Progressive intellectuals have poisoned the well for Labor

InThe general consensus is that NSW Labor enjoyed one too many election wins in 2007, with regretful voters longingly wishing to put the governing party out of its misery ever since.

With every political poll and betting market pointing to an electoral apocalypse for Labor at the state election later this week, all signs point to a realisation for voters that, eventually, some dreams do come true.

It is clear that much of the blame for the expected defeat of the Kristina Keneally‑led government, in which even Labor seats with healthy margins are now perceived as 'marginal,' can be sheeted home to a host of state‑own factors.

Since the retirement of the long‑serving Bob Carr in August 2005, NSW has endured the unedifying spectacle of Labor's internal factional warfare directly contributing to a revolving door premiership.

Morris Iemma took over from Carr and, to his credit, won the 2007 election that a tired Labor administration arguably should have lost on an 'it's time' factor alone. Yet any political capital that Iemma built for himself proved to be transitory, with a resounding rejection by the ALP state conference in May 2008 of another electricity privatisation plan signalling the beginning of Iemma's eventual leadership demise.

The political capital of Morris Iemma fully depreciated when the powerful Right faction later refused the Premier's not unreasonable wish to clean out much of the dead wood, including Right factional heavyweights, from Cabinet. With his position made untenable Iemma felt no choice but to resign, the first NSW Labor Premier to do so in 117 years.

With the initial backing of the Labor Right, the left‑leaning Nathan Rees replaced Iemma to become NSW's forty‑first Premier. However this largely forgetful stint only lasted about fifteen months, with Rees earning the undistinguished title as the only Labor Premier not to lead his or her party into a NSW state election.

The Right jumped off the Rees train as swiftly as they boarded, according Keneally the opportunity to successfully challenge for the Labor leadership, and hence the position of state Premier, in December 2009.

Compounding the revolving door of the premier state's political leadership was the seemingly endless litany of scandals afflicting the NSW Labor Caucus. These ranged from the serious, including state political manipulation of local planning and development processes, to the downright salacious with numerous sex scandals revealed over the past few years.

All of these issues reinforced doubts amongst the increasingly restive state voters about the capacity of Labor to manage themselves, let alone govern Australia's most populous state.

The crisis of NSW Labor has also been the product of a sustained period of its own poor policy performance across a range of areas.

Economic growth in the premier state has consistently lagged that of the national economy as a whole since the heady days of the 2000 Sydney Olympics, which in turn has prevented the overall Australian economy from reaching its full potential.

The NSW economy grew by a sluggish 2.2 per cent on an average annual basis since the Olympics, the lowest growth rate of all the states and well behind the national growth rate averaging 3.1 per cent. So serious has the state's economic underperformance been that its share of national GDP actually fell by two percentage points from 2001‑02 to 2009‑10.

One of the contributing factors toward state Labor's underwhelming economic record has been its unpreparedness to dramatically improve the tax competitiveness of the NSW economy. State business tax benchmarking analysis undertaken by the Institute of Public Affairs has shown that NSW is consistently ranked as one of the highest taxing jurisdictions in Australia.

Even taking into account NSW's status as a high taxing state, the state budget papers show that in six of the past eight fiscal years growth in government operational spending had outstripped growth in revenues (including commonwealth grants). In addition, the government has failed to meet a number of financial sustainability targets, including in terms of net debt, that it had set for itself in legislation.

There is evidence to suggest that there also exists a significant degree of dissatisfaction amongst NSW voters in terms of the management and delivery of services by the Labor government.

These include an inability to deliver on commitments for significant new rail services in Sydney's west, concerns about the availability of policing services to prevent crime particularly in urban and regional areas, and chronic hospital waiting lists directly related to a sufficient lack of new beds in the system.

It is notable that NSW has suffered the greatest average loss of people to other states over the past decade, with economic concerns and service delivery problems surely playing some role in this regard. Instead of waiting to register their disapproval of the Carr‑Iemma‑Rees‑Keneally government through the ballot box this week an average of 24,000 people each year for the past ten have already voted in disapproval with their feet out of NSW.

Clearly the NSW Labor brand became political poison even prior to the Icarus‑like figure of former Labor Prime Minister Kevin Rudd crashing back to earth in mid‑2010. However, given the presence of the major parties at both federal and state levels and the extent to which the commonwealth now interferes with state responsibilities, election outcomes at the state level do not entirely hinge upon regional or local issues alone.

While Keneally and her band of ministers and backbenchers were, according to the polls, already at a point beyond political redemption, it appears that the announcement of the carbon tax proposal by federal Labor has only reinforced negative, and growing, perceptions of Labor everywhere as the party of financial pain for ordinary folk.

Indeed, NSW Opposition Leader Barry O'Farrell has capitalised politically on the close association between Prime Minister Julia Gillard and the federal Greens in his continuing efforts to reach out to Labor's traditional working class constituency as well as the growing cohort of 'aspirationals' residing in the outer suburbs of Sydney.

If the electoral coin is to fall in favour of the Coalition's Barry O'Farrell in NSW following Ted Baillieu and Colin Barnett in Victoria and WA respectively, and with Tony Abbott coming within a whisker of consigning Rudd‑Gillard federal Labor to the dustbin of history, the next big question that will be asked in Australian politics is: where to next for the Labor Party?

To help answer that question, it is necessary to consider the tectonic shifts that have transpired within the ALP across the board over the past three decades or more.

As discussed by Edward Shann in his 1930 classic The Economic History of Australia, the Labor Party originally emerged as a political contrivance so that the voice of labour, as opposed to capital, interests could be heard in the halls of assembly. Similarly, Frederic Eggleston stated in the early 1950s that Labor was little more than a trade union class party in which union apparatchiks fashioned its policy and determined its machinery and personnel.

When Shann and Eggleston made their observations the union movement was substantially drawn from men working in the manufacturing sector, which in turn was largely shielded from the value‑added logic of global market competition due to significant tariff and other trade barriers.

However, a range of cross‑cutting economic and social changes were to play a significant role in altering the character of Labor's membership and operations, with spillover effects for its policy outlook over time.

Some of these factors included structural change in manufacturing, a strengthening services sector and growing government, rising female labour force participation, increasing access to university education, and the emergence of secular, post‑modernist outlooks on issues concerning environmentalism, gender equity, citizenship and sexuality.

While the manufacturing union movement still plays its pivotal role in funding, party organisation and political preselection to this day, this traditional working class base within Labor has made way, to a greater or lesser extent, for an emergent, 'progressive' intellectual class.

Some of the previous old guard viewed the rise of the intellectual classes in the Labor Party with suspicion or derision. Clyde Cameron would sometimes compare his early years as a shearer favourably against those of services sector backgrounds, while Kim Beazley Senior once facetiously remarked, 'When I joined the Labor Party, it contained the cream of the working class; now it contains the dregs of the middle class.'

But even the cynical old guard could do little but accommodate the new chattering kids on the ALP block. After all, membership of major political parties has been on the decline over many years, so best to bring the bookwormish intellectual breed under the Labor wing.

In general terms the policy stance of the new Labor intellectual cohort includes the reinforcement of state control over economic activity, albeit dressed in the garb of market jargon (for example, a 'carbon price'), and a social agenda of cultural and social reprogramming of public attitudes through legislation, NGO funding or standardised school curricula.

This policy agenda of ALP's intellectual classes, which arguably has more in common with Bob Brown than Joe De Bruyn, is likely to come at the continuing cost of Labor losing political support from the mainstream working and aspirational classes of Australian society. This is because workers and aspirationals alike prefer economic growth to stagnation, loathe policies that hurt the hip pocket, and resent political correctness and its enforcement through government law or funding.

To put simply, phenomena such as 'Howard's Battlers' or 'Abbott's Army,' could represent a more permanent addition to the Coalition voting pool at both federal and state levels at the increasing expense of Labor the longer the noveau intellectuals hold sway within the ALP.

To a degree more significant than most realise, the long term fortunes of the Labor Party will also be conditioned by choices made by current and future Liberal National Coalition governments.

The progressive intellectual arm of the modern Labor movement largely accumulates its power and influence today largely as a consequence of its previous Gramsci‑like 'march through the institutions' of government administrations, hospitals, schools and universities, not to mention the union representative bodies for these respective institutions.

These personnel are largely paid by the taxpayer but are in a state of ideological animosity toward a serving Coalition government of the day. This poses certain risks for non‑Labor governments, and opportunities for future Labor governments, if left unaddressed.

If an incumbent Coalition government fails to take meaningful action to reduce the expenditure commitments and workforce of the public sector it compromises its ability to protect itself from potential leaks and other forms of subterfuge by hostile public sector workers of progressive ilk. Further, a non‑reforming Coalition would effectively leave the furniture of modern Labor's power intact for the benefit of the next generation of governing Labor politicians.

The signs so far suggest that the new batch of state Coalition governments seem too unwilling to reduce the size of government and, in so doing, defund the political left.

The NSW Labor problem of today, which incidentally appears to have caught on to federal Labor like a cold, is also a combination of inflating community expectations combined with an inability to deliver upon those expectations in policy terms, and the mastery of 'spin' political rhetoric to conceal or divert voter attention to such failure.

However to portray Labor's problems as being limited to these issues of style, as important as they may be, is to ignore the underlying forces which risk shifting the party away from mainstream concerns and values.

How Labor over the next few years manages to bridge the gap between its increasingly assertive intellectual base and the economically powerful working and aspirational classes will be most interesting to watch. If we know anything of the Labor experience, expect some fireworks ahead as it wages war with itself.