18 Jul 2007

What Labor Can Learn From Itself

By Evan Jones
If Labor is to be ready to govern at the next Federal election, it needs to critically engage with its own recent experiences in office. Evan Jones gets the ball rolling

Labor was in Federal office for 13 years between 1983 and 1996. Everybody knows this except, it seems, the Labor Party.

Over its last 11 years in Opposition, Labor's policies have been fragmented and unstable. Occasionally it seems to want to up the ante on the Liberals in its commitment to budgetary stringency, but there is strikingly little continuity with its previous period in office. It is as if the Party is starting from scratch.

Partly, this can be attributed to a marked turnover in Party personnel. Of the 88 current members of the Parliamentary Labor caucus, only 25 were in Parliament before 1996, and only 13 before 1993.

But where are the Party grandees? Kim Beazley, a rare senior link to the past, apparently has no interest in resurrecting it.

We don't know what the Hawke/Keating era means for Labor because Labor doesn't know. Is the ALP's longest period in control of the formal levers of power of no consequence? Are there no lessons to be learned of its successes and failures? And by what standards should its successes and failures be determined?

These are questions Labor under Rudd would do well to answer.

One standard Labor might be judged by is that of the economic orthodoxy entrenched in the media, the bureaucracy, and the corporate-funded think tanks.

By this standard, Hawke/Keating Labor does very well indeed. Keating himself told us as much in a recent article in The Australian.

Under Hawke and Keating, Labor floated the dollar and lifted capital controls, admitted select foreign banks to the Australian market, liberalised bank deposit rules, and abolished a range of constraining monetary policy instruments. It wound down the tariff structure over manufactured imports, and in doing so, a panoply of support measures favouring agriculture.

It undertook a range of dramatic policy initiatives, often driven by their financial implications. Multiple changes to the tax system followed the 1985 Taxation Summit. Superannuation first appeared as a pragmatic vehicle for wages restraint in 1985, but culminated in the 1992 Superannuation Guarantee Act as a means of lessening dependence on the publicly-funded pension. The social welfare system was rationalised through the 1980s; the Higher Education Contribution Scheme was introduced in 1989.

On the industrial front, Labor pursued a range of positive initiatives albeit haltingly because they ran contrary to economic orthodoxy. A range of strategic industry-specific plans were developed automobiles and textiles being of particular significance. The foundations of a venture capital sector were underwritten, as well as a range of measures assisting small business.

Then there were the changes in public administration associated with endorsement of 'New Public Management' for example, the transformation of the Senior Executive Service, increased contracting out, and the creation of new mega-departments.

Some programs accommodated new orthodox pressures while retaining a Laborist component. The 1980s welfare agenda was re-oriented from a universalist thrust to a targeted one, but that targeting had egalitarian underpinnings.

The Accord with the unions, via ACTU mediation, was to be a central plank for both wages maintenance and inflation control. It quickly became a vehicle for wages constraint and ultimately for a transformation of the regulatory structure dictating wages and conditions. But formally, unions retained an integral role, and inherited conditions remained sacrosanct in the more open bargaining environment.

Did Labor get the balance right? By opening the door to orthodox catch-cries such as deregulation, user pays and 'moral obligation,' the Hawke/Keating Government created a political climate that allowed the Coalition to dismantle the Laborist components of the economic policy it inherited, and pursue its own agenda with impunity.

There were some issues that Labor took stabs at but its efforts limped along and became marginalised for example, vocational education and child care. It pumped money into the Better Cities program, but abandoned regional development programs to hollow rhetoric and budget-cutting imperatives.

Other agendas were adopted passively from persistent but questionable propaganda, in particular the corporatisation of statutory authorities and the privatisation of Government business enterprises.

There were also significant initiatives that Labor developed assertively but whose adverse outcomes have been ignored or miscalculated.

Most fundamental among these is the revolutionary National Competition Policy (NCP). Introduced in 1995, this policy made 'competition' (whatever that means and its proponents won't say) the dominant motif of not merely all economic exchange but of all public and community activities. Scandalously, evaluation of the NCP has been quarantined to the ideologically-driven Productivity Commission.

A lot of big changes went through Parliament in the 13 years Labor last spent in Government. Why doesn't the Labor Caucus invite in previous Ministers for discrete but honest briefings evaluating their portfolios the ambitions, the openings, the constraints, and the perceived achievements?

Dialogue would involve listening to Keating, but it would also mean listening to others who are now silent. The broad economic reforms over which Keating presided deserve detached reflection.

Even Keating has expressed frustration at the character of advice from his bureaucratic minders and the failure of the economy to respond appropriately to implementation of expert opinion. This frustration is disclosed indirectly in John Edwards's 1996 biography, Keating: The Inside Story, in which Keating is quoted decrying monetary policy and the twin deficits theory as 'bullshit.'

It is possible that the progenitors of economic reform, to whom Keating ultimately stayed loyal, not only gave us 'the recession we had to have' but played a role in Labor's loss of office in 1996.

Rudd and his team have taken a brave front against the grain on at least two occasions on industry policy early  this year, and belatedly on industrial relations. On both occasions they have faced backlash from the guardians of the faith and from non-Labor vested interests.

The certain lack of resolve of Rudd's team to date does not bode well. The last word, appropriately, lies with the Herculean Keating: 'Leadership only ever had two ingredients: imagination and courage.'

The Rudd team needs imagination and it certainly needs courage. But it also needs a critical confrontation with the recent experience of its own Party in office.

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