti-environmentalist and suffer an electoral backlash.

The second lesson was that suburbia is feeling the pinch of high utility prices.

This will be an increasing factor to take into account when ‘putting a price on carbon’ is ultimately unambiguously translated as being ‘increasing electricity costs’ as the carbon debate comes to a climax during 2011.

The Government’s attempts to balance its environmental credentials will be interesting.

Then there is:

Dealing with the States

We have commented before about the need for the Government to fund the social democratic project.

And so the Commonwealth is seeking to claw back some GST payments to the states to pay for hospital reform, whilst the current minerals resource rent tax will be used to (ultimately) increase superannuation payments to employees and ‘build essential infrastructure’.

The Commonwealth also wants to impose ‘pre-commitment’ technology on poker machines, in an endeavour to reduce problem gambing – and to give effect to a major policy concern of Andrew Wilkie, one of those on whom the Government is relying to maintain government.

However, the states are most unhappy.

Queensland’s Anna Bligh was reported as saying that ‘we are very clear here in Queensland that constitutionally as a sovereign state in our own right, we reserve the right to set appropriate royalties which are returned to Queenslanders for the minerals that are taken out of our state’.

The Victorian Coalition government's Resources Minister, Michael O'Brien, said he would not allow his state's taxpayers to "fill the federal Labor government's budget black hole", insisting royalties had always been a state right.

Finally, WA Premier Colin Barnett said his state would not hand over GST revenues.

Then there is the gambling issue, with some states concerned of (amongst other things) impact on gambling revenues – one of the few own source revenue streams left to the states,

Given that it appears the ‘tax summit’ to discuss the proposals contained in the Henry review is intended to be not much more than a talkfest, COAG will be a forum where the issue of dealing with vertical fiscal imbalance and the role of the states in the 21st century Australia will be a major issue – particularly as there are two (and very shortly, probably three) states with non-Labor governments this year.

This is before dealing with policy changes necessary to bring the budget back to surplus by 2013.

2011 will be one of the more interesting political years.

2010 - the year behind

2010 was one of the more interesting years in Australian politics as one prime minister was removed and the successor failed to seal her legitimacy in the subsequent general election.

The beginning of the end of the Kevin Rudd era was deciding not to create either a tax or market mechanism to regulate carbon emissions (or call a double dissolution election to create a ‘mandate’ to do so) to deal with the ‘greatest moral, economic and environmental challenge of our generation’ following the failure of international talks in Copenhagen the previous December.

Kicking the ‘greatest moral challenge’ into the long grass established a meme of a government that overpromised and underdelivered, something exacerbated by problems with rolling out the ‘Building the Education’ revolution school building programme and the ‘pink batts’ debacle.

The Government’s problems were heightened by the proposed imposition of a tax on mining profits without following the usual protocols of fully informing affected taxpayers of the proposed change prior to announcing the proposed change.

This led to a highly aggressive attack on the Government by the mining industry and a broad view of a government in panic mode adopting populist policies without a full assessment of outcomes.

When all this was coupled with increasing discontent about a dictatorial Prime Ministerial style and a dysfunctional office, ‘the faceless men’ of the ALP backrooms moved to replace Rudd with Julia Gillard to improve a government that had ‘lost its way’.

An early election intended to cash in on the ‘honeymoon’ of Australia’s first woman prime minister was called. But there was no honeymoon.

The legitimacy of Gillard’s ascension weighed heavily on the campaign.

Moreover, the ALP always had an ‘upside down’ coalition of inner urban progressives who were increasingly supporting the Australian Greens.

They were challenged by an Opposition who had reduced their campaign to bite size slogans, such as: ‘we’ll end the waste. Pay back the debt. Stop new taxes. Help families. Stop the boats. Do the right thing’.

This led to a string of two bob each way policies that appeared to be designed by focus group – yes to an ETS….but only after input from a ‘citizens assembly’; offshore processing of refugees……but in East Timor and not Nauru; immigration was not about numbers coming into the country………..but merely where they lived. And so on.

Labor were finally buffeted by unprecedented leaks about Gillard’s position on issues such as paid parental leave.

Ultimately, the ALP steadied but the damage was done. It became a minority government reliant on the support of country and regional independents as well as the first Australian Green elected to the House of Representatives.

Having got to Christmas, the Government has tried to frame the debate by nominating that 2011 is the year of delivery and decision.

Labor hopes to deliver on broadband and health reform and make decisions on issues such as fiscal consolidation (bringing the budget into balance) building capacity on the supply side with tax, superannuation, infrastructure and skills initiatives and extending market-based reforms to health and education, carbon (despite promising not to during the election) and water.

It will be the ALP’s burden to ensure that ‘moving forward’ with this agenda will lead to policy and electoral success.

The Liberals had a reasonably good 2010. Largely through implosion of the opponent, it was able to get within touching distance of government on the basis of stringent opposition of government proposals and making its own pitch at a (very) high level.

It will be interesting to see how much policy meat is added to the slogan like bones offered up in the election.

The final point of interest was the Liberal Party (as part of a coalition with the National Party) winning its first state or territory election in 27 attempts when it won in Victoria.

The result appeared largely to be an ‘it’s time’ result. However, there were two federal lessons to be learnt.

The first was that in deciding not to provide the Greens any preferences, the Victorian Libs proved that you can take on the Greens without being seen as anti-environmentalist and suffer an electoral backlash.

The second lesson was that suburbia is feeling the pinch of high utility prices. This will be an increasing factor to take into account when ‘putting a price on carbon’ is ultimately unambiguously translated as being ‘increasing electricity costs’ as the carbon debate comes to a climax during 2011.

Something for the Feds to consider during the year of decision and delivery.

Labor's Growing Schism

The concept of the ‘labour movement’ is in trouble in Australia.

At the start of December the political wing of the movement has had a lousy fortnight.

The Victorian Government fell.

The NSW Labor Party had to sack its party president when his union’s journal suggested it would support individual candidates from all political persuasions.

The South Australian Premier needed armed police protection to enter his own state conference to defend a union sponsored motion to dump his leadership and to defend the State Budget

Finally, a union affiliated with the Queensland ALP is thinking about standing candidates against Labor because of anger about the privatisation of assets such as Queensland Rail.

These states have (or had) long term Labor governments operating as being solid, conservative managers of the economy that moved to the centre on traditionally weak areas such as law and order and encouraged development whilst showing concern for the environment.

However, this model appears to have reached in use-by date, with the greatest pressure being placed on it by the ALP’s labour movement partner – the unions.

ACTU President Ged Kearney has publicly suggested that unions be prepared to criticise Labor publicly and be more independent of its traditional ally and her executive has endorsed a paper suggesting it be on a permanent campaign footing in a bid to advance an independent political agenda.

During the 20th century, There was a time that ‘the labour movement’ – the concept that permitted the representatives of labour and those who wished to express solidarity with the working class to operate within one political party – worked satisfactorily.

This meant in practice a coalition of employed workers and a professional class generally residing in the inner city.

However, the Greens ‘four pillars’ (ecological sustainability, social equality and economic justice, grassroots democracy and peace and disarmament and nonviolence) is an agenda increasingly appealing to a ‘progressive’ middle class constituency than one put out by a regimented party with 50% union control designed to achieve social justice primarily through the improvement of working conditions through the wages and taxation system.

At the same time both state and federal ALP governments are making decisions designed to introduce a ‘seamless economy’, including reforms designed to increase productivity – and as recent ructions illustrate, not every reform will be fully supported by unions as jobs and conditions come under threat.

The net result of trying to satisfy the social goals of the progressive professional classes and the industrial goals of the unions means that the ALP is not satisfying either part of its traditional disparate coalition.

Earlier in the year Dean Mighell openly questioned whether affiliation with the ALP remains in the strategic interests of the union movement whilst Michael Costa has again called for reform to remove the power of the union bosses.

In much the same way as there has been a ‘structural separation’ of the wholesale and retail arms of Telstra, any review of what constitutes ‘the labour movement’ may mean a structural separation of the movement’s erstwhile industrial and political arms.

As the traditional fault lines of labour vs. capital have blur to the point of being non-existent the unions can then prosecute the interests of members as they see fit, whilst the ALP can, should it choose, develop into a modern social democratic party so it can best compete in the Australian political market place of the 21st century.

What Does the 'Labour Movement' Actually Mean?

NSW Left winger Senator Doug Cameron made an interesting intervention when he claimed being in the ALP under the final months of Kevin Rudd was like having a ‘political lobotomy’, with MHRs and Senators allegedly acting like ‘zombie MPs’.

Like Greg Combet, who has called for Labor to ‘redefine itself as progressive with the core value of equity, social justice and compassion’ Cameron is concerned the party is losing ground to the Greens.

He called for the Left in the party to be able to ‘speak effectively to progressive people who are looking for a vision and a strong strategy for progressive policies.’

However, as reported by the Sydney Morning Herald:

New party rules introduced by Mr Rudd, which were designed to present a united front by stopping MPs from speaking against a Caucus position, worked in the government's favour early on but ended up costing the party.

‘There are many people within the Labor Party holding strong progressive points of view and progressive voters don't know this,’ he said.

‘The pledge system and the party system just puts a blanket over every different point of view.‘Everything is focused on the spin and on the take of the day and long
term strategic policy decisions suffer because of that.’

Prime Minister Julia Gillard said in response to the Senator's comments that she made it clear to Caucus she wanted more debate and new ideas about policy direction. But the pledge system would stay, Ms Gillard said.

One of the reasons that Australian politics is the most rigid in the world is the because of ‘the pledge’: the promise that ALP members make to uphold the party platform and to follow decisions made by Caucus.It is this practice that has provided Australia with the most rigid party system in the Westminster world.

This may have been appropriate once upon a time where one centre left party opposed a single coalition of the centre right, but may be less appropriate now.

As we have previously observed:

The ALP voting coalition has hitherto consisted of self identifying members of the labour movement, people with English as a second language, income transfer recipients, public sector workers, the arts sector and high income professionals who are both secularist and internationalist in orientation.However, the Greens message - guided by the so-called ‘four pillars’ (ecological sustainability, social equality and economic justice, grassroots democracy and peace and disarmament and nonviolence) is apparently more amenable to a ‘progressive’ middle class constituency than one put out by a regimented party with 50% union control designed to represent the ‘labour movement’ and achieving social justice primarily through the improvement of working conditions and changes to the wages and salaries system.

Despite winning the federal election, the ALP looks like they are going through the introspection usually undertaken by the losing side.

Eyes now turn to Victoria, where the Greens could get up to 19% of the vote and a number of seats in the Legislative Assembly – possibly even holding the balance of power.

This will mean the ‘quo vadis’ question being asked with increased vigour.

As Labor voters from the ‘moral middle class’ feel able to vote Green the traditional ALP ‘upside down coalition’ of social progressives and the traditional ‘working class’ is now under great strain.

Rather than claiming to be in favour of ‘equity, social justice and compassion’ (which sounds as meaningful as being in favour of ‘truth, justice and the American way’) Labor will need to redefine what ‘the labour movement’ – the concept that permitted the representatives of labour and those who wished to express solidarity with the working class to operate within one political party - means in the 21st century.

This would be advanced by open public discussion of policy and political options – the idea of smothering debate may not be helpful.

Antony Green has observed that the NSW ALP now has the same voter share as the party had in 1904, with the current mob possibly being the last ‘in its own right’ Labor government in the state.

If the Party gets the redefinition of what the ‘labour movement’ means wrong, this could be their fate everywhere.

Feisty Overseas Advocacy - But Only If I Hafta

In an interesting 7.30 Report interview following her first overseas trip, Julia Gillard said:

KERRY O'BRIEN: This is your first overseas trip as Prime Minister. There must be something of a sharp learning curve in all this for you. All domestic portfolios until now; suddenly you're meeting 11 world leaders in a day. Have you found your comfort zone yet?

JULIA GILLARD: Oh, look, Kerry, I'm obviously working my way through. Kerry, I'm just going to be really upfront about this: foreign policy is not my passion. It's not what I've spent my life doing. You know, I came into politics predominantly to make a difference to opportunity questions, particularly make a difference in education. So, yes, if I had a choice I'd probably more be in a school watching kids learn to read in Australia than here in Brussels at international meetings. That's what took me into politics, that kind of education work. But obviously in this role I will serve as Prime Minister doing the full job, and the full job includes coming to places like Brussels to be a feisty advocate for Australia's national interest. And that's what I will do. It's what I'm doing here.

This is no surprise to us. As we said earlier:

Gillard is very much, as Trevor Cook put it, one of Whitlam’s grandchildren:

Throughout his political career, Whitlam pursued a philosophy of “positive equality”, and he sought to change the national debate and the role of the national parliament.

Positive equality is not about the old battles between capital and labour; it is about removing barriers to self‐improvement and overcoming disadvantage and deprivation through national approaches to policy areas like health, education and transport that emphasise universal access. For Whitlam, positive equality was also about community‐building and social cohesion. In many ways it is a middle‐class and gradualist reform agenda which envisages the use of government to ensure the benefits of economic prosperity are used to create better opportunities for individuals and communities.

The interview followed a mini-spat as to whether Tony Abbott should have accompanied Gillard to a trip to Afghanistan on his way to the British Conservative Party conference.

In the event, he was going to visit on the way back - although his excuse that he didn’t accompany the Prime Minister because he would be ‘jetlagged’ for the Conference looked and sounded dopey.

This, together with Liberal allegations the government displayed ‘low bastardry’ in allegedly leaking the fact he knocked back accompanying the PM was a fascinating scandalette.

Only one thing was missing – a treatment of the appropriate role of Australian forces in Afghanistan as well as the standard of their kit.

Both leaders are clearly at home dealing with domestic issues.

The concern we have is that when you have leaders who think government is a glorified state government – a mere service provider – and who place their policy emphasis in areas like education (important as that is) and deal with other issues such as defence and foreign affairs only when they really, really ‘gotta’ means that these issues don’t get the attention they deserve.

All the benefits of a federal system are lost – and the Australian national interest suffers.

A kinder, warmer Parliament?

With an apparently hung Parliament, calls have been made for a more ‘consensual’ Australian legislature.

One of the reasons that Australian politics is the most rigid in the world is the because of ‘the pledge’: the promise that ALP members make to uphold the party platform and to follow decisions made by Caucus.

It is this practice that has provided Australia with the most rigid party system in the Westminster world.

If there is to be a truly consensual brand new political world, this is a practice wel worth reviewing.

We discussed this issue in a post dated 14 September 2009. It is republished below:




Senator Judith Troeth recently crossed the floor to vote with the Government in support of their plan to stop charging asylum seekers and immigration detainees for their mandatory detention.

Immigration Minister Chris Evans lauded her for her decision.

On the same day, three ALP MPs endorsed a petition calling on the government to retain the prohibition on parallel importation of books.It will be interesting to see if they cross the floor should the Government decide to remove the ban.

It is not often that ALP members cross the floor. This is because party rules prevent it.

In particular, Rule 5 says (in part):

d. The Federal Parliamentary Labor Party shall have authority in properly constituted Caucus meetings to make decisions directed towards establishing the collective attitude of the Parliamentary Party to any question or matter in the Federal Parliament, subject to:

i. at all times taking such action which may be possible to implement the Party's Platform and Conference decisions;

ii.on questions or matters which are not subject to National Platform or Conference or Executive decisions, the majority decision of Caucus being binding upon all members in the parliament; and

iii. no attitude being expressed which is contrary to the provisions of the Party Platform or any other decision of National Conference or National Executive

The existence of this rule in particular weakens the role of all Australian parliaments.

In Westminster, party whips divide votes into three categories.

In very trite terms:

a ‘one line whip' tells members what the party line is, however, there is a degree of discretion as to whether the line is followed;

a ‘two line whip’ is a debate in which a member is expected to vote in according to the party line, unless there is a strong conscientious objection; and

a ‘three line whip’ is a debate where the member should simply follow the party line.

However, all that said, there are many circumstances in which members of the House of Commons have 'rebelled' from the Whip and voted against party, notwithstanding the declaration of a three line whip.

Ask yourself: how often do you see an ALP member 'cross the floor' in Parliament?

The answer is 'seldom' - and when they do, they are usually disciplined.

In that case, it is hardly surprising that the alternative political grouping becomes as rigidly controlled - if they weren’t, common sense tells you they would never win a parliamentary vote.

There are many circumstances where party discipline means that MPs are voting for a proposal against their better judgement.

The best way to ensure that legislation is appropriate is to ensure that there is a properly functioning parliament with members making decisions according to their conscience and not their party whip.

Matters may very well be assisted if the ALP abolished its rule.

End Game?

The election is over. The likely result is a hung parliament.

As we said previously:

The presence or absence of a national broadband network, an absence of a mining tax, temporary protection visas and the extension of unfair contract laws to small business are the only real areas of difference – most other things are differences in emphasis and timing.

(Although more on the NBN, anon.)

For all of that, both Abbott and Gillard are representatives of their respective strands of thought.

Gillard is very much, as Trevor Cook put it, one of Whitlam’s grandchildren:

Throughout his political career, Whitlam pursued a philosophy of “positive equality”, and he sought to change the national debate and the role of the national parliament. Positive equality is not about the old battles between capital and labour, it is about removing barriers to self‐improvement and overcoming disadvantage and deprivation through national approaches to policy areas like health, education and transport that emphasise universal access. For Whitlam, positive equality was also about community‐building and social cohesion. In many ways it is a middle‐class and gradualist reform agenda which envisages the use of government to ensure the benefits of economic prosperity are used to create better opportunities for individuals and communities.

Hence, however constitutionally iffy the proposals are in a post Pape world without a section 96 agreement with the States, Gillard was always at her strongest when she was ‘educational Julia’ promising improved teaching and schooling standards.

Conversely, Abbott is very much from the ‘Christian democrat’ (or Catholic Liberal) wing of the Liberals, with a focus on traditional social values and a respect for individual effort, whilst mindful for the need of social solidarity and more comfortable with a greater level of regulation of market forces than some of his colleagues – hence support for things like substantial tax rebates for education expenses and paid parental scheme paid for by big business whilst wanting to ‘stop the boats’ and remove ‘big new taxes’ (etc).

It was therefore unsurprising when Abbott said in his last address to the National Press Club for the election that he wanted to ‘transform Australia from ‘welfare state to opportunity society’ by linking new workforce initiatives to his economic agenda:

My ambition is for us to make the journey from welfare state to opportunity society ... which preserves the comprehensive safety net but which eliminates the cancer of passive welfare.

(Why this wasn’t said by him more often when the Liberal campaign was criticised for having nothing to say in the middle weeks of the campaign is beyond us.)

However, that said, despite different starting points the practical end point is that the policies of the two parties constitute a welfarism that differs only in emphasis as to the manner of implementing outcomes in broadly agreed areas.

This absence of shade and light led to state issues (particularly relating to government competence in NSW and Queensland) having disproportionate influence in the election.

The net result: a draw in the number of seats.

It may well be that the ALP will form government.

However, the large Greens vote could mean that they become Labor’s ‘new Country Party’, pushing them leftwards and away from the ‘Sussex Street’ Labor model of representing the ALP as being solid, conservative managers of the economy, moving to the centre on traditionally weak areas such as law and order and encouraging development whilst evincing a general (but not overwhelming) concern for the environment.

This leftward push could be paradoxically assisted by having to deal with the ‘Old Country Party’ – the three independent country members holding (at time of writing) the balance of power, with views on issues such as transfer payments to ‘worthy’ recipients being surprisingly similar to city progressives.

It would be something if perhaps the only significant difference between the parties – the national broadband network – is the thing that will settle who will form government.

This Parliament could inadvertently mark the commencement of the political paradigm of the 21st Century, as the ‘labour/capital’ divide of the 20th century is replaced by one block representing a ‘secular humanism’ (typically found in voters in inner urban Australia), balanced by a block representing small ‘n’ nationalist and ‘aspirational’ values found more commonly in suburban and provincial Australia.

We live in interesting times.

Election 2010 - the half way point

The Australian election is now half over.

Following the ‘leaders debate’ the major parties started the process of making, as they always do, targeted promises to win specific constituencies as the ‘momentum’ magically builds one way or another.

And so the ALP made promises in areas such as hospital staffing, suicide prevention, water harvesting from stormwater drains, a disability strategy….… and a rail link to Redcliffe (met and matched by the Opposition, to the surprise of the local candidate).

The Liberals made promises on slowing the growth of marine parks, a ring road for Cairns, an education card for disabled students and their version of hospital funding, with their largest promise being a promise to reduce company tax to the general level promised by the ALP…..a bit of a surprise given the Leader had previously said ‘no one much is going to notice a 2 per cent cut in company tax’.

However, the Kevin Rudd issue – how he was dumped and what he would do in the future – as well as strategic leaks about what Julia Gillard may or may not have thought about pension increases and paid maternity leave dominated the second week, leading to a dysfunctional looking ALP and polls showing the Liberals either tied with or just ahead of Labor at the end of week 2.

And so week 3 began with the ‘old’ Julia Gillard becoming ‘feisty Julia’, taunting Abbott to debate her on economics as well as doing wild and risky things like riding on the campaign media bus (!) whilst Tony Abbott continued to campaign in the restrained manner of the front runner, concluding with a policy launch long on contrasts with Labor but short of policy specifics.

The reason why cosmetic issues like the ‘old Julia’ has changed into the ‘new Julia’ is so newsworthy is because there are few massive differences between the parties.

The presence or absence of a national broadband network, an absence of a mining tax, temporary protection visas and the extension of unfair contract laws to small business are the only real areas of difference – most other things are differences in emphasis and timing.

This should be expected because of the way Australian politics is structured.

There are two main reasons for this.

Compulsory voting means that so called ‘rusted on’ voters can be overlooked.

This leads to a practical exercise of what is called Hotelling’s Law, which presumes that the optimal place for a business (or political party) to focus its attention is the perceived half way point of its target market.

Thus in this context everything is aimed at the ‘swinging voter’ in the middle of the political spectrum.

Moreover, it is our experience that many (if not the majority) of people involved in parliamentary politics could just as easily work for the other side.

This is because those who choose to participate in politics are generally middle class tertiary educated people who are vaguely socially progressive, and whilst not anti-market nevertheless possess a belief in an activist government that can intervene to improve the lot of society, usually through the continued creation of entitlements to ‘worthy’ recipients falling within targeted eligibility grounds.

It is also the case that they are overwhelmingly young and with little experience in small business (in particular) or in broader community life.

The result is that parliamentary government is in the hands of a narrow political class with an equally narrow world view.

Little wonder that this election is one of the most soulless ever conducted.

For all of that, we are now in the second half of the campaign. The ‘new Julia’ appears to have steadied the ALP ship and is segueing towards her preferred battleground of eduction.

Conversely, the coalition campaign appears to have remained still for the better part of week 3, as Labor went through their woes.

However, they may have played it too safe.

Despite all the tremors within Labor, attacks on Abbott’s economic credentials and readiness for government and an absence of strong coalition positives may have had an effect - the ALP is now marginally in front.

Gillard’s incessant requests for a debate on economics may also have had some effect, as both she and Abbott are to front the same public meeting at the delightfully named Rooty Hill, in Western Sydney.

This will undoubtedly be the starting platform for the last stanza of election 2010.

Election 2010 - Small Business Policies

One area of the 2010 election campaign that hasn’t been particularly discussed thus far has been election policies specifically addressing small business to be implemented over the next parliament.

This is a brief review.

The ALP

The ALP is generally standing on what it has done for small business in the life of this parliament – things such as a superannuation clearance house within the ATO, the creation of a small business advisory committee and a handbook to assist independent contractors.

Prospectively, the ALP proposes giving small business the ability to instantly write off assets costing up to $5,000 and cut the corporate tax rate from 30 per cent to 29 per cent as from 1 July 2012 - one year earlier than larger companies.

However, this would appear to be subject to the passage of what is now called the Mineral Resource Rent Tax applicable to iron ore and coal projects.

Moreover, another part of the suite of measures to be funded by the MMRT is an increase in the superannuation guarantee from 9% to 12%.

The supporting documentation indicates the increase in superannuation will ‘affect… wage negotiations between employers and employees’, an observation implicitly recognising that employers are ultimately responsible for funding superannuation.

If it comes to pass, it will be interesting to see how much of the reduction in the tax rate will be retained in the business if during these negotiations the reduction is identified as a source supporting an increase in overall employee remuneration (including the rise in superannuation).

However, reductions in company tax rates will be of little interest if a business is caught up by a possible change to personal services income laws.

Personal services income

On 19 December 2009 the Assistant Treasurer (Senator Sherry) received a Board of Taxation review on the area.

Releasing the report, he said the Board had found:

‘a low level of compliance and a degree of uncertainty or ‘greyness’
around the rules, such that it has found the alienation of personal services income rules in their current form do not provide acceptable levels of integrity and equity…. This means that ordinary workers may be missing out on proper pay, proper super entitlements and a range of other employment conditions such as long-service and other leave entitlements.

It concluded:

The use of sham contractors is a threat to the integrity of the taxation system and a threat to working conditions of employees – and the Rudd Government is determined to see an end to its inappropriate use.

The Government decided it would wait for the final report of the Henry Review into taxation before deciding what to do.

Recommendation 10 of the Henry Review was:

Consideration should be given to a revised regime to prevent the alienation of personal services income that would extend to all entities earning a significant proportion of their business income from the personal services of their owner-managers, whether in employee-like or non-employee-like cases. This regime may also apply an arm’s length rule to deductions arising from payments to associates to ensure deductions reflect the value of services provided.

This would appear to require businesses to distinguish between income earned from capital as opposed to labour, adversely affecting all ‘knowledge professionals’ from consultants to barristers, and from accountants to computer consultants.

It would certainly appear capture most home based micro businesses – which many in the bureaucracy have never accepted as ever being ‘real’ businesses.

In our experience its view is if you can’t see stock or staff you are not in business but either (depending on your taste) a ‘true’ employee in an arrangement to rort the tax system or a simpleton ripe for exploitation.

The Coalition has said that it will not change the current personal service income laws as ‘no case has been made or evidence provided to justify changes to force independent contractors and self employed people into more ‘employee-like’ arrangements’.

This appears to be a solid commitment. However they are also considering how they are going to respond to the Henry Review.

It would therefore remove all doubt if the Coalition would expressly confirm that Recommendation 10 will not be considered as part of the response to Henry Review.

Otherwise be interesting to see if it will get new life once the Treasury starts providing them with advice, should they win.

Gotta protect the integrity of the tax base y’know. And so forth.

It will be interesting if the ALP will make any commitments about its treatment of PSI during the election.

The Coalition

The Coalition have countered Labor’s proposed company tax cut with a 1.5 per cent cut in the company tax rate from company tax from 30% to 28.5% on July 1 2013.

It is to be hoped that this commitment can be afforded, and is not a cynical ‘meet and beat’ commitment to retain the mantle of being ‘the party of small business’ during the election campaign, to be discarded in the name of fiscal responsibility once in government.

The Coalition has made a number of other commitments.

Proposed coalition changes to government structure

There will be a cabinet level ‘small business’ minister. This is symbolically important although the more valuable component of this promise is the requirement for cabinet submissions to address how proposals impact small business.

The mere fact of having to write something requires those having to prepare ‘cab subs’ to at least think about the issue.

A proposed ‘small business’ representative on the Taxation Board of Review is also symbolically important, although it will be interesting to see how the impact of having this proxy representation can be measured in practice.

Government agencies will have to use procedures and practices to ‘that do not disadvantage small business participation and instead, actively encourage it.’
Governments of all persuasions promise this.

However, in many circumstances public servants involved in letting tenders have neither the information to make informed decisions in favour of selecting smaller businesses nor the time to gather it. And you can never be blamed for anything if you’ve ‘bought IBM’.

Public sector procurement and prudential rules, which are costly to comply with in their own way for both contract manager and service provider are also unlikely to be loosened.

So it will be interesting to see what will be different this time.

Businesses will also be able to charge interest if payments for any service provided are late - although whether the costs involved (particularly in time) in chasing up the interest amounts that can be charged may make this right somewhat problematic.

A Small Business and Family Enterprise Ombudsman is to be created to ‘provide an advocacy, dispute resolution and support role for the sector’ across the government.

Given that every small business in Australia could contingently be a ‘client’ of this proposed agency, the indicator of how committed the Opposition is to this initiative will be how well the Office will be funded.

It is noted that whilst the Victorian Small Business Commissioner is reasonably well funded, equivalent offices in the ACT and SA were early sacrifices to budget savings.

It will also publish with a series of ‘better practice guidelines’ to explain and encourage’ fair commercial conduct’.

‘Guidelines’ to become a ‘better corporate citizen’ are all well and good, but mere publication aren’t much practical help to a shopkeeper having a dispute with a supplier or landlord if they have little actual effect, particularly if the proposed Ombudsman is ill-equipped to provide much more than moral support.

It may be better if these proposed guidelines had some legal effect.

The proposed Australian Consumer Law to commence operation on 1 January 2011 will permit small businesses can take action where there has been ‘unconscionable conduct’ in trade or commerce.

The relevant provision sets out things to take into account when considering whether unconscionable conduct has taken place.

It would be better if any proposed guidelines must be taken into account when considering whether unconscionable conduct has been displayed.

This would increase the impact of any guidelines that might be issued.

Changes to trade practices law

The Coalition has promised it will to extend the unfair contracts protections available to consumers to small business.

This will mean that small business will be able to avoid ‘unfair’ standard form contracts in the same way ordinary consumers can under the proposed Australian Consumer Law to commence operation on 1 January 2011 – something the current government removed from legislation immediately prior to its introduction into Parliament.

Finally, the Coalition promises another review of the Trade Practices Act – soon to be called the Competition and Consumer Act - which is to be focussed on ‘giving small business a fair go’.

As The Australian noted on 21 July 2010 there have been 59 different reviews of the old Trade Practices Act in the past decade.

It is difficult to see what will be achieved here that wasn’t achieved by the Trade Practices Act review that gave rise to what was known as the Dawson Report which had terms of reference that included examining whether there was ‘an appropriate balance of power between competing businesses, and in particular businesses competing with or dealing with businesses that have larger market concentration or power’.

This is particularly the case, given that shadow Treasurer said of the review in his budget reply to the National Press Club:

There may not be a need to dramatically change our competition policy and regulatory frameworks, but there is a need to consider what changes could be made so that market efficiencies and productivity enhancements are maximised.

The Australian reports that Bruce Bilson, the relevant Shadow Minister, is ‘keen for it to go along the lines of a Productivity Commission review’.

If the matter goes to the Productivity Commission, there is unlikely to be any real change to the current legislation.

This is because it has consistently confirmed the importance of ensuring that allocative efficiency is maintained – any changes that it considers may affect innovation or market dynamism such as for instance, changing the test that allows a harsh contract to be reviewed from ‘unconscionable conduct’ to ‘unfair conduct’ (as is the test in the Independent Contractors Act) may not win favour.

The Coalition has always had to square the competing interests within its electoral coalition of the Big End of Town, with its eyes on ensuring they maintain the scale to compete internationally with the Small End of Town, which perceives the need for some protection against larger corporations because of inequality of bargaining power – hence the somewhat tortuous drafting of current trade practices law.

The Coalition therefore really needs to indicate whether they are being ‘fair dinkum’ in giving small business a ‘fair go’ in this context.

Election 2010

Labor clearly won the first part of week 1 of the campaign for the 21 August federal election.

They commenced as frontrunners, with publicly available opinion polls suggesting they were ahead 55/45.

They were also aided by a slow start from the Liberals as well as confusion over the Opposition’s industrial relations policy.

The previous Workchoices policy was supposed to be ‘dead buried and cremated’ - however, Liberal spokesmen suggested the legislation could still be ‘tweaked’ (whatever that meant).

The great difference between Workchoices and the current legislation is the primacy of the industrial award as the basis of determining wages and conditions, as opposed Workchoice’s built in bias towards some form of individual contract.

Why they couldn’t say that in Government the coalition would retain the award system and not reintroduce the concept of unfair dismissals (if that’s what they wanted to do) without winding up into knots over whether or not they would touch any sort of legislative instrument related to the Fair Work Act currently in place over the next three years is beyond us.

As for Labor, however repetitious it was, the ‘moving forward’ mantra confirmed the idea that Kevin Rudd was no longer the leader. Noting infrastructure pressures was also a sound message to sell into Middle Australia.

However, things started to slow for them midweek.

Firstly, Kevin Rudd appeared, reminding people he wasn’t dead after all. Focussing on him soaked up around two days of the campaign week.

This took from view promises both sides made on what can be claimed under the education tax refund scheme as well as the Liberal’s re-announcement of its hit list of expenditure savings.

The remainder of the week underlined the difficulty Labor has keeping its bifurcated constituencies of inner urban progressives and outer suburbanites together.

As Bernard Salt said in an Australian article on 13 August 2009, a significant and growing cultural divergence has evolved in Australian cities between different social groups between those who live in the inner city and those who live on the city’s edge.

The traditional ALP voting coalition has generally consisted of self identifying members of the labour movement, people with English as a second language, welfare recipients, public sector workers, the arts sector and high income professionals who are secularist and internationalist in orientation.

On one analysis, Julia Gillard is well placed to keep this disparate coalition together.

In the Weekend Australian on 16 February 2002, Matt Price described Julia Gillard as someone with the cheese-grater voice of a Footscray fishwife and a the multi-shaded hairstyle of a Toorak trendoid.

At a memorial service held on 14 December 2007 after Price’s death, Gillard indicated she had corrected Price, claiming she had the cheese-grater voice of an Altona fishwife and the multi-shaded hair of a Fitzroy trendoid.

Altona fishwife and Fitzroy trendoid. This sums up the disparate nature of the ALP constituency.

The danger for Labor is that they have the problem that in trying to straddle both sides of the fence they will satisfy neither trendy nor burby.

A confusing message could mean they don’t stand for anything or anyone.

For example, during the week the Prime Minister claimed that the whilst she believed in global warming and the price of inaction about it was ‘too high a price to pay’, promising an emission trading scheme some day – something for Fitzroy.

However, the political process has to be tied to a ‘community consensus’.

The result a review of the proposed ETS during 2012 – but not before a ‘citizens’ assembly’ debates the issue over 12 months to assist in building community consensus (slowing the introduction of the ETS and thus a price on carbon, with its inherently higher consumer costs that it imposes) – something for Altona.

This idea (particularly the ‘citizens’ assembly’) was universally panned – in trying to please everyone they pleased nobody.

Promising offshore processing of asylum seekers arriving by boat (something for Altona) but not at Nauru (as it hadn’t signed the UN Refugees Convention – something for Fitzroy) similarly appeared to please no-one.

A final example was where the Prime Minister argued that the population debate she commenced was less about immigrant numbers but rather where skilled migrants were going to live.

However, as ex-leader Mark Latham said, it was a phoney debate. He went on to say:

If it's not an immigration debate, it's no debate…………and I'll tell you what it is, it's a fraud. It's an attempt to con people in western Sydney that she's going to do something about congestion.

Nevertheless, these problems ultimately didn’t alter Labor’s frontrunning position.

By weeks end, the Morgan poll still showed the ALP with a 54/46 margin (with a high number of women indicating they will vote Labor), although the last Newspoll had it 52/48.

The Liberals were aided by a ‘nothing to see here move along’ debate between the two leadership contenders (which really was a joint news conference) in which Abbott won by not losing to Gillard (the more accomplished public speaker) and Abbott getting through a 7.30 Report interview unscathed.

And so the second stanza commences with the challenge for the Liberals is whether an Abbott led party can be plausibility regarded as The Champion of Suburbia as well as getting over a perceived problem with women voters.

As frontrunners, it is Labor’s challenge to show that it is not trying to be too clever by half.

Are All These Leadership Changes Healthy?

Labor has replaced Kevin Rudd with Julia Gillard.

Others have commented on the machinations leading to the change, so we will leave it to others to comment on its political benefits to the ALP, whilst history can decide whether stories of temper outbursts and dysfunctional decision making will mean Rudd will be regarded as Labor’s Billy McMahon.

We will examine matters from another angle: the parliamentary parties of the 42nd Parliament have functioned as they should have - as representatives of the constituencies they represent.

The Liberals have seen four leaders (Costello (very nominally), Nelson, Turnbull and Rudd) and the ALP two (Rudd and Gillard).

For the Liberals, the retiring Costello was replaced by Nelson, who was the most attractive ‘not Malcolm Turnbull’ candidate standing as leader.

This was appropriate for a party room not totally sharing the inner urban policy priorities that Turnbull represented – from things like placing a greater weight on the environment as an abstract issue through support of policies such as the Emission Trading Scheme (ETS) to possessing less hawkish view on boat arrivals, and so forth.

Nelson was then removed for simply not cutting it. This is rational behaviour for a parliamentary party aiming for early return to government. The party turned to Turnbull – the only candidate making himself available.

Turnbull was replaced in turn by Abbott, largely over the ETS.

It will be remembered that Turnbull staked his leadership on the policy.

He didn’t make the argument well enough to persuade the majority of the party room to abandon the views of core supporters – those who were genuinely climate sceptics or believed in the low taxation and limited government participation in the economy, as well as those for whom the fear of increased costs and possible loss of employment opportunities as a result of the introduction of the ETS trumped general concerns about ‘the environment’.

The net result is an Opposition Leader running a traditional platform for a centre right party, with its emphasis on opposing ‘great big new taxes’ on everything, preserving national security and so forth.

The Rudd/Gillard change illustrates the same dynamic.

Rudd announced so many policy initiatives to solve The Greatest Moral Threat of our Time (or similar rhetoric) in so many areas the view was formed that he overpromised and underdelivered.


The ALP (particularly the NSW Right) see themselves as the guardian of the various programmes incrementally introduced by Labor over the course of time, doing (to coin a phrase) whatever it takes – to the point of appearing nihilistic – to ensure electoral success.

Rudd’s lack of programmatic specificity in speech left this at risk.

The ALP also remains part of the overall union movement.

As Paul Howes said on Lateline on 23 June 2010:

TONY JONES, PRESENTER: One of the key moments of tonight's extraordinary developments was the announcement that the Australian Workers Union had lost
confidence in Kevin Rudd and was backing a move to Julia Gillard. Well the national secretary of the AWU is Paul Howes. He joins us in the studio. Why did you do that?

PAUL HOWES, NATIONAL SECRETARY, AUSTRALIAN WORKERS' UNION: Well we've been looking at what's in the best interests of the members of our union. We know that if Tony Abbott is elected as a prime minister of Australia, Work Choices will be back, the legislation which ripped away fairness from our workplaces will be reinstituted on our members, reimposed on our members, and we know that Labor's message had been lost for the last few weeks, and in fact months, under the Prime Minister's leadership. We have to look at what's in the best interests of our members of our union to ensure fairness remains in our member workplaces and we think that Julia Gillard is the best option to lead Labor to victory at the upcoming election.

Given the relative influence of the factions and unions over the parliamentary ALP, Caucus elected a new Prime Minister who said in her first public statement after taking the job:

And….I believe fundamentally that the basic education and health services that Australians rely on and their decent treatment at work is at risk at the next election.

I love this country and I was not going to sit idly by and watch an incoming Opposition cut education, cut health and smash rights at work.

A very traditional Labor platform.

So, there it is.

After some policy deviations the two major parties have come up with leaders reflecting their traditional values – all as a result of the parliamentary parties acting more proactively against decisions made by the executives of the parties than Australians have become accustomed.

It is now up to the electorate to decide who will form the new government.

The Australian Greens - the new Country Party (or perhaps a bit more?)

Tasmania has just held an election.

After achieving 20% of the popular vote and 5 seats in a 25 seat Assembly, and deciding to prop up a minority Labor administration, the Greens now have a seat in the Tasmanian Cabinet – an Australian first.

This follows an agreement by the Greens Party in the ACT to support a minority Labor Government contained in a document perilously close to looking like an old fashioned coalition agreement.

The Greens there were able to strike their agreement after winning over 15% of the vote and 4 seats in a 17 seat legislature.

Whilst these are outcomes obtained in parliaments elected via proportional representation they could portend the future of legislatures constituted by single seat constituencies.

As demographer Bernard Salt has noted there is a social and economic division between those who live in the inner city and those who live on the city's edge:

…... I am suggesting that there is almost a regionalisation of wealth, income and culture based on urban geography.

Battlers, migrants and assorted low-income earners who formerly lived in the inner city are now being flung out, as if by some centrifugal force, to the city's edge.

What is left in the inner city is an odd coalescence of tribes - namely students, singles, couples, dinks, gays, expats, corporates, divorcees and, most important of all, the professional and entrepreneurial classes.

And to this lot I might add the entertainment, information and media glitterati. As a general principle, none of this class would ever think of living more than 10km from the city centre.

The ALP voting coalition has hitherto consisted of self identifying members of the labour movement, people with English as a second language, income transfer recipients, public sector workers, the arts sector and high income professionals who are both secularist and internationalist in orientation.

However, the Greens message - guided by the so-called ‘four pillars’ (ecological sustainability, social equality and economic justice, grassroots democracy and peace and disarmament and nonviolence,) is apparently more amenable to a ‘progressive’ middle class constituency than one put out by a regimented party with 50% union control designed to represent the ‘labour movement’ and achieving social justice primarily through the improvement of working conditions and changes to the wages and salaries system.

So, why could the Greens be the new Country Party? As the bulk of the Country/National Party votes tend to be geographically clustered, so similarly much of the Green vote is clustered in the inner city.

They are on the cusp of winning seats at state level such as Marrickville and Balmain in NSW; Melbourne, Richmond and Northcote in Victoria; and at federal level, (as Lindsay Tanner is only too well aware) seats such as Melbourne.

Recent opinion polls indicate that at state level (in particular) the ALP primary vote is dropping.

For example, the most recent polling in Victoria suggests that for the first time in a long time the Liberal/National primary vote (38%) is higher than the ALP primary vote (37%).

A hung parliament here is not unthinkable.

The Greens vote is at 14%.

Given the decline of long term state Labor governments and an increasing perception of the Greens as a legitimate party of government many ‘progressive’ voters may consider that a primary vote for the Greens is not wasted and vote for them in such numbers they can break through and win seats.

Now, it must be said it is difficult to believe that Greens rank and file members would endorse an arrangement with the Liberals.

What’s left?

Drawing on the ACT/Tasmanian precedents, a party prepared to prop up a larger party, capable of winning specific concessions for the interests they represent.

Just like the old Country Party.

One final observation.

As the current British elections are demonstrating, the old two party system is breaking down with voters on the ‘progressive’ left prepared to leave Labour for the Liberal Democrats.

Who knows? If the Greens can internally make the jump from party of protest to party of government, perhaps the Greens can assume a similar role in Australian politics.

We live in interesting times.

Why is crossing the floor such a novelty?

Senator Judith Troeth recently crossed the floor to vote with the Government in support of their plan to stop charging asylum seekers and immigration detainees for their mandatory detention.

Immigration Minister Chris Evans lauded her for her decision.

On the same day, three ALP MPs endorsed a petition calling on the government to retain the prohibition on parallel importation of books.

It will be interesting to see if they cross the floor should the Government decide to remove the ban.

It is not often that ALP members cross the floor. This is because party rules prevent it.

In particular, Rule 5 says (in part):

d. The Federal Parliamentary Labor Party shall have authority in properly constituted Caucus meetings to make decisions directed towards establishing the collective attitude of the Parliamentary Party to any question or matter in the Federal Parliament, subject to:

i. at all times taking such action which may be possible to implement the Party's Platform and Conference decisions;

ii.on questions or matters which are not subject to National Platform or Conference or Executive decisions, the majority decision of Caucus being binding upon all members in the parliament; and

iii. no attitude being expressed which is contrary to the provisions of the Party Platform or any other decision of National Conference or National Executive

The existence of this rule in particular weakens the role of all Australian parliaments.

In Westminster, party whips divide votes into three categories.

In very trite terms:

a ‘one line whip' tells members what the party line is, however, there is a degree of discretion as to whether the line is followed;

a ‘two line whip’ is a debate in which a member is expected to vote in according to the party line, unless there is a strong conscientious objection; and

a ‘three line whip’ is a debate where the member should simply follow the party line.

However, all that said, there are many circumstances in which members of the House of Commons have 'rebelled' from the Whip and voted against party, notwithstanding the declaration of a three line whip.

Ask yourself: how often do you see an ALP member 'cross the floor' in Parliament? The answer is 'seldom' - and when they do, they are usually disciplined.

In that case, it is hardly surprising that the alternative political grouping becomes as rigidly controlled - if they weren’t, common sense tells you they would never win a parliamentary vote.

There are many circumstances where party discipline means that MPs are voting for a proposal against their better judgement.

The best way to ensure that legislation is appropriate is to ensure that there is a properly functioning parliament with members making decisions according to their conscience and not their party whip.

Matters may very well be assisted if the ALP abolished its rule.

Putting the unions back into government

The Australian has reported the recent ALP National Conference decided that:

…unions will be appointed to federal government boards,, committees and advisory bodies in a move that will increase their influence over critical national policies.

The decision, negotiated as part of a workforce package by Julia Gillard and senior union leaders at the ALP national conference [on July 31] follows increasing anger at their exclusion from some of the Rudd Government’s key advisory bodies, including the Henry tax review.

The Review of the Corporate Governance of Statutory Authorities and Office Holders, usually called the Uhrig Review was published in 2003.

It is the template guiding how government boards and other administrative structures are established that has been broadly been followed by governments of both persuasions.

Whilst at page 93 of the Review suggests representational appointments are ‘entirely appropriate’ for advisory committees it says at pages 98 - 99:

The review does not support representational appointments to governing boards as representational appointments can fail to produce independent and objective view. There is the potential for these appointments to be primarily concerned with the interests of those they represent, rather than the success of the entity they are responsible for governing. While it is possible to manage conflicts of interest, the preferred position is to not create circumstances where they arise.

At page 100, Uhrig suggests that ‘better practice’ means that:

In getting the best from boards, appropriately experienced directors are critical to good governance

and

Representational appointments to boards have the potential to place the success of the entity at risk.

It would be unfortunate if government boards and committees of inquiry charged to investigate specific policy issues requiring technical expertise were again weighed down with people who are ‘the honourable member’ for a specific sectoral interest.

That runs the risk of decisions made by these bodies being captured by those interests.

The public interest is not served.

This is one decision of the ALP National Conference that requires review.