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State of NSW: Labor reaps what it sows after attacking the working class

NSW Labor is so detested that many inside and outside the party look back nostalgically to the leadership of that erudite policy thug Bob Carr.

As Premier, he stirred-up anti-Muslim racism for electoral purposes in the late 1990s and early 2000s. He privatised various State agencies including the TAB, an important cash cow. In the process of reducing the generosity and accountability of the NSW workers’ compensation system to injured employees, he crossed a union picket line to enter parliament house and aggressively flashed a V for victory sign.

But at least he had the nous to back away from privatising the electricity industry in the face of public and union opposition in 1997 and 1998.

Next Saturday Labor will suffer its worst defeat in NSW since 1932 and possibly more than a century.

When did the rot set in? Is this the end of the Australian Labor Party as a political force in NSW?

Labor has been the natural party of government in NSW since 1910, in office for 65 years over that century. Concentrated in Sydney, Newcastle and Wollongong and their surrounds, NSW has the largest working class and union movement in Australia and this has been the basis of the ALP’s strength.

The really sharp slide in Labor’s popularity began with the commitment of Premier Morris Iemma and his Treasurer Michael Costa to privatise the electricity industry.

Thanks to a revolt by Party members and affiliated unions, they lost their jobs. But the parliamentary leadership remained committed to this unpopular neo-liberal policy, worthy of a Jeff Kennett or John Howard.

A major electricity privatisation measure was consummated late last year. It symbolised Labor’s disregard for its core working class supporters, not only through incompetence, corruption and arrogance but also, fundamentally, because it puts profits ahead of the well-being of ordinary people.

This does not, of course, distinguish Labor from the other parliamentary parties, even the Greens. All accept the framework of existing state institutions and the logic of production for profit. But Labor is distinctive in a very important respect, its relationship to the major social classes in Australia.

By the late 1890s, the ALP had already taken the fundamental shape it has today. A party with a base in the working class, dominated by union officials and politicians, who are committed to managing Australian capitalism. It became and still is a capitalist workers party.

As early as 1911, the first Labor government in NSW, under Jim McGown, was ready to use scabs to break strikes by wharfies. It made the same threat against gas workers in 1913.

Since the 1950s, the particularly right wing complexion of NSW Labor has compounded its conservatism. The great split, between 1955 and 1957, took most of the right, associated with the Industrial Groups, out of the ALP in Victoria and Queensland. In NSW, most of the Groupers stayed and soon regained control of the State branch of the Party.

After the split the blue collar membership of the Labor Party fell. In the late 1960s and 1970s this was offset by an influx of white collar workers and members of the professional middle class.

In the 1990s a new period of decline set in. Compared with a national membership of 75,000 in 1953, the ALP publicly states that it has half that number of members today. Once inhabited by worker activists, many local branches are now moribund or stagnant, increasingly dominated by staffers and other hangers-on of MPs and wannabe parliamentarians.

The Accord between the Australian Council of Trade Unions and the Hawke and Keating Labor Governments of the 1980s and 1990s and then the Howard Government’s attacks on the union movement led to a dramatic drop in working class self-confidence and the rate of unionisation. Consequently there has been less effective pressure from below - within the ALP, through affiliated unions, or from outside - on Labor leaders to respect workers’ interests.

The hollowing out of local branches and low levels of rank and file activity in the unions undermined the forces inside the Labor Party that could hold ministers to account for their actions. Cronyism pervaded the ALP. In the parliamentary party and the dominant right wing ALP machine, in particular, preoccupation with personal entitlements was all that tempered the blind, stupid disdain for the practical concerns of even Labor’s core voters.

In all these ways, the relationship between the ALP and the working class is certainly much less intimate now than it was a century or even fifty years ago. But the 2008 electricity stoush and the eventual privatisation together showed that Labor was still a capitalist workers party.

The ALP will undoubtedly recover from the election debacle on Saturday 26 March, after a further election or two. The main reason will be the behaviour of the Coalition government.

Soon after the election, Barry O’Farrell’s government will probably make a Mother Hubbard announcement: ‘The cupboard is bare!’ Various election commitments, we will be told, are not binding under the ‘new’ circumstances. Austerity will be the order of the day.

Public transport, hospitals, schools and public welfare services will still be short of funds. There will be savage attacks on blue and white collar workers and their unions, especially in the public sector. Victoria, after the Liberals under Kennett won the office in 1992, will be the model.

Over months and years people will forget their current, justified detestation of Labor, as power goes to the heads of O’Farrell and his senior ministers, and hatred of their slash and burn austerity measures grows.

Labor’s recovery will be all the swifter if there is serious union resistance to Liberal policies in NSW. First a stronger union movement will translate into greater working class support for the ALP, as opposed to the obvious party of corporate capital. Secondly, sections of business may see the advantages of Labor’s approach to implementing profit promoting policies.

Thanks to the Party’s relationship with the working class, ALP governments can sometimes be more effective defenders of corporate interests than conservative administrations. After 1983, Prime Minister Bob Hawke succeeded in cutting real wages for years when the economy was growing rapidly. Maggie Thatcher in Britain did not achieve that, during the same period. Nor did Malcolm Fraser in Australia, between 1975 and 1983.

On the other hand, a revival in workers’ combativity may lead many of them to conclude that their own actions could challenge the logic of production for profits and the structures of Australian politics, both embraced by Labor, that create their immediate problems.

For more, read Rick Kuhn and Tom Bramble’s book: Labor’s Conflict: Big Business, Workers and the Politics of Class, Cambridge University Press, Port Melbourne, published November 2010.

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