Labor & Medicare

If the Australian Labor Party were a company, its board of directors would be seriously looking at themselves and their strategic plan. The glory days of 2007, when the ALP formed every national, state and territorial Australian government, are long gone. Its market share has collapsed, its sales force is confused and demoralised, and its new product offerings at best misunderstood or underappreciated by its once-faithful customers. All polling indicates that the ALP core vote has now shrunk to something less than 30 percent on average, and in some key demographics and regions to much less than that.

- By Bill Bowtell


Federally, the ALP has struggled to put together a government matching in capacity or longevity either the Hawke-Keating Government (1983-96) or the Howard Government (1996-2007). This has not been because of any lack of policy ambition or the qualities of the senior leaders of the contemporary Labor Party compared to their predecessors. Rather, the ignominious decline of the oncedominant ALP has its origins in the virtual evaporation of what should be the core business of any major political party – that is, the grinding process of developing, debating, refining, reviewing and implementing new policies.

Between 1967 and 1972 and again between 1975 and 1983, the Labor Party used its time in Opposition to create the policy foundations for the Whitlam, Hawke and Keating governments. At state level, in Opposition between 1988 and 1995, the New South Wales ALP devised new and attractive policies that underpinned the subsequent success of the Carr-led New South Wales governments. Between 1996 and 2007, the Federal ALP Opposition largely failed to produce policies that matched the breadth and depth of the social reforms of the Whitlam period, or the economic dynamism of the Hawke-Keating governments. By its very nature, reform of the status quo is difficult, unpopular and slow. Analysing problems, devising solutions and implementing change necessarily takes months and years of debate in order to form a consensus for action. Proposals for profound reform will always be initially unpopular when they are proposed. They will be bitterly opposed by those interests with a financial and political stake in maintaining things as they are. The forces of reaction will marshall focus groups, shock jocks, opinion polls and the shills of the commentariat to derail, delay and defeat profound changes to social and economic orthodoxy. Historically, the response of the ALP (and it must be said, the Liberal Party) in its prime was, in most cases, to damn the torpedoes and press on. No rational observer can seriously doubt that Australia is a wealthier and happier place because both sides of politics cheerfully took an axe to policies and procedures that had long since ceased to serve the national interest.

In the 1980s, the ALP faced the challenges of an ossified, sclerotic economy being strangled by protectionism, high tariffs and taxation, low savings rates and fixed exchange rates. From 1983 on, the Hawke-Keating Government demolished the foundations of the old Australian economy and built something infinitely better on the rubble. But nothing worthwhile that came out of these glory days of social and economic reform was accomplished easily or quickly. The bigger and better the reform, the longer it took to get up. Nothing better illustrates this than the torturous path to implementation of Labor’s greatest social reform – the national health insurance scheme known first as Medibank and finally as Medicare. The introduction of universal health insurance, and all that flows from it, has been the ALP’s most profoundly held, consistently argued and unifying policy commitment for over four decades. No other set of policies has so united the ALP, transcended generations of its leaders and members and cemented its credentials with the voting public than the set of health policies combined under the shorthand term Medicare, and its predecessor Medibank. In 2011, the key elements of Medicare – universal health insurance coverage funded by a levy on income tax and a single payer for medical and pharmaceutical benefits – are accepted as part of the social and economic furniture. But when Whitlam Labor first developed it in the late 1960s, Medibank was bitterly opposed by a range of powerful medical, insurance and political interests.

Medibank/Medicare was a simple, bold and deeply radical reform that, reflecting the breadth and depth of the forces opposed to it, was trenchantly contested at every election from 1969 onwards. Medibank was a crucial factor in securing the great swing to Whitlam Labor in 1969 and propelling Labor to power in 1972. The Coalition’s refusal to pass the Medibank legislation in the Senate helped to bring about the 1974 double dissolution. Medibank’s eventual introduction in mid-1975 helped precipitate the constitutional crisis of that year, the dismissal of the Whitlam government and the election of the Fraser government, which campaigned vigorously on the repeal of Medibank. The landslide defeat of 1975 and its repeat at the 1977 election did not diminish the ALP’s resolve and commitment to Medibank.

Rather, from 1977 onwards, the ALP reworked the Medibank concept into what became known as Medicare. Learning the right lessons from the controversies over Medibank, in Opposition the ALP launched a sustained program of consultation, dialogue and review with the entire health sector, and the broader public. While reaffirming the core principles of Medicare, the ALP leadership reworked the details to fashion a better and more robust health reform package. Medicare was debated at every level in the ALP. By the time of the 1983 election, Medicare was perhaps the only policy agreed on unanimously by the political and industrial wings of the ALP and across the factions and the branches. The ALP commitment to Medicare had been painstakingly built over the almost 15 years between the 1969 and 1983 elections. In 1983, the Hawke government’s Medicare proposal had been considered and reviewed by every important stakeholder and interest group, even those who were not its supporters.

Consequently, the ALP government moved rapidly to introduce the Medicare legislation that passed through Parliament in late 1983 allowing the scheme to commence operation on 1 February 1984. However, the introduction of Medicare, and its subsequent endorsement by the Australian people, did not lessen the intransigence of its opponents. After its introduction in 1984, the Coalition opposed Medicare and advocated its repeal at the elections of 1984, 1987, 1990 and 1993. In 1996, the only substantial policy commitment that John Howard was obliged to make in order to secure victory that year was to accept the Medicare scheme in its entirety. Medibank/Medicare therefore was reform that took a generation from 1969 until 1996, to pass from bold idea to established order. Medibank/Medicare was contested vehemently by four Labor leaders and six Leaders of the Opposition at 11 federal elections. Medicare could not have succeeded had it been a timid or marginal reform to the health system. Had focus groups and shock-jocks dictated the fate of Medibank/Medicare, it is more likely than not that it would have been modified out of existence in the years of Opposition in 1975-83. But it was not – thanks to the marriage of bold policy, excellent process and inspired political leadership. Compare the sustained corporate commitment displayed by the ALP to Medicare with the continuing imbroglio over climate change policy.

As with Medibank/Medicare, the ALP is nominally committed to a massive reform project, with a tax change at its heart and a range of consequential impacts on the interests of varied and numerous stakeholders. Not the least of these impacts is an unknowable impact on jobs, including those of unions loosely affiliated with the ALP. The need for the ALP to develop plausible climate change policies had been apparent since well before the 2007 elections. At that year’s elections, the ALP matched the Howard Government’s commitment to an ETS scheme. Yet while the principled commitment was made, the ALP was either unwilling or unable to undertake the long, grinding work of forging a consensus for these changes within the ALP, or among its broader constituents and support base. It is almost impossible to implement and develop such complex policies solely from within government. Yet, in the absence of any robust and meaningful policy-making institutions of the sort that existed in the ALP in earlier decades, policy-making from government was the only option remaining for the Rudd and then the Gillard Labor Government.

It is not to derogate in any way from the commitment, hard work and capacities of Kevin Rudd, Julia Gillard and their senior Ministers on the climate change issue to say that the task of transforming a general commitment on climate change and the ETS into workable legislation was deeply compromised by the irrelevance and atrophied institutional decay of the ALP. The functional reason for the existence of a political party is to set the big goals, advocate the radical alternatives and, as far as possible, to shape the policies into a realistic and workable whole to be implemented by government. On the whole, it is better that political parties create and shape this blueprint in Opposition. This was done by the Whitlam Opposition in 1967-72, by the Hayden Opposition in 1977-83 and, interestingly enough, by the Hewson/Howard Opposition in 1990-96. Each of these oppositions worked hard to create a workable set of policies that subsequently served them well in government.

Between 1996-2007 it was the failure of Labor to renew its machinery, overhaul its policies, attract new members and modernise the party that left it institutionally and politically under-prepared for government in 2007. As the Labor Party gave up the business of producing contemporary responses to current problems, so too did it leach its most dynamic and committed members and supporters to the Greens and other new political structures that emerged to fill the vacuum. Policy disagreements and conflicts whether on climate change, carbon tax, gay marriage, refugees, immigration or a host of other issues, would once have been debated and resolved within the broad church of Labor. Every indication is that these broad policy differences will now have to be dealt with outside the old ALP and hammered out in some form of agreed policy deal between the ALP and the smaller progressive parties and factions whose support will be crucial to win and retain government.

The rub for Labor is that these policy deals will have to be agreed before, and not after, an election if Labor is to have any hope of winning the election in the first place. This means that the once dominant Labor party will have to contemplate becoming simply the largest party in a coalition, somewhat in the nature of the relationship that now exists between the Liberals and the Nationals. The price of such a coalition for Labor will be to countenance its smaller partners transforming their votes into seats in the House of Representatives, at Labor’s expense. For Labor, this prospect is almost beyond imagination, but, unless it is prepared to bring into being a new Labor party with policies and processes that meet the needs, hopes and aspirations of the new generation, its fate is sealed.

The ALP would do well to learn from its history and revert to the methodical and inclusive policymaking processes that underpinned its great reform period in the generation from 1969. If it cannot deeply reform itself, then how can the ALP credibly take a reform agenda to the Australian people?