Labouring to navigate big rough tides

Labour-type parties aren’t doing well in our part of the world and in many of our sorts of countries. Is this conservative triumph or are bigger forces in play?

In Australia Labor lost unexpectedly in Victoria and in a heap in New South Wales, is in deep trouble in Queensland, South Australia and Tasmania and in opposition in Western Australia and the federal party is polling at wipeout levels. Here Labour has averaged around 32 per cent in recent polls.

In Canberra this has spawned talk of replacing Julia Gillard, deemed toxic because of her carbon tax, to escape a New South Wales-type wipeout in 2013, a win now being thought highly unlikely.

Fear of wipeout was why Helen Clark in 1990 replaced Sir Geoffrey Palmer with Mike Moore as Prime Minister 53 days before the election. The same fear prompted a botched putsch against Clark in mid-1996 when Labour was polling under 20 per cent, a distant third behind New Zealand First.

Some have that fear now, intensified by an early-July bad-for-Labour poll and the spectre of National’s 21 per cent in 2002. Phil Goff can’t get traction against super-saleable John Key. Could someone else — David Cunliffe, David Parker, Shane Jones — crumple Key’s halo a bit and get Labour off the polling floor?

Actually, there is no convincing evidence Moore did better than Palmer would have in 1990 or Gillard better than Rudd would have last year. Moore led Labour to a smaller vote share in 1993 than in 1990. Gillard has now taken Labor below Rudd’s poll trough. Bob Hawke’s strong win after replacing Bill Hayden weeks before the 1983 Australian election was when Labor was on a upswing, not in a trough; Labor would have won with a “drover’s dog”.

Still, Hawke did make a difference. Leaders do — in the short term. David Lange was a star in Labour’s 1984 landslide election but couldn’t manage his cabinet (and just months before the 1984 election his indifferent showing had Labour strategists pondering whether to downplay him in the campaign). Sir Robert Muldoon went from star in 1975 to toxic in 1984. Could Key lose his shine next term if hitched to Don Brash and voters turn grumpy at service cuts?

There is also a risk in a dramatic near-election spill to fix low polling: if voters sense panic, that can blank out the sheen on the fresh face. Panic doesn’t point to assured, measured, reliable government and in these edgy and turbulent global economic times competence and confidence are at a premium.

Rebuilding the nation’s and households’ balance sheets after the debt binge is a 10-year haul. High commodity prices help but they don’t automatically and evenly flow through to households and commodity prices can change suddenly.

Underneath that adjustment is a more wrenching one: to a world of complex interdependencies and interconnections from which we can’t seal ourselves off and in which the margin between our wages and those in a swag of once-poor economies is shrinking. That adds to pressure on households.

Moreover, that complex global economy is unstable so big shocks are possible. The Atlantic giants’ finances, banking systems and economies are distorted and fragile. Their wages, like ours, are under attack. China has seismic social distortions. Global resource prices are very high and destabilising.

So fiscal prudence and caution are in political fashion. Conservative parties by and large do that better, at least in rhetoric, than social democratic parties. That — for now — is the case with National and Labour (plus National is still a fresh face).

But if times are too tough for too long with no relief obviously in sight, populist movements can rise. New Zealand First in the early-mid-1990s is an example here. In the United States, now under global wage attack after decades as top dog, the very-small-government Tea Party supplied many of the United States Republicans’ new Congresspeople in their landslide last year, including ousting mainstream candidates. They have been blocking moderate Republicans’ attempts to deal with Democrats to lift the limit on the federal government’s capacity to borrow, so it can pay its bills after next Tuesday.

Populism doesn’t solve problems. It compounds them. If the Tea Party over-reaches, voters may look to the Democrats.

Here there is no Tea Party. Populist New Zealand First is a shadow of its 1996 self. ACT might conceivably get a late swell of votes on small-government and foreshore/seabed grounds but is not a Tea Party. For now National is in charge but even conservative parties are vulnerable in times of economic and social turbulence.

So the real problem (and opportunity) for Labour is to build policies to navigate the mountainous seas of an unpredictably changing and shock-prone world. The test of a day-long left-leaning Fabian Society economics symposium tomorrow will be how much of that sort of thinking is on show.

Meantime, there is an election to be run and, for Labour, probably lost, Goff or not. Then what?