Labor's predicament: an opinion

In other words, more of future budgets need to be utilised to help create wealth or other measures introduced to attract investment, along with further taxation and labour market reform. After all, around 44 per cent of employment (as of August 2011) relies on wealth creation given that health care and social assistance employ 12 per cent of Australians, retail trade 11 per cent and construction 9 per cent.

Weighing up the cost and benefits of certain industry or infrastructure needs is important. The need for better roads, railways, and public transport is always obvious. Similarly, measures to even maintain our current agricultural prowess will cost money. Policies to boost our manufacturing sector may be more contentious, but if Australia wants a significant one it will require substantial resources.

At the social level, addressing housing needs may require government spending or concessions to provide affordable housing, consistent with strategies of past decades. Just recently I was offered a 700 square metre block in Canberra for $280,000 a few days after I purchased a similar sized block for $100,000 in Wodonga.

Labor will likely have to reduce the proportion of the budget spent on social welfare to accommodate industry, infrastructure or even important social needs, unless of course the world changes and higher taxation levels are again become the norm. At present, the $376 billion of expenses set aside for the 2012-13 budget includes $131 billion for social security and welfare, $61 billion for health, and $29 billion for education.

Labor's future role must ensure that social welfare is fair and means-tested as much as possible in line with its historical belief that assistance should decline the more one earns.

At the same time, Labor must come up with new ideas of how best to adapt to a changing economic environment. For myself, I have long been interested in an income security scheme where a percentage of one's pay is paid to an independent body to be paid out when employment ceases. This would help address the loss of payouts to workers when companies fold. The cost of such a scheme could be offset by removing long service leave, a luxury that benefits fewer and fewer workers.

Just how a future Labor can get the balance right requires extensive research. It may require tougher laws on foreign products when it is proven that they were dumped here. It may require joint ventures with private national or foreign firms. It may even require a larger reliance on our own financial resources as more foreign capital gravitates to the Asian region.

It certainly requires Labor to stand for something. Given that Labor was always going to win the 2007 federal election, why did it seek to win support by promising not to alter the private insurance rebate or education funding.

In the end, Labor should stop trying to be all things to all people. It support base has always been everyday Australians which expect Labor to make a difference as we adapt to an ever-changing world. In other words, Labor, like its major centre-right political counterpart, must seize its time in the sun to make a difference as part of the ongoing struggle of ideas in a sophisticated liberal democracy.

For the time being we must put our faith in the Coalition and hope that it will provide both a clearer message and policies necessary to ensure that Australia can adapt successfully in this competitive world.

Labor had its chance but failed. We can only hope Labor does more homework and is better prepared next time.