Australian political discourse is dominated by ahistorical hyperbole, every election defeat is a landslide, every consecutive electoral loss indicates complete political marginalisation, every poll slump is a crisis, and every struggling leader is the worst ever. Australian Labor is not faring well but we need to distinguish between the ebbs and flows of the political cycle and the fundamentals. Australian politics may be approaching a fundamental break. The political era that began in the early 1990s may be coming to an end and with it Labor's hegemonic position in Australian politics that has endured since Gough Whitlam.
Until the 1970s Australian Labor at the federal level constituted a remarkable paradox. Compared to other social democratic parties elsewhere the ALP had exceptionally high levels of electoral support; it averaged over forty percent of the vote at national elections from 1914 to 1972. Yet in these decades Labor won only one election from opposition. Even Labor's outstanding record during World War II gave it only two election victories in 1943 and 1946. Labor enjoyed exceptional support from highly unionised manual workers but the price of this was an alienation of non-manual workers. By the 1960s even young voters, once pro-Labor even during Labor's darkest days in the 1930s, were notably more inclined to support the Coalition.
Labor's fortunes began to revive from the late 1960s. Since 1972 Labor has won 9 out of 16 federal elections. Labor's recovery was built on the work of Gough Whitlam who configured Labor's appeal to focus on cultural nationalism and the extension of government services. The policy record of the 1940s Labor governments was actually similar to that of Whitlam but it was unable to overcome perceptions of Labor as party of manual workers and unionists.
When Australian Labor came to power in 1983 the economy was in a severe recession. Bob Hawke promised Whitlamism plus responsible economic management. The recovery of the economy during the early Hawke-Keating years enabled Labor to consolidate its position the preferred party of 'economic management'. Labor became the natural party of government just as the conservatives had been from 1914 to the late 1960s. John Howard's victories were against the political tide just as were those of Curtin and Chifley in 1943 and 1946.
The Howard years commenced with the 1996 election. By that year economic growth was strong but the overhead of debt and weak corporate balance sheets meant that the recovery was not apparent in employment. Paul Keating's boasts of an economic recovery alienated voters. After 1996 the economic recovery finally began to impact on unemployment. The export boom and the productivity surge contributed to rising living standards despite the continuation of the redistribution of income towards profits that had occurred during the Hawke years. However the signs of economic recovery were only faintly apparent in Howard's first two years when One Nation surged and won support from conservative voters discontented with the economy. Howard's success at the 1998 election despite his pledge to introduce a GST is often cited by supporters of the carbon tax. However by 1998 (unlike 1993) the GST was on balance a vote-winner (unlike the carbon tax). The Coalition shed low income voters in 1998 but they compensated (just) for this loss by winning over higher-income Keating loyalists from 1996. Even by 2000 voters remained deeply unsure about the economy although they welcomed the signs of recovery. In this context the introduction of the GST briefly generated a panic among voters that the good times were ending, when this panic was unfulfilled a fundamental shift emerged in public opinion. Voters began to assume that the good times were here to last. Something similar had occurred in the late 1950s as voters finally moved on from memories of depression, war and the early 1950s inflationary surge to take prosperity for granted. The late 1950s shift in public opinion was another nail in Labor's political coffin but the early 2000s shift to economic optimism although it benefitted Howard in 2001 and 2004 did not destroy Labor's fundamental electoral advantage. Menzies survived the recession of 1961 but Howard could not survive WorkChoices.
To the left and Labor Howard's ascendancy evoked frustration, anger and envy. Hawke came to power in 1983 with a promise of Whitlamism-lite and Kevin Rudd in 2007 promised Keatingism-lite. Labor would inherit a strongly growing economy and take up where it left off in 1996. Hawke's early focus was on the reduction of industrial conflict and the restoration of Medibank/Medicare. However the long-run success of the Hawke government required it to deal with different issues from those of 1982-83: international competiveness and economic liberalisation. Voters considered that Labor dealt with these issues successfully. The Rudd-Gillard government has struggled to respond to the changed economic environment. Rudd seemed to believe that the stimulus package would restore the economy to the growth path that it had been placed on by the Hawke-Keating reforms. However the consumption surge of the mid 2000s was not sustainable it was driven in part by an unsustainable trend in asset prices as Reserve Bank Governor Glenn Stevens has argued. British Labour, as Duncan Weldon has argued, surfed a similar asset price boom to political success. Rudd's ascendancy in 2008-09 was the last apotheosis of the Hawke-Keating years. In the United States the Clinton model slowly unravelled from the busting of the tech boom but voters blamed the Republicans for its demise. Barack Obama thought he could go back to Clinton circa 1999. Like Rudd and Gillard Obama has found that the past is another country.
The Australian asset price tide has run out and voters are disappointed. Julia Gillard has more than her share of self-inflicted injuries but ultimately it is the stagnation of living standards that is responsible for Labor's woes. Voters are receptive to Tony Abbott's argument that he can take them back to 2007 minus WorkChoices. However Abbott cannot really do this. If Prime Minister Abbott cannot deliver on expectations disillusioned conservative voters may turn to the radical right as they did in 1996-98. One Nation self-destructed and its anti-Asian crusade failed to strike a popular chord, but now Australian Muslims provide a more plausible target for the radical right. In 1996-98 conservative elites repudiated One Nation's racism but now The Australian muses darkly on the 'Islamification' of Sydney suburbs. In the long-view Keating, Howard, Rudd and Gillard were more similar than they would admit but the future of Australian politics may be quite different. Electoral stability may give way to political upheaval and a revived populist conservatism may challenge the Coalition from the right just as the Greens have challenged Labor from the left.
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