The real roots of Labor’s crisis

The explanation for Labor’s unpopularity this election goes deeper than recent history, writes James Supple

Labor’s primary vote this election sunk to 33.8 per cent, its lowest vote since the Second World War. Recriminations are coming thick and fast as Labor MPs blame Rudd and one another for their failure.

The real source of Labor’s woes is its addiction to neo-liberal economic policies and its shift to the right that have made it almost indistinguishable from the Liberals. This began with Hawke and Keating in the 1980s and continued under the leadership of both Rudd and Gillard.

After the post-war boom fell apart and brought on capitalist crisis in the mid-1970s, a ruling class consensus around neo-liberal policies developed. Not only did Labor swallow this, it was responsible for driving these policies through in Australia, carrying out under the governments of Bob Hawke and Paul Keating what conservatives Margaret Thatcher and Ronald Reagan did in Britain and the US respectively.

Labor abandoned most of the social democratic policies with which it was once associated, like redistributive spending to improve ordinary people’s living standards, government ownership of services and defence of the welfare state.

As former NSW Labor Education Minister Rodney Cavalier has written, “On objective criteria Robert Gordon Menzies was well to the left of any minister in contemporary Labor governments.”

Labor's defeat is a symptom of its long term crisis

In practice Labor governments have always set out to run capitalism and ended up betraying their own supporters. Labor Prime Minister James Scullin oversaw a 20 per cent cut to public spending in the face of the 1930s Depression. Ben Chifley sent in the army to break a coal miners strike in 1949.

But under Hawke and Keating Labor abandoned any effort to tame the free market or fight for reforms in the interests of working class people.

Labor in power forced through wage cuts and restrained spending on public services in order to cut corporate taxes and boost business profits. In their first six years in power they raised the share of national income going to profits by about 10 per cent at the expense of wages. They also began wide-scale privatisations including selling the Commonwealth Bank and Qantas.

Left-wing opposition to neo-liberalism inside Labor effectively disintegrated, leaving an unchallenged support for pro-business policies, privatisation and spending restraint.

The foundations of Labor’s later attacks on refugees were also laid during this period, when the Labor government began the practice of imprisoning asylum seekers in remote desert detention centres in 1992.

As a result less and less people see much difference between the major parties. Just 26 per cent said they saw “a good deal of difference between the parties” in 2010 compared to 40 per cent in 1969.

The scale of the anger at Labor became obvious at the 1996 election, when the party was finally thrown out of office after 13 years in power. The party’s neo-liberal policies had come back to bite it.

Labor Senator Nick Sherry recalled that during the 1996 election the mention of neo-liberal buzzwords like “productivity” and “efficiency” around workers, was, he claimed, “a good way to end your life”.

Academics Michael Carman and Ian Rogers have shown that by 1996 real wages for a factory worker were $100 a week less than in 1983. In addition there had been a two-hour increase in the average working week. Workers had also suffered a sharp recession, with unemployment above 10 per cent for two years, yet Keating declared the recession was a good thing because it would keep wages in check.

As a result, John Howard and the Liberals were able to win over a section of these Labor working class voters for the first time ever at the 1996 election. But the Liberals did not succeed in shifting public opinion to the right or consolidating a new constituency among workers.

Despite the bipartisan agreement about the need for tax cuts and spending restraint, public attitudes surveys confirm that most people continue to support higher government spending on services.

This year’s tax survey by the think tank Per Capita shows that 68 per cent of people think the government should spend more money on public services, the majority of them much more. And an indication of how this could be paid for comes from the fact that 63 per cent support higher taxes on big business.

Labor’s base in decline

The result of this disconnect between popular attitudes and Labor’s commitment to neo-liberal policies has been increasing bitterness with the party.

Labor’s support—both the “rusted on” base of workers who vote Labor every election and the party’s active membership—are in long-term decline.

In the 12 elections between the end of the Second World War and the dismissal of the Whitlam government in 1975 Labor’s average primary vote was almost 47 per cent.

But in the period since its primary vote has averaged just 41.6 per cent—during a period when Labor won more elections. It was this period after Whitlam’s sacking when neo-liberalism became dominant inside Labor, particularly from 1983 on when Labor came back to power under Bob Hawke.

The Australian Election Study, a survey conducted by academics following every election, has recorded a decline in those describing themselves as “life long Labor voters” from 32 per cent in 1969 to 22 per cent in 2010.

One result of Labor’s shift to the right has been the desertion of a section of left-wing Labor voters to The Greens. The growth of The Greens’ electoral support since 2001 has come largely through winning over former Labor voters.

It has also produced growing abstention rates in working class electorates. Both the informal vote and the number of those who refused to vote altogether rose at the 2010 and 2013 federal election.

After 2010 Tim Colebatch wrote in The Age, “the number not voting has risen from 5.2 per cent last time to 6.8 per cent, an 85-year high”, and importantly “it rose most in safe Labor seats. Of the 30 seats with the biggest growth in the numbers not voting, 23 were Labor seats”.

At this election the figure rose again, and was close to 19 per cent as Solidarity went to press, with some postal votes still to be counted. Fully one quarter of voters under 25 (400,000 people) also failed to register.

The story was equally grim for Labor when it came to informal votes, where the ten seats with informal votes above 10 per cent were all in Western Sydney and were all Labor seats until this election.

Labor has also haemorrhaged members. The official party review carried out after its disastrous 2010 election result painted a sad picture. “Nothing came through more clearly”, review author Senator John Faulker said “than the poor state of Labor’s membership”.  The review admitted that the party now struggles to staff polling booths on election day saying, “The 2010 election saw many important polling booths around Australia unstaffed or understaffed for the first time in living memory.”

Kevin Rudd claimed membership was at 44,000 when he took back the leadership in June. This means that membership has shrunk since 1955, despite the Australian population being more than three times larger.

The party today

Labor is increasingly run by a narrow clique of middle class careerists, who graduate from apparatchiks working in a party office to climbing into a parliamentary seat themselves.

Most of the party’s MPs today are completely disconnected from the realities of working class life and Labor’s electoral base. They live in a bubble where neo-liberal policies and ruling class interests are rarely challenged.

The party still retains its historic links with the trade union movement out of which the party was founded in the 1890s as the political party of the trade union bureaucracy. These give it an important remaining connection with the working class, with the unions still controlling 50 per cent of the votes at Labor conferences. The connection has always been at one remove—it is not union rank-and-file members who directly attend Labor conferences and events to exercise the union vote but trade union officials.

The decline in union membership means that Labor’s connection with the working class through the unions is weaker than in the past. Today just 19 per cent of workers are members of trade unions compared to 46 per cent in 1991 prior to the introduction of Enterprise Bargaining.

It is hard to see any rejuvenation of Labor coming from inside the party. Despite a review following its loss in 1996 that recognised the damage implementing neo-liberal policies had done to the party, its leadership drew right-wing conclusions and continued to embrace the bulk of John Howard’s agenda in opposition. It has done the same thing following every election defeat since 1996.

This doesn’t mean it’s impossible for Labor to win elections. When John Howard over-reached and introduced WorkChoices following the 2004 election, the union Rights at Work campaign ensured that the Liberals’ own rabid neo-liberalism sent them packing.

In power, however, Rudd and then Gillard’s popularity sank as they maintained Howard’s neo-liberal policies and delivered nothing but spin.

This underscores the importance of building a principled left-wing alternative to Labor that rejects its focus on winning control of parliament as a route to social change. We need a party that focuses on building the struggles outside parliament that can bring real change—and that is committed to overthrowing the system, not to running it.


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