The Big Risk In Labor's Small Target Strategy


Remember Bill Shorten’s “year of ideas”?

Labor’s Opposition Leader pledged in November that 2015 would be a year of policy development for the federal ALP. “We’re ambitious for this country and we want to have an election based on the best ideas,” Shorten said.

Six months later, where are the ideas?

Despite plenty of opportunity, Labor has advanced relatively few policies so far in opposition. Content to keep the focus on an unpopular government, the ALP under Shorten has played its own version of John Howard’s 1995-96 “small target” tactics.

On any analysis, the time is ripe to seize the policy initiative. The ALP has an election-winning lead in opinion polls, an opposition leader who is holding his own in preferred prime minster stakes, and has just regained government in Victoria and Queensland.

True, there have been some bite-sized policies advanced. Rising star Andrew Leigh has been busy working on ways to stop multinational companies avoiding their tax. There have been announcements on family violence, on building submarines in Adelaide, and on the republic.

The party has also put out a housing affordability discussion paper. It’s not quite the air-brushed and slogan-heavy fair we’re used to from major parties when it comes to policy discussions. But at just 16 pages and with no recommendations, it’s not exactly a Whitlamesque reform agenda either.

In education, Kim Carr has sketched the rudiments of a universities policy, which will reportedly focus on course completion and reducing drop-out rates. Again, there are no details.

We’re assured that plenty of work is going on behind the scenes, in the run-up to this year’s ALP national conference. Veteran frontbencher Jenny Macklin is reportedly convening a wide-ranging examination of social policy, with input from luminaries such as former Treasury boss Ken Henry. So far, no policy proposals are forthcoming.

And that’s about it. 19 months into the Abbott government’s first term, Labor is still mostly playing defence.

Head over to the Labor website, and you can find Labor’s current policies and platforms under the heading of “What we’re for.” Sections like “workers” and  “fairness” are largely devoted to attacks on the Abbott government, and defending the record of the Rudd-Gillard years.

In purely tactical terms, there’s nothing wrong with this: oppositions regularly win power with few published policies. In January, Labor won office in Queensland on the basis of little more than a protest against privatisation. In November, Labor won in Victoria with a series of small promises, micro-targeted at individual electorates and interest groups.

You can understand the reluctance of Labor to get too involved with policy discussions at this stage of the electoral cycle. With a government this unpopular, why should Labor do anything at all?

But even if it’s possible to win government with a small target strategy, policy still matters. An election platform that contains few details almost certainly means an incoming government will surprise voters, as it implements policies it hasn’t told people about.

In opposition, the Coalition released little information about health, education and social policy. Most voters expected it would maintain Labor’s policy settings. Much of the backlash against the Abbott government was sparked when Joe Hockey first revealed the government’s radical plans to unpick Australia’s social safety net.

The risk for Labor in not developing a sound policy agenda for 2016 is two-fold.

Firstly, it cedes the initiative to the government, which might eventually use that breathing space to restore its fortunes. This is exactly what Tony Abbott is attempting by “scraping off the barnacles” of unpopular policies.

More importantly, ignoring policy means Labor is squibbing the hard task of explaining to voters exactly what it stands for.

Labor has a good story to tell. The Rudd-Gillard years laid the foundations for a broader welfare state, with a new disability insurance scheme, an NBN, the introduction of paid parental leave, the Gonski school funding reforms, and a credible response to climate change.

Many of these achievements are now in ruins, early targets of the Abbott government’s war on middle Australia.

While Labor under Shorten has been effective at stoking disaffection with Abbott and Hockey, the Opposition has largely failed to explain what was important and enduring about its achievements from 2007 to 2013. 

It’s never easy, but there is a narrative available: equity. The golden thread that runs through the Rudd-Gillard years is the idea of fairness. In six years in office, Labor made halting but important steps to address inequality and foster social justice.

That’s not to say its record is unblemished. For all the positive achievements of Gillard’s administration, Labor still presided over an economy and a society where the rich got richer, and the poor barely held their own.  

It was under Julia Gillard, so proud of her role leading a party of early-rising workers, that Labor introduced savage cuts to benefits for more than 80,000 single parents. It was under Wayne Swan, a champion of fairness, that Labor passed income tax cuts worth tens of billions of dollars, most of the value of which accrued to high income earners. And despite Penny Wong leading Labor in the Senate, the party still wasn’t able to bring itself to vote for same sex marriage.   

Nor has Labor moved to address the huge reform challenge it faces in its party apparatus, where factional bosses and captive unions can still wield more power than a disempowered membership base.

As a party of organised labour – and not, as Julia Gillard reminded us, a party of social democracy – the Australian Labor Party has a number of existential challenges to address.

Perhaps its biggest challenge is to square its past as a party of workers with its present as a party of technocrats, barristers and apparatchiks. Few seem to remember that Bill Shorten actually lost the membership vote to be Labor’s federal leader, and only became opposition leader by dent of his support base in the parliamentary party.

Party reform matters, because the party membership is well to the left of its leaders on a range of social and political issues. If Labor adopted policies closer to its membership base, it would move the party to the left in political terms. Would that lose it votes in marginal seats and amongst swinging voters? We may never know, because Labor is too scared to try. 

Whatever the problems of party reform, the elephant in the room remains Labor’s fiscal policy. Voters still equate a budget deficit with poor economic management, and Labor has shown itself comprehensively unable to convince them otherwise.

Consequently, Labor is still seen as the spendthrift party, even while Joe Hockey racks up deficits every bit as bad as those recorded under Wayne Swan.

Labor now has a fine opportunity to redress the problem. It should argue for higher taxes. A series of sound and prudent tax increases could fix Australia’s budget deficit – Labor’s biggest problem in government, and one of the Coalition’s few remaining talking points with any bite.

Modest increases in corporate and income tax, combined with the removal of some of the worst rorts available to landlords and superannuants, would easily bring the budget back to surplus, and provide Labor with a handy kitty for election promises to boot. They might even be popular.

But Labor can’t quite bring itself to argue for the tax rises our nation needs. This is a rather dishonest position. Labor is pretending that the welfare benefits and public services that voters want can be financed by our current tax base. They can’t. If Labor really does value fairness and equality, it has to also value higher taxes.

Of course, this will be difficult. Arguing for a rise in tax rates amounts to the first substantive argument in favour of a bigger state in a generation. Nothing is so cherished by corporations as lower taxes. The push back from business and conservative pressure groups will be intense.

Given this, it would be wise to start sooner rather than later. Tax reform is always politically risky, and will face fierce opposition from a muscular and well-reported business lobby. The time to start is May’s budget reply speech, so Labor is not leaving it until an election year to unveil potentially unpopular policies.

Amidst the current anguish about the rise of the Greens, Labor figures like to talk about how the ALP is the only party of the left that can take and hold government. Such arguments would have much more impact if the federal party acted more like an alternative government, and less like a party of protest.

Ben Eltham is New Matilda's National Affairs Correspondent.