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Daily Media Quotation

How Keating Hurt Labor

July 28, 2006

by Paul Rodan - The Age

With a revamped higher education policy and an imminent internal debate about amending its uranium policy, the ALP is obviously trying to boost its credentials for next year's federal election. But if Labor is to return to office, it will have to confront obstacles beyond the electoral impact of its policies and leadership.

The modest lead that Labor has in recent polls needs to be taken in context. First, federal elections involve 150 lower house contests, and a win in at least 76 is needed to secure government. Polls at national and state level may provide a guide to national mood and feeling, but they do not indicate whether a majority can be assembled.

Second, based on the 2004 result, Labor will probably need more than 50 per cent of the two-party-preferred national vote to gain government, although its task may be less daunting if redistribution proposals are effected. This is not an unknown state of affairs, although the fact that it passes without comment in a democracy notionally committed to majority rule has always struck this writer as curious. Five times since World War II, the party with a minority of the two-party-preferred vote has won the election (Coalition four, Labor one).

While its two-party-preferred vote remains respectable in polls, Labor's level of primary support is notoriously awful, with a recurring inability (some recent polls notwithstanding) to attract more than 40 per cent. The primary vote in 2004 (37.6 per cent) was worse than in the ALP's disaster years of 1966 and 1975-77. Granted, we operate under a preferential system and it is possible to secure government with a modest primary base supplemented by a massive preference flow (as in 1990 when the Hawke government secured only 39.4 per cent of first preferences), but starting with a respectable primary vote is obviously better.

Labor's lost core probably owes as much to the Hawke and Keating governments' industry policies as to cunning wedge politics on the part of John Howard. The decline in Australian manufacturing can only have had a negative impact on Labor's traditional unionised blue-collar base. And the jobs created in the new economy have been in areas not conducive to unionism.

What was lost was not just a section of the loyal blue-collar ALP voter base, but also some of that unionised workplace environment in which a Labor message could be proselytised. One can also factor in the weakened loyalty of remaining blue-collar voters, who are now dealing with the reality that "their" party did not look after their jobs.

The possible effect of this lost support has been quantified, in an indirect way, by ANU academic Andrew Leigh. His research suggests that if unionisation had remained at pre-Hawke government levels (about 50 per cent), and if unionists had continued to vote ALP in the same historical pattern (about two-thirds), Labor would have won the 1998, 2001 and 2004 elections. From this viewpoint, Labor's losses are in part due, not to John Howard's genius, but to his Labor predecessors' policies. It seems highly likely that this loss of voting base is a factor in Labor's now regular inability to poll above 40 per cent in primaries.

Whether these policies were good or bad, or even inevitable, is irrelevant to the point being made here: that they came at a cost to Labor's electoral base. In Yes, Minister terms, that may make them courageous, but it is unlikely that Howard would ever engage in such electoral self-harm.

Labor also confronts long-term problems with the dominant role of interest rates in elections. Thanks to the financial deregulation policies of treasurer Paul Keating, greater numbers of Australians were able to secure relatively easy access to substantial loans and to credit generally. Not surprisingly, for these people, fears about interest rates trump other issues come election time, and Labor has baggage in this regard.

Put another way, the governing parties have a vested interest in as many voters being in as much debt as possible. This is hardly a desirable public policy outcome, but it must be remembered that the McMansions are a Keating/Howard production - made possible by the financial deregulation of the former plus low interest rates under the latter.

While further rises in interest rates may reduce the Coalition's advantage on this issue, there is no recovering the core ALP votes lost with the decline in manufacturing industries. No leader can repair this: those votes are gone.

Even if the ALP succeeds in attracting erstwhile Coalition voters at future elections, they will remain "transients", available to the highest bidder from poll to poll. If Keating thought that the new-economy voters, temporarily attracted to Labor pre-1996, could ever constitute an enduring component of a base vote, he was mistaken.

Of course, Kim Beazley was a senior member of the cabinets that made the relevant decisions. As he strives to keep his party's primary vote above 40 per cent, one wonders whether those decision-makers ever foresaw the long-term electoral damage they were doing to themselves.

Very courageous indeed, minister.


Paul Rodan is a senior honorary research fellow in the school of political and social inquiry at Monash University.

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