A Brand Off Target

by Paul Kelly - The Australian

What has happened to the once great Australian Labor Party? Labor now defines itself by populist denial: it denies the liberty to negotiate individual workplace contracts and flirts with xenophobia about foreign apprentices stealing Australian jobs.

The paradox of Labor is that it has popular policies yet keeps losing elections. It opposes John Howard's unpopular industrial laws, wants to quit the unpopular war in Iraq, pledges more money for health and education, wants a fairer tax system, drum beats to popular acclaim about appeasement of Indonesia, opposes the unpopular sale of Telstra and plays to Hansonite populism on foreign apprentices. Quite a list. It spent years opposing the unpopular GST and the unpopular 1996 first round of industrial reforms.
Analysing politics issue by issue Labor should be far ahead and perhaps it is. This week's Newspoll shows it has a massive 53-47 landslide over Howard, yet few accept this as reliable. Labor's core weakness remains. What counts is political brand and Labor doesn't have the right brand.

It is likely next year that Labor will win the industrial relations battle yet lose the larger 2007 election war. Indeed, it is likely that Labor's success on industrial relations will weaken its credibility as an alternative government and a viable economic manager.

Labor, again, defines itself by rejection of Howard reformism. Shadow Finance Minister Lindsay Tanner, in the latest book debating Labor's future, Coming to the Party, edited by Barry Jones, says: "Right across the labour movement, inside parliament and out, we have spent far too much of our energies reacting to the initiatives of conservative governments. In effect, we have become defenders of the status quo."

Tanner bemoans the "profoundly defensive, reactive mentality that has taken hold in contemporary progressive politics". He warns that "Labor's biggest structural problem is our eroding brand" and that "re-building the brand to reflect the identity of our constituency and the reality of modern Australia is a necessity".

Kim Beazley has made Australian Workplace Agreements the iconic issue of the election and his declaration at Sydney's Town Hall on June 11 launched a crusade that unites the labour movement, political and industrial, against Howard's "prejudices and obsessions (that) are wrecking the lives of millions of Australian families".

Labor's opposition to AWAs will be popular. But what does it do for Labor's brand? It reinforces the nexus between Labor and the trade unions. It reinforces Labor's rejection of a more market-based workplace. It reinforces Labor's preference for collective action over individual aspiration. At a time when shadow treasurer Wayne Swan and Tanner have been slaving to build Labor's economic credibility as its priority, this popular decision will undermine those efforts. How much sense does this make?

Beazley could have easily sought to reform the AWAs. But he has chosen instead to rip them up in the cause of collective agreements and trade union rights. At a time when people ask what Labor stands for on the economy Beazley has given an unequivocal answer: it stands for collective rights. Beazley told the cheering audience that "the party I lead will unashamedly be the party of collective bargaining and collective agreements".

While AWAs are new, Labor's crusade is ancient. Its roots lie in traditionalism, class politics and labour movement tribalism. It reflects the abiding conviction that the labour movement speaks for the best interests of ordinary Australians.

The reason that AWAs are detested is because they eliminate trade unions as a party principal. These are deals between individuals and employers. They now constitute 6 per cent of workplace penetration and symbolise a different economic and industrial philosophy, a shift away from class conflict, a guarantee of greater choice, a weakening of the privileges accorded unions in the workplace and the ability to trade off wages against core job conditions.

The ACTU campaign has been aggressive and effective. And why not? The unions stand to lose power and privileges, so their campaign as an interest group is highly rational. They exploit the classic case against change since the losers can be identified as real people while the gains are spread across the community and nation. The core union position is that without access to collective power, individuals will be intimidated by employers and see their living standards eroded.

Yes, there will be such employer abuses. But will the Australian people, most of whom won't be affected, vote on this principle? Ultimately, this is a battle over ideas, or perhaps scares.

Beazley has taken a big gamble and given Howard a big target. Howard has fought for 25 years to reform Australia's industrial culture. If Labor decides this is the symbolic cause of the 2007 election then this contest becomes the climax of Howard's career and it is almost inconceivable he would retire rather than seek to complete his lifetime objective.

Howard's industrial reforms embody his vision of Australia and his judgment about its people. His two main judgments are that Australians will accept reform to reflect a more entrepreneurial economic culture and that class rivalry is finished as a defining element of our politics. In this sense the 2007 poll may become another test of whether the people trust Howard.

As a ruthless campaigner Howard will run his trade union scare against Beazley's lower living standards scare. Meanwhile, Labor has a related decision to take: whether it repays Howard for the 2001 election by running a "dog whistle" campaign against foreign workers.

Labor believes it can use AWAs to win back the Howard battlers. Indeed, it discerns this voting trend now. Frankly, it is hard to see how Labor can detach the battlers without the leverage of adverse economic results, notably higher interest rates. The evidence so far is that AWAs (before the new law) left employees better off by 5 per cent for non-managerial individuals. The new law will encourage the trade-off between wages and conditions but Howard will have no trouble finding employees who will lose from Labor's abolition pledge.

Paul Keating has told Labor it needs policies to win the new class of workers created by 20 years of economic deregulation. Yet Beazley is heading in the reverse direction. Even when Labor brings down policies to attract these people, its pitch will be shot by the demand that it be judged by the icon of collective power.

Finally, Labor seems utterly confused about its relations with the unions. Are they a declining ally to be supported from a distance or the essence of Labor faith with whom crusades must be shared? In Jones's book, union leader Bill Shorten, seen as a future ALP leader, floats the idea of Labor seeking a constitutional referendum for a guaranteed right to collective bargaining. The insertion of labour market regulation in to the Australian constitution offers the ultimate choice between Labor and Coalition over how to manage the globalised world.