The Three Narratives about NSW Labor

It’s been interesting to see the public debate come out in the past few days around who was responsible for the loss of the ALP.

I told a friend the other day that I believe there are not two narratives between right and left in the party about what went wrong. There are actually three narratives.

These are:

1. The Sussex Street Narrative – supported by the Head Office party machine.

2. The Macquarie Street Narrative – supported by the NSW parliamentary right faction, and other supporters of electricity privatisation.

3. The Rank and File Narrative – supported by the left faction, some unions, and other rank and file reformers.

The three narratives can be summarized by examining the following questions.

Why did Labor lose?

Who is responsible for it losing?

Should electricity have been privatized?

Where does the ALP go from here?

Lets examine the three arguments in detail.

The Sussex Street Narrative

Key Supporters: Sam Dastyari, Mark Arbib, Graham Richardson

Key articles/texts:

Sam Dastyari’s article in the SMH

Mark Arbib’s 7.30 report interview

Graham Richardson’s article in The Australian

Why did Labor lose?

Labor lost for two main reasons. Firstly, it was at the end of a natural political cycle of sixteen years. Secondly, Labor ran a bad government in the last four years, which made the loss much worse than it should have been. We went through an unnecessary public fight about privatization, which resulted in the downfall of a premier. We then went through two more premiers and a number of ministerial scandals, and took our eye off the ball on policy that helps working families.

Who is responsible for the ALP losing?

The parliamentary wing is primarily responsible. It pushed the privatization debate against the will of the party and the Unions. It attempted to defy the will of conference to get the policy voted up. It is also responsible for the poor behavior of MPs. Sussex Street is not to blame for any of this stuff happening.

Should electricity have been privatized?

Both the party members and the unions didn’t support it. The public were also strongly opposed. There was the risk the ALP would lose office over it. Therefore we were opposed.

The parliamentary wing persisted with the policy even when it was voted down at conference. This was technically against party rules and a breach of the McKell model. Eric Roozendal’s second attempt was also a bad idea. Both of these attempts resulted in a complete loss of confidence in us by the public.

Where does the ALP go from here?

Some reform is necessary to re-engage our base and grow our party at the grassroots, but not any reform that weakens Sussex Street’s hold over the party. People will come back to labor if we start talking about the issues that concern them.

The Macquarie Street Narrative

Key Supporters: Morris Iemma, Michael Costa, Paul Keating

Key texts:

Michael Costa’s Opinion piece in The Australian

Simon Bensen’s book, “Betrayal”

Paul Keating’s interview on the 7.30 report

Why did Labor lose?

Labor lost because our plans for privatization were blocked. This brought down Morris Iemma, Michael Costa and destroyed the government.

Who is to blame?

Sussex street, the unions and the ALP Left are all to blame. The unions and the left ganged up on the parliamentary wing to block the sale at conference. Sussex Street didn’t back the Premier, and instead undermined his position. They willfully and publicly supported the destruction of the government.

Sussex Street should never have intervened in the debate and stood against the Premier. Under the traditions of the McKell model, the party machine should have supported the government of the day in whatever policy it was putting forward, even if that meant it taking a stand against the Unions. Sussex Street are a soul-less policy free zone of hacks who just sit around listening to focus groups instead of helping the party tackle hard policy reform.

Should electricity have been privatized?

Yes. The sale would have allowed competition in the sector, driving prices down. Morris Iemma’s sale model also gave concessions to union members, but the Unions decided to say no. The sale would have delivered a windfall to government that could have been spent on Infrastructure. We were so convinced of the correctness of this policy that we pushed it even after conference voted it down.

Where does the ALP go from here?

Reforms need to be introduced to restrict the power of Unions and the Sussex Street machine to undermine the prerogatives of the Parliamentary Labor party. We need to get back to the McKell model where the party leadership stands with the parliamentary wing, not the industrial wing. Anyone involved in the destruction of the government from the Sussex Street/Unions side should not have any place in the party’s future. Mark Arbib, John Robertson, Bernie Riordan and others should not be in positions of influence.

The Rank and File Narrative

Key Supporters: Luke Foley, Andrew West, Paul Pearce, Rodney Cavalier, Darcy Byrne

Key texts:

Luke Foley’s Message to ALP members

Andrew West’s SMH article

Rodney Cavalier’s book “Power Crisis”

Paul Pearce statements

Darcy Byrne SMH article today

Why did Labor lose?

Labor’s loss can not be explained away as some end of a political cycle. The sheer scale of the loss can only be explained by deeper, more serious structural problems within the ALP.

The party stopped sticking up for workers and we failed to build the infrastructure and services that they need. We had no on the ground presence at the election and this made it worse. The ALP has completely lost touch with the concerns of the community, because we stopped being a party that has any presence or connection to the community.

The party should never have even started the debate about electricity privatization. It was never going to be supported by the community. Morris Iemma himself had said before the 2007 election that he wouldn’t do it.

Who is to Blame?

Sussex Street is primarily to blame. Macquarie Street was wrong to push privatization, but most of the MP’s in Macquarie street owe their careers to Sussex street anyway. For all intents and purposes they are the same machine called Centre Unity (the NSW Right), and they are just having an internal dispute.

Over the past few decades, Sussex Street has:

a) Wrecked the ALP’s grassroots base by taking power away from them over preselections and policy

b) run a corrupt patronage machine from head office via powerbrokers like Tripodi, Roozendal and Obeid

c) Promoted soul-less hacks, fundraisers and right wing ideologues to seats in state (and federal) parliament.

This machine created the debacle of the ALP in the last term.

Should electricity have been privatized?

No. Electricity assets are utilities and should be kept in public ownership, especially generators. Private ownership in electricity just pushes prices up with no guarantee of new assets. The policy did not have the support of unions, the party, or the electorate. Eric Roozendal’s second attempt was even worse than the previous model and led to the certain collapse of our base vote.

If the party wants to change policies on public ownership it must seek a mandate at conference. If this mandate is rejected by conference, further attempts are against the platform.

Where does the ALP go from here?

The ALP must grow as an organization if it is to survive and get back in touch with the community, and survive as a party of social democracy.

Reforms need to be introduced at the next State conference to take power away from Sussex Street and Macquarie Street and give it back to the rank and file. Party members must always have the say over rank and file pre-selections and the ALP platform, without Sussex Street intervention or defiance from Macquarie Street.

The party should implement the recommendations of the 2010 ALP National Review at the next NSW ALP conference in full. The party should also consider reforms that go even further than the ones contained in that document to promote the grassroots.

Conclusion

As can be seen, all three views share some common ground with each other. All parties agree that the fight over privatization, the way it occurred, was just plain dumb.

Sussex Street and the Rank and File were on the side of public opinion in opposing electricity privatization.

Macquarie Street and the Rank and File have no particular sympathy for Sussex Street’s Iron Grip on power in the ALP (but for different reasons).

Macquarie Street and Sussex Street may hate each other, but they aren’t particularly interested in grassroots democracy (apart from paying it lip service).

This is an argument about power in the ALP, and who controls it.

A solution to the issue will probably depend on debate and compromise, or else the rank and file getting more of the numbers to force change. John Robertson’s role in championing one view or the other will be key. Whether one argument wins the day will ultimately be up to the numbers at conference. Personally I'm a strong supporter of the Rank and File Argument.

If the party gets it right, it could be a real clause IV moment, and renewal and growth will come quicker. If not, Labor will spend a long time in the doghouse.

Blue South Wales

Yesterday Barry O'Farrell delivered the last rites to the NSW Government. Some conventional wisdom peddlers will state that the loss is due to natural political cycles. But as Luke Foley said on the ABC on election night: this is more than a conventional political cycle. A conventional political cycle would see Labor lose an election (like Victoria), not be completely annihilated like this.

There's a risk that this loss will prove to be structurally damaging to the Labor Party in NSW.

For starters, there's the lack of Labor MP's. This makes opposition more difficult, when nearly the entire parliamentary delegation will have to be shadow ministers.

Secondly, the Sussex Street Centre Unity machine that NSW Labor nurtured for over seventy years has been severely weakened by the events of the past 4 years. It may yet implode on itself. This would be a good thing. But until this machine is replaced by something else, there are some rocky roads ahead.

How did this all happen? It's true that much of the damage was self-inflicted. It's also true that Barry O'Farrell is a very underestimated politician. But before we touch on those things, it's important to understand a bit of history.

The NSW Labor Machine

NSW Labor has been in government for about 50 of the last 70 years. This is not an accident. It has consciously nurtured structural bases of power in NSW over many decades, both electoral power and money power.

Over long periods of government in office, NSW Labor has built up a large amount of connections in the public service. Departmental heads, senior advisors, and board directors of state-owned enterprises are often linked to the ALP in NSW. On Insiders on Sunday morning, Gerard Henderson called it a "Mates-ocracy". At the liberal party's campaign launch, Tony Abbott called it a "stinking patronage machine". Few within the party would disagree with this, especially those on the ALP Left.

So what exactly is this machine? It's simple - the ALP machine is an electoral coalition of right wing mates backed by powerful stakeholders. At various stages over the last 70 years, the NSW ALP has had backing from the Catholic Church, the Clubs industry, the Hotels Association, the gambling industry, the racing industry, property developers, real estate agents, and many other sections of the business community. It has also had the institutional backing of Unions, particularly right wing unions like the TWU, SDA, HSU and AWU.

The NSW Labor party has also been wise to seek out the support of many migrant communities in Sydney, to join their electoral coalition. In the western suburbs of Sydney, NSW Labor was able to tap into the concerns of migrants and bring them into its base.

People associated with many of the above groups belong to the Centre Unity faction - also known as the NSW Right. This is the faction that has had the numbers in NSW for a long time. It's no secret how it works. The aforementioned groups provide money, people, and votes - all of which the ALP uses to get itself re-elected. In return, the ALP passes policies friendly to these groups. To think anything else is completely naive. It's a 21st century Tammany Hall.

It's easy to see, with such a huge amount of institutional backing, how NSW Labor became the best resourced, most effective political machine in the country, delivering itself power over and over again.

The only problem has been this - Centre Unity is itself now an unstable political machine, struggling to justify its existence in the 21st century. It's malaise has been the Labor Party's malaise.

Decline of the NSW Right?

The NSW Right is being pulled in several directions, to such an extent that it doesn't know what it stands for any more.

Sixty years ago the faction did have a clear purpose - to oppose communist influence in trade unions, and to propose moderate, electorally successful (although still distinctly Labor) policies - as a way of keeping out liberal governments that would attack unions, Catholics, and later migrants. In other words, Centre Unity was the political coalition that opposed commies on the left and conservatives on the right.

But after the fall of the Berlin Wall, much of this reason for existence was undermined. A large debate then went on about what the right should stand for. Some wanted it to be more socially progressive, especially in its younger ranks. This rankled with old-school Catholics and many migrant groups, who correctly judge the political values of their communities as more conservative, and say that the party must accommodate and reflect those views in order to maintain its structural advantage.

People like Michael Costa wanted to turn the faction into the country's biggest cheerleader of neoliberalism. This doesn't sit well with the union movement, who know that it's generally their union members who lose out. It also clashes with the views of Labor's base working class voters. Unions themselves don't want to give up their power because they fear what a non-union dominated Labor party would look like.

And then of course - the stinking patronage machine. Big donors want to continue to have access and influence in order to make money. Property developers in particular. This clashes with the Labor party's progressive beliefs about big monied interests.

Where is the NSW Right faction now?

Most NSW Right faction leaders want the faction to continue to run the party with scant regard to the health of its grassroots. This clashes with the modern view of campaigning found in the Labor Party's 2010 National Review, which identifies the importance of community organising, local engagement, and involving rank and file Labor supporters in party decision making as much as possible.

In the absence of ideas or one clear and consistent direction, the faction merely acts as a soulless factional patronage machine without any clear ideology. It gets wheeled out at election time to raise funds and run attack ads. Then it disappears for a few years, quietly dishing out favours to mates and picking up a few barnacles as it sails aimlessly onward.

Because it doesn't know what it stands for (and it's not a machine with deep community links), the faction has to ask focus groups to figure out what to say. This would be softened somewhat if there was a stronger ALP Left faction. But sadly, the left is on the decline too - bleeding volunteers and young people to The Greens.

It's clear that this can't go on. Now that the ALP is out of government, it can't rely on big donors any more. It must rely on a grassroots base. But the ALP has been a party without members for many years now, due to Centre Unity's iron fist.

Now that its tentacles of influence have been removed from government and other power bases in NSW, the faction is going to seriously struggle. And rightly so! There's no point persisting with a political machine unable to justify its existence in 2011. The machine has lived well past its use-by date, despite what some of the hacks will try to say. Anyone who tries to defend it is on the wrong side of history.

Barry O'Farrell is underestimated

Barry O'Farrell understands much of the above. O'Farrell understands that his ability to run a long term government depends on his ability to keep key stakeholders on his side, while undermining any other structural support bases for Labor. Everything he's done over the past 4 years as opposition leader can be viewed through one prism: O'Farrell has maximised political damage to the ALP at any possible opportunity.

Going back to 2008 - he took a highly unprincipled decision (from a liberal point of view) to oppose the sale of electricity assets. He was highly criticised for that decision by many conservatives, but there can be little doubt that O'Farrell's decision ruined the political careers of Michael Costa and Morris Iemma. It also fatally weakened the state government, which never recovered in polling.

Since 2008, the Coalition has done some quiet, but very hard work getting key stakeholders on the coalitions side. Property developers sent a lot of money supporting the National Party, as did the clubs industry and racing industry. Even got the NRL on side back in December. One of his first acts as premier may be to beef up donations laws to more greatly restrict election spending by unions.

Most smartly of all, he moved to detoxify the liberal party's image in western sydney that it only stuck up for racist rednecks, or white men in pinstripe suits. Moderate candidates with local migrant backgrounds were preselected, like Tony Issa and Dai Le. O'Farrell went wining and dining with many migrant communities and asked for their support. He consciously tried to distance the state liberal brand from the federal liberal party (and ALP), and it worked. He was also assisted in this task by federal Labor's abandonment of multiculturalism at the last federal election.

The liberals have finally realised that some migrant groups are conservative, and would ordinarily vote liberal on their values if the ALP hadn't stuck up for multiculturalism. John Howard and Pauline Hanson drove many of these voters away from right wing politics - Barry has won some of them back.

Barry O'Farrell won the election by doing exactly the same thing NSW Labor has done over the years. Appear moderate. Win key stakeholders. Appeal to Sydney's large migrant community. Run negative campaigns against your opponent. It's not the most original strategy for winning government, but it's highly effective, and it worked.

The people left voting for Labor are people who truly do rely on Labor - poorer workers, unionists, public housing tenants, some migrants and the long term unemployed. Basically everyone else went to the liberal party.

Where to from here?

The election result was a catastrophe but it will allow once and for all for a debate about party reform to be had. John Robertson is likely to be made leader - he comes from a working class union background, and he understands grassroots campaigning in and out. In 2007 he and Adam Kerslake co-ordinated the Your Rights at Work campaign in NSW. He will hopefully understand the need for change. On the other hand, he will be in debt to the right wing machine that gave him his upper house spot, arranged for him to be made the candidate in Blacktown, and then sent every right wing hack and unionist in NSW to go and campaign for him.

He will not automatically do the right thing any more than Sussex Street or the other leadership candidiates. He must be forced to do it like everyone else.

On a broader point, Labor must soon make a choice about its future direction. Does it want to win the next election by doing what O'Farrell did, rebulding the lost political machine, the patronage network? I argue that now is the time when we can replace the rotten machine with something better.

We must reform and grow as a grassroots organisation

Now that Labor is out of power right across Sydney and NSW, it needs to rebuild a grassroots campaign network capable of running a huge grassroots campaign in every seat. That's not just hard, it's necessary. Labor only has about 20 seats. You need 47 to form government. That's a lot of seats we need to win back, and not a lot of money or people to do it with.

It's not a coincidence that some of the best ALP results in 2011 came in places where an active campaign was run with many volunteers. Huge Labor campaigns in Marrickville, Maroubra, Toongabbie, Wallsend, Granville and Blacktown helped Labor win seats or at least keep the swing lower. The same thing happened at the federal election in seats like Robertson and Lindsay, which saved the Gillard government.

This sort of saturation campaigning on the ground actually works - but it was only made possible because the party strictly prioritised where to send it's already thinning membership base to campaign. Everywhere else had no campaign at all, and the consequences of that were obvious. Bathurst swung over 30%. Parramatta by 29%. Resources were pulled from these seats ages ago, because there just wasn't enough money or volunteers to go around.

There's only one solution - more people. In particular, more ALP members. It's not enough to wheel out a whole bunch of Union Organisers at election time to run around marginal seats. That's a failure in itself, because it's an admission that we have nobody in the community. We must have a local community presence or we'll be dead.

If we're to be a grassroots movement, we have to actually address the real reasons people don't join the ALP and/or stick around. These come back to rules, the National Review 2010, and the way the NSW has run the party with an iron fist - crushing democracy and crushing hopes for a more progressive Labor party. These are the elephants in the room, and all players must recognise them.

The Sussex Street machine will no doubt attempt to cling on to its structural control of the party. It will propose some reforms, but none that threaten its control. Power is never given - it must be taken. This will require a grassroots campaign in itself - the left must be active and it must grow. Otherwise decisions will be taken without its input, and nothing will change.

Real change means the National Review 2010 being implemented in full, as a bare minimum. Preselection powers should be returned fully to membership, and Sussex Street should give up its veto. Members of the executive and conference delegations must all be elected. Without these things, people will still see no value in getting involved. Labor is supposed to be a party that believes in social democracy, but it's probably the least democratic political party of its type in the world.

Once this is done, the next step will be to regain local councils in NSW. There are council elections in NSW next year, and that will be a good opportunity for the party to come up with a consistent local government agenda that can be campaigned on at the grassroots in local communities. That can be a way we can re-engage people to get involved. That will be the key to oppose the likely liberal and national party orgy on some issues around local government matters.

There's also a practical reason for this - the next council elections after that won't be until 2016. With an O'Farrell re-election likely in 2015, (plus a possible Gillard defeat somewhere before then), that's five solid years in the doghouse in NSW. That amount of time spent out of any public office will be enormously damaging to the party and, perhaps, the state.

After council elections, we should do as Sam Dastyari proposed, and exploit some of the ideas the coalition have, like petitions to parliament to trigger parliamentary debates. Those would be great ways to assist the parliamentary labor party to set the agenda, despite its low amount of numbers.

To do all of this, we have to go back to our political roots - standing up for workers rights, cost of living issues, public services, and local community concerns. We can't do this without reform and fast change. It will be tough to regain credibility that quickly - it requires a real Clause IV moment, followed by a fundamental change in the way things are run. John Robertson may be the person to do this, but grassroots pressure still needs to be there from below to make it a reality.

There's a lot of work to do, and this moment seems dark. But this is an opportunity as much as a threat, to create something more hopeful out of the ashes. It need not be a Blue South Wales for long if we force our way down the right path.

What is Social Democracy?

I was thinking the other week about the crisis of conviction within Labor. Much has been spoken about a destructive internal party culture and a dysfunctional, soul-less organisation. A number of books have covered off the current crisis - for those interested, I recommend Rodney Cavalier's book as a very good take.

But the more I thought of it, the more I realised that these problems were mere by-products of something far greater. An organisation can be dysfunctional, and the Labor party has certainly been that way over many parts of its history. But there's only one reason that dysfunction would become the sole focus - and that's if there's nothing else to talk about. In the absence of a clear set of beliefs, these other things become amplified.

Labor's crisis is one of conviction - of not knowing what it stands for, as distinct from the Liberal Party on its right, and increasingly, as distinct from the Greens on its left.

This is not unique to Labor parties around the world - most social democrats in Europe now find themselves completely out of power as well. Since many went down the road of co-opting many of the doctrines of neoliberalism, what makes them different than conservative governments?

On social policy, the divisions have been clear. You could summarise them as "the culture wars". With such a wide ranging economic consensus between conservatives and social democrats, these culture wars have become amplified as the sole focus of politics. And yet, it's that very economic consensus, not spoken about, that actually makes a difference in people's day-today standard of living.

Perhaps we need to go back to a very fundamental question - what is Social Democracy? Why does it exist as an ideology? Why were political parties formed, with names like "The Labour Party", or the "Sozialdemokratische Partei Deutschlands (SDP)", or "Sveriges socialdemokratiska arbetareparti"? Why was there a special place on the political spectrum called "social democracy, somewhere in between socialism and liberalism? And more importantly, knowing this, where does it sit in a modern context?

What does Social Democracy stand for, as distinct from:

1. Neoliberalism/conservatism on the right
2. Pure Socialism on the left
3. Green Politics

The difference between S.D. and Liberalism/Conservatism/Neoliberalism

Liberalism is about the individual rights and responsibilities of a person under the law. Neoliberalism is about the economics of an "individual" in the market. Both of these philosophies stress smal government and the promotion of the individual as an economic actor and his/her rational decisions. It rejets collectivism and government intervention as an "impurity", and that the economic good is best served when markets are allowed to function without state intrusion.

Social democracy stresses the rights and responsibilities of people, and the economics of common people and workers. Social democracy recognises that markets are fallible and don't produce the best social outcomes if left to themselves. Social democracy realises that there are powerful forces in society that screw over workers, and they thus must be reigned in by a state that pursues the common economic good.

The difference between Socialism and S.D

Socialism promotes ownership of the means of production by the state, and the abolition of private markets. It views the market as the problem - creating an unjust society that does not act in the economic interests of workers, and that the answer is to abolish the market.

Social Democracy accepts public ownership as necessary in public goods, utilities, and some industries. It believes in universal public services as a way of narrowig the gap between rich and poor.

Social democracy believes in markets as "creators" of wealth under the right circumstances but it does not believe that markets distribute wealth fairly and equitably due to unequal power relations. Therefore social democracy believes that government may have to act to soften to market through eithr government regulation or direct state competition to keep it running properly (eg Medibank Private, Australia post).

The difference between Green Politics and S.D.

This is a contentious area because the Australian greens have stolen a lot of political ground that used to belong to Labor. Putting this aside, Green politics comes from a slightly different political tradition.

Green politics grew out of the environmentalist movement - and particularly takes inspiration from the idea of conservation.

To "conserve" is actually a conservative instinct, applied to the environment. It states that the environment is worth saving, because the environment is beautiful, animals and plants and native flora and fauna are worth conserving in themselves.

Social democracy and green politics will often converge on matters of policy. But the thing that seperates the conservation movement from social democracy is the philosophical approach to the environment.

Green politics prioritises the environment above all other things, often regardless of the impact on other things. There are some environmentalists out there who would gladly see logging in old growth forests stopped tomorrow, without considering the impact on a worker's job or living standards. Many green activists and voters are (or were) people who would chain themselves to trees to try and stop it happening.

Social democracy views environmental issues not just from a conservation perspective, but also from a humanist perspective. It does not believe in saving the environment just for its own sake, but rather because environmental damage can also be bad for humans. For example, certain types of pollution disproportionally affect working people, like poor air and water quality. The destruction of the environment can be bad for humans as well, for example, declining fish stocks and coral reef damage will affect the living standards of communities. A lack of sustainability in something like the logging industry can also eventually destroy jobs. And of course, the big one, climate change - if not for the fact that climate change would negatively affect human beings, social democracy would view it as something to be managed or accomodated, rather than actively attacked head on.

So what is social democracy?

1. The common good for workers and the middle class - including taking on big, powerful interests. Collectivism, not individualism.

2. The reduction of inequality, by the state providing public services as a way of reducing the rich/poor gap

3. The Market as our servant and not our master. State ownership of public goods, state participating in some markets, state regulations in others to ensure good social and economic ends

4. A humanist approach to the environment

5. A foreign policy that acknowledges power relations, but is outward looking and multilateral

6. Social policies that aim to eliminate discrimination under the law and in society, particularly against working australians and minority groups

What isn't social democracy?

1. Liberalism and neoliberalism

2. Individualism over collectivism

3. "Choice" or "nudge" economics that assumes a fair and competitive playing field can be created simply by providing people with more information so they can make a "good choice"

4. Environmentalism without a human focus or perspective

5. Pure socialism or a command economy as the solution in all circumstances