Australians are all conservatives now

Whatever the Australian Labor Party decided at its national conference will be irrelevant for the direction of a future federal Labor government.

Why? Because during the past two decades conservatives have won all the key policy battles. Conservative values drive the policy agenda to such an extent that whoever is in power is essentially unimportant.

Now, and in the foreseeable future, there will be little divergence from the conservative agenda. We live in a conservative world and the Labor Party takes its policy cues from the conservative framework. Left-of-centre views may still have currency at universities, but in the real world of voter preferences and policies that work there is no market for outdated left-of-centre policy products. Everywhere, leftist policies are in retreat.

State Labor governments, once known for their interventionist economic strategies, have adopted a more market-oriented policy agenda. In Victoria, the Bracks Government has left largely untouched the reforms from the Kennett revolution in privatisation, cutting local government and using market mechanisms to achieve policy outcomes. In Queensland, the Beattie Government only this week announced the sell-off of the state's lottery and a review of the state's 157 local governments for wide-ranging amalgamation. In Western Australia, the Carpenter Government spurns the excesses of WA Inc.

Nor is this trend just an Australian phenomenon. Tony Blair's New Labour Government in Britain has largely continued Margaret Thatcher's policies. The Iron Lady just did the dirty work in tackling the country's out-of-control trade unions and privatising those decrepit overstaffed government-owned businesses.

Similarly, in the US the Reagan Republican conservative agenda was pursued just as vigorously by a Democratic president. Who can forget Bill Clinton's presidential campaign in 1992 when "he pledged to end welfare as we know it"? His subsequent commitment to welfare reform, balanced budgets and free trade was confirmation that he was more in keeping with Barry Goldwater than George McGovern.

And if the British and US cases do not prove the point, bear in mind that even many European countries such as Sweden, Denmark and Germany have adopted the conservative free-market policy agenda of reduced government spending, tax reform and privatisation with some success. Only France remains a reluctant starter and its high unemployment rate testifies to the resultant policy failure of its approach, but a president Nicolas Sarkozy may begin to reverse the tide.

So, far from there being a third way as Blair and Rudd pretend, there is merely the conservative way or a return to non-viable policies of the statist Left.

Nor, as Rudd suggests, is there a fork in the road and a choice for voters at the next federal election to take a different policy track to the present conservative reform agenda. Such policies, after all, are delivering so much prosperity.

Australia is on a one-way street of more deregulation, market-based reforms, greater global integration and less welfarism. The only issue is the pace of change, not the destination.

Once upon a time, conservative arguments for smaller government and fewer taxes to promote economic growth were derided. Yet today state Labor governments scramble to demonstrate their fiscal restraint and Labor treasurers worship at the altar of balanced budgets and international credit agency ratings. Rudd preaches fiscal austerity and even calls on the Howard Government to be financially prudent this election year.

Conservatives also deplored the costly, distortive and universal welfare programs of the Whitlam era and believed the poverty cycle would be broken only by jobs created through a growing economy, not by job subsidies or work creation schemes. Such views were once seen as inequitable and uncaring. Yet targeted welfare programs and job creation by economic growth became the boasts of the Hawke-Keating Labor governments. Present-day Labor has embraced this conservative stance.

During the 1970s conservatives stressed the importance of free markets, the need for deregulation, cuts to industry assistance and extensive privatisation of government business enterprises to reinvigorate stagnant economies. Such proposals were painted as being too ideologically driven, too inequitable and too politically divisive. Privatisation was seen as tantamount to selling the family silver and Australia's heritage.

But it was Labor administrations driven by economic and political crises during the '80s that turned to conservative solutions and deregulated the financial sector, sold off banks and significant government-owned businesses such as Qantas. Deregulation and privatisation are permanently embedded in the policy landscape. There is no turning back.

Conservative suggestions for using market mechanisms such as carbon trading, user pay and tax credits to achieve more effective environment, water, transport and education outcomes become increasingly adopted by all governments and parties.

On industrial relations, conservatives long argued for secret ballots before strikes, ending closed-shop workplaces and dismantling the IR club to reduce trade union powers and improve Australia's international competitiveness. Such reforms were rejected as being barbaric, a return to the law of the jungle and an assault on the working class and trade unions.

Yet labour deregulation started by the Keating government and accelerated by John Howard has become unstoppable. It has delivered fewer strikes, real wage growth and record low unemployment. When Rudd announced the watering down of Labor's previous restrictive industrial relations policies this week, it was an acceptance of the inevitability of the workplace reform agenda.

So the conservative policy agenda wins regardless of who is in office. To paraphrase Richard Nixon, we are all conservatives now, even Rudd. So let Labor pretend to debate policy and to criticise the Howard Government. It really doesn't matter, for in office Labor governments eat their slogans of reaction and implement the conservative reform agenda with enthusiasm.

Notwithstanding its wailing about Howard's "market fundamentalism", Labor has no real alternatives. And no wonder. Its ideological foundations have long been eroded and made irrelevant by the continued success of conservatism, changed times and voter expectations.