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Structural change in Australian politics

By Peter McMahon - posted Friday, 17 August 2012

The recent blow-up over Green preferences in the Australian Labor Party (ALP) is indicative of some major structural changes in Australian politics. The existing two-party system so beloved of the Australian political establishment is under threat, and although the powerbrokers in the Labor and Liberal parties both hope to see off the threat posed by the Greens, they will soon find out that their problem is insoluble because of factors that go way beyond national politics.

The major parties would argue that the two-party political system ensures stability as they effectively act as two slightly different sides of the same national administration. But although this was a reasonable argument while things were going well, in times of change this basic political structure of two-party rule only acts to prevent open debate and necessary policy reform.

The reason why the stoush occurred between Labor and the Greens was because Labor has been the party of reform and therefore both closest to and most obviously threatened by the Greens. However, the Liberal Party will also face the same problem, a dilemma represented in embryonic form in the Turnbull alternative to Abbott’s reactionary approach.


For over half a century Australia has been ruled by a political system dominated by a de facto agreement between the two major parties to limit the political debate to certain core issues. At the heart of these issues is the concept of maximum economic growth, with implications for essential social welfare matters like employment and interest rates. This agreement emerged in the first three decades of the post-war boom when the previous core debate over social justice or market power as core drivers of national development was submerged under acceptance of economic growth as the main game.

Labor’s original position was based around the concepts of social cohesion over all else based in notions of union power as a counter balance to business power and national development policies, including import protection, as a way of promoting economic development with reasonable social cohesiveness.

The political debate in Australia occurred within a wider framework of global development. The post-war orientation of the West, driven in large part by the triumphant U.S., was increased mass-industrial production to ensure high employment and cheaper goods, and thus popular support, and anti-communism to undermine leftist alternatives. The Liberals explicitly supported this orientation and Labor, after some internal turmoil (remember the DLP), also acceded to this position.

With Menzies as Prime Minister, two decades of strong economic growth and social conservatism underpinned Liberal national government, but as the economic successes and associated social change led to more diverse popular concerns, Labor under Whitlam regained power at the national level in 1972. However, Labor came to power just as the post-war international system was coming apart and his guided national development policies came unstuck due to funding problems.

The next Labor government came to power as neoliberalism arose to transform the global situation, epitomised by the election of Thatcher in the U.K. and Reagan in the U.S. Neoliberalism promoted dramatic rises in global markets, especially finance markets, and in transnational production and trade. In the early to mid-1980s Prime Minister Hawke and Treasurer Keating tried to have it both ways by opening up the national economy to global forces while supporting social cohesion through a union-based economic accord.

In reality they were removing most of the remaining political controls over national development, something previous Prime Minister Fraser and Treasurer Howard had been unable to do. With the possible exception of the role of unions, which were nonetheless in decline, the gap between Labor and the Liberals was narrowing to almost irrelevance. In essence they both accepted neoliberal doctrine and only differed over marginal social issues.


When Howard came to office he dumped the unions and extended the economic measures to open up the economy to the increasingly powerful global forces. The great structural shift in Australian politics from a mixed economy to (increasingly global) market domination was then complete.

Along with the globalisation of the economy came the rise worldwide of some new concerns, in particular the peace and environmental movements. The peace movement, stimulated by the provocative emphasis on military confrontation by the U.S. under Reagan’s administration, surged and then subsided as the Cold War ended. The environmental movement, however, grew from strength to strength as scientists warned of ever more pressing problems, most importantly global warming.

In Australia the shift away from balanced national development, with its focus on infrastructure and maintaining high levels of social welfare in terms of access to good standards of health and education, steadily built up stresses in the political system. Furthermore, the environmental problematic, especially the concern with global warming, was shifting closer to the centre of popular debate. This growing concern was a core shift driving Kevin Rudd’s victory in 2007.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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