Why Labor got it so wrong

Labor’s six years in power have either disappointed or outraged its supporters. David Glanz looks at why Labor has been so useless

On the night in 2007 that Kevin Rudd led Labor to victory over John Howard, I was part of a jam-packed, heaving crowd of unionists and other activists partying at Trades Hall in Melbourne. It felt like an end of a horrid era.

If Rudd leads Labor to victory over Tony Abbott in September, there will be sighs of relief, but any celebration on the Saturday night will be muted. For we now know what to expect on the Monday—more anti-union sniping, more attacks on asylum seekers, more cutbacks to social spending, more backsliding to placate the big polluters.

Rudd came to office the first time on a wave of hope and expectation that Labor would undo the reactionary policies of the Howard years. Yet on many key social indicators, society has stalled or gone backwards.

The rate of homelessness, which Rudd declared a priority issue in 2008, rose by 8 per cent in the five years to 2011. Between 2007 and 2011, the number of public rental homes went down 8400, while the number of people on public housing waiting lists went up 15,500.

Unemployment has climbed from 493,000 people in 2007 to 709,300 last month. Underemployment—where people are working but want more hours—has risen from 6.5 per cent to 7.4 per cent. Between 2007 and 2012, the average time for men without a job increased from 11 to 14 weeks.

The dream of early retirement has receded. The proportion of men aged 55 to 64 in work rose from 67.7 per cent in 2007 to 71.3 per cent in 2012. For women, who have lower levels of super, the situation was worse—an increase from 48.2 to 55.4 per cent.

The poverty rate—the proportion of individuals living below 50 per cent of median income—fell between 2007 and 2010, but only because wages were squeezed. In other words, the level of relative poverty declined because real wages declined even faster.

Meanwhile, the climate—Rudd’s “greatest moral challenge of our time”—continued to change for the worse, as Labor facilitated the expansion of the coal industry. Last summer was Australia’s hottest on record.

What happened to the hopes of 2007? What brought Labor into internal civil war and public contempt? How did the progressive dreams of Rudd 1.0 mutate into the right-wing nightmare of Rudd 2.0?

Labor’s DNA

The ALP of 2013 is not identical to the Labor Party established by the Sydney Trades and Labour Council in 1891. But two core elements of the party’s DNA have survived the years intact.
The first is the centrality to the ALP project of winning parliamentary majorities and the votes needed to achieve them.

The problem Labor (and, indeed, The Greens) face is that they are not in control of the public agenda. Newspapers still set the tone for the daily news cycle. TV and radio pick up on their themes and echo them.

While all the mainstream media accepts the “common sense” that the needs of business are paramount, the situation is made worse in Australia by Rupert Murdoch’s News Corp controlling two-thirds of newspaper circulation.

Murdoch has made it clear that Labor must be destroyed. As he tweeted on 26 June: “Australian public now totally disgusted with Labor Party wrecking country with it’s (sic) sordid intrigues. Now for a quick election.” He has brought his favourite attack dog, Col Allan, in from New York to ensure that his daily papers step up the viciousness of their attack on Labor.

Labor’s logic is that it needs the media onside to influence voters, so it panders to the media’s backwardness, rather than confronting it. But it is a lose-lose situation.

Labor capitulated in March to Murdoch’s offensive over media reforms—and its reward today is to be vilified on the front pages of the Daily Telegraph, the Herald Sun and The Courier-Mail.

Worse, pleasing the media means accepting its pro-business agenda. This stance undermines Labor’s support among workers. Rudd’s collapse over climate change in 2010 cost him one million votes. Gillard’s surrender to the miners over the mining tax blew a hole in Labor’s budget that has led to a series of unpopular social welfare cuts.

As Rudd’s recent attacks on asylum seekers show only too well, grovelling to Murdoch’s headlines means the initiative passes to the Liberals, who are willing to outbid Labor to the right every time.
Labor tries to win votes from an electorate that it understands through two-dimensional snapshots—opinion polls and focus groups. But this misses the dynamism of mass opinion and, crucially, how it can change through struggle.

It was the movement against the Vietnam War, the rise of the women’s liberation movement, of gay and lesbian struggle and of the student movement, self-organisation among Aboriginal people and above all the mass militancy of the union movement that created the mood for change that culminated in Gough Whitlam’s famous 1972 election win.

Labor’s slogan, “It’s Time”, did not lead the electorate—it merely told workers and the movements what they already knew from their own efforts.

Serving capitalism

The Whitlam government also illustrated the other key feature of Laborism—the acceptance that any change has to be within the bounds set by capitalism.

When recession hit in 1974 and the bosses started putting pressure on directly and through the conservative majority in the Senate, Labor increasingly bowed to their demands, cutting public sector jobs and slashing nearly $100 million from childcare.

While workers’ response was to come out fighting, their parliamentary leaders conceded ground. So right-wing was Labor’s last budget that Liberal leader Malcolm Fraser left it virtually unchanged when he took power.

This was far from the first time that Labor would put the needs of Australian capitalism before the needs of its working class base.

As Wall Street crashed in 1929, heralding the start of the Great Depression, the newly elected Labor government of James Scullin made massive cuts to public spending to balance the budget, throwing 100,000 out of work.

Wages were cut by 10 per cent and public spending by a further 20 per cent, sending official unemployment towards 30 per cent.

Scullin had won the 1929 election with 48.8 per cent of the primary vote. Labor was driven out of office two years later with just 37.6 per cent, its lowest vote since 1906 (and the same result Mark Latham recorded in the 2004 election).

In 1949, the Labor government of Ben Chifley introduced emergency legislation to prevent the coal miners’ union using its funds to support its members on strike. In all, eight union officials were jailed during the dispute.

Worse, Chifley sent in troops to cut coal—a tactic copied by Bob Hawke in 1989 when he used the RAAF to help break an airline pilots’ strike.

What these episodes illustrate is that Labor is prepared to put the “national interest”—in other words, the capitalist economy—before the interests of the workers who make up the largest part of its electoral base.

Labor is an electoral formation, but it is prepared to sacrifice its prospects at the ballot box for a higher calling… defending Australian capitalism.

So today’s Labor is going into the election campaign weighed down by its commitment to eventually running a budget surplus, even though Treasurer Chris Bowen has admitted: “It’s a statement of fact that if we had the same tax to GDP ratio as the Howard government had, we’d be in surplus today.”

Neither Julia Gillard nor Rudd have been prepared to tax the wealthy and the corporations, preferring to slash benefits to single parents and spending on higher education.

While Labor’s conservatism has been present throughout its history, there have been countervailing tendencies—the impact of socialist ideas on the party and the influence of the union movement through delegations of union officials on the floor of party conferences.

Chifley used soldiers to scab on miners. But he also tried to nationalise the banks, in a bid to use state control to rein in capitalism. Whitlam attempted to limit workers’ wages, but his deputy, Cairns, played a leading role in the movement against the Vietnam War.

But with the end of the Cold War and the triumph of neo-liberalism over Keynesianism, there are no currents within Labor voicing any systematic alternative to free market policies.

Rudd staked a claim to a social democratic position in 2009 in the wake of the Global Financial Crisis—the same man who today presides over cuts in the name of balancing the budget.

The interests of working class people continue to be represented within Labor—at a distinct remove—by union officials. Their significant influence at party conferences echoes their members’ struggles outside parliament.

That’s why Rudd’s “modernisation” project for Labor involves substantially weakening the union officials’ say within the party.

We should continue to give Labor our second preferences this election (after the Greens), in solidarity with those workers who still see the ALP as their dented shield.

But the Rudd-Gillard-Rudd debacle illustrates why we need a different kind of party, one that builds and leads the struggles outside parliament that defy the priorities of capitalism.