Australian Labor bitten by a failed dogma

Australian Labor bitten by a failed dogma, by Troy Bramston.

Labor’s vote sunk even lower, to a dismal 33 per cent, at the last election. [Former PM Paul] Keating thought Labor had veered too far from the political centre and its policies were playing to its dwindling base rather than making a compelling pitch for the winners of the economy the Hawke-Keating government created.

Shorten promised higher taxation and spending with a program designed to redistribute wealth and sold with rhetoric anathema to Hawke and Keating: class warfare and the politics of envy. Changes to franking credits, negative gearing and capital gains may have been saleable if the revenue reduced income tax rates rather than funded social welfare.

The point is Labor now only appeals to one-third of the electorate. It lost huge swaths of middle-class and working-class voters across the country.

“Labor,” Keating argued, “has lost the ability to speak aspirationally to people and to fashion policies to meet those aspirations.” His concerns about Labor’s policies were privately echoed by Hawke. On the day of the last election, before the result was known, I wrote about Hawke’s criticism of the modern Labor Party, expressed to me over several years.

Hawke worried about Labor reverting to an older model of tax-and-spend politics and not understanding the importance of middle-class aspiration or how markets could produce better economic and social outcomes than regulation and intervention. Many of the people the Hawke-Keating government lifted from the working class into the middle class no longer support the party because it no longer reflects their values.

Labor’s problems are greater than many realised. The party remains in the grip of an identity crisis, with a diminishing base of voter support and shackled to an organisational model devised in the 19th century. The ever-shrinking, discredited union movement is an albatross around Labor’s neck. The party and the unions have little understanding of the modern economy, the changing nature of labour and capital, or the values of mainstream voters, who are not tribal and prize opportunity, aspiration and reward for effort.

Just ask Mark Latham, another former Labor leader.