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Keating: the ALP and economic management « Previous | |Next »
May 1, 2006

The political wisdom is that the ALP lost the last election (2004) because it failed to contest the Coalition on economic management, and so feel victim to the interest rate scare that appealed to fear about the ALP not being able to manage the economy.The ALP did not respond to the fear that suburban Australia would lose their homes. Those on $70,000 a year, with the highly geared McMansions, and two kids in private schools vote for 'keeping the economy strong'. They vote Liberal.

This is not the Tory working class scenario. Informing the 2004 election are the background changes flowing from the economic reforms of the pro-market Hawke and Keating Government and globalization. This is transforming the economy, and it created a whole new class of economic agents--subcontractors, consultants, home-based office workers etc are the big winners in the 'new economy'. This new middle class has become agents of their own economic future and they vote Liberal.

In an extract from George Megalogenis', The Longest Decade, Paul Keating and John Howard, published in today's Australian Paul Keating, the former ALP leader, says:

What's happened to the Labor Party since 1996? It has gone back to the old anvil. It's walked away from financial innovation, from the opening up of the economy and the whole meritocracy model of widening its own appeal to single traders, to sole operators of business, small business.

The post-1996 ALP has given away the economic credibility it had earned during 1983-1996, and it failed to modernize its policies under Beazley.

Megalogenis' says that the former prime minister argues that deregulation created a new type of voter, the former blue-collar worker turned small businessman. But Labor, in vacating the field of economic reform, allowed this socially conservative voter to move into the Liberal camp. As Howard observed to Megalogenis the new upwardly mobile middle class rejected Keating's social policies for a republic and reconciliation:

They're [the self-employed voter] are a natural fit for me. The thing is, a lot of those people are socially conservative, they don't like all this trendy stuff.

They're now rusted on Liberal and they listen to Howard's language of national unity. That is the significance of all the values stuff in contemporary politics. The new upwardly mobile middle class is the new moral middle class.who live in a world bounded by their experiences of work, families, the neighbourhood and a taken-for-granted nationalism.

| Posted by Gary Sauer-Thompson at 4:24 PM | | Comments (2)


I have a lot of time for Megalogenis. Unlike seemingly most journos in the Murdoch press, he seems to appraise the Labor Party with a fairly unbiased eye.

I concur. He understands truth in politics.He also has a good grasp of the way politics and economics intertwine since 1996.

What Hawke and Keating refuse to acknowledge is that, though their economic reforms were in the national interest, they destroyed thousands of jobs in the traditionally protected manufacturing industries. They were seen to betray their own class they were meant to protect.

The betrayed became Howard's battlers in 1996. It was a historic victory. Nothing that Beazley has done in his shift to the right has bought them back to the fold.The ALP has not recovered from that defeat which went to the heart of the ALP identity---it continues to shift from the old class politics of the trade union base and the social democratic inclusiveness for the new professional middle class.