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The Privatisation Debate and Labor Tradition

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The Privatisation Debate and Labor Tradition r The Privatisation Debate and Labor Tradition Shawn Sherlock University of Newcastle The debate surrounding the ideological underpinning of the ambiguous, section two would appear to be more explicit, committing Australian Labor Party (ALP) has been a constant companion to the the Party to the "establishment and development ofpublic enterprises, development of policy both in government and in opposition since based upon federal, state and other forms of social ownership, in the Parties origins in the 1890s. The privatisation debate ofthe 1980s appropriate sectors of the economy".? The 1982 Conference that had saw the Hawke governments come under sustained criticism for the developed this Platform had however passed a resolution that gave shifting of the Party to the right and for the betrayal of the Labor the incoming Hawke government some freedom. Policies geared tradition. This paper will examine the privatisation debate in the light toward producing a "sustained economic recovery" were to be given ofthis concept of tradition, and its usefulness to historians in trying precedence over all other Platform commitments.8 This was to prove to gain an insight into the motivations of the protagonists of the a significant caveat. time. The fundamental nature of the privatisation debate to the The future arguments within the Party dealing with privatisation understanding of what the ALP actually stands for makes it an were to centre on this commitment to public ownership, both important and controversial subject for labour historians. Much "traditionally" and explicitly in the Platform, and the need for those previous work in this area, due not least to the closeness ofthe era to arguing for privatisation to convince the Party to change the Platform current writing, has been of a highly politicised and partisan nature. to allow for major enterprise sales. With the focus of the Hawke A more sober overview of this crucial debate within the Labor Party, government's shortened first term being the deregulation of the focussing less on whether Hawke was right, and more on the impact finance and banking sector and the establishment of the Accord, it ofthe debate on the positioning of 1980s Labor in relation to its past was during the second term that the privatisation debate emerged as is necessary. This paper will argue that an awareness of the a central and divisive issue. The Coalition had begun highlighting complexities and contradictions of the concept oftradition is essential the potential for the privatisation of public enterprises such as to the study of this debate, and that an understanding of the Australian Airlines (orTAA in the early 1980s), Qantas and Medibank evolutionary nature of this tradition is needed to link the Hawke Private, with at least the deregulation ofTelecom under consideration governments of this era to Labor governments of the past. by the 1984 Federal election. In 1985 the Liberal Party committed There are many competing views as to what constitutes the Labor itself to the sale of the Housing Loans Insurance Corporation, the tradition, and it will be argued in this paper that there is no one true Australian Industry Development Corporation and Medibank Private, tradition. However an example of some popular concepts of the Labor and to examining other enterprises including the Commonwealth tradition will help clarity the argument. In Transforming Labor, Peter Bank.9 Beilharz argues that there are three main "golden ages" of Labor Labor attacked the Coalition's policy at this time, with senior history focused on by different groups within the Party.' Some look figures including Hawke and Keating making strong statements to the Party's formation in the period of the Great Strikes of the reaffirming Labor's commitment to public ownership and opposition 1890s as what Beilharz describes as a " ... foundation of fire" and the to any "Thatcherite" privatisation plans. In a quote that was to be moment when Labor was closest to its working class origins. 2 Others consistently used against his later pro-privatisation arguments, Hawke look to the 1940s and the Curtin and Chifley governments as the stated in July 1985 that the proposed sale of assets by the Liberal "golden age" of full employment and opportunities of post-war Party would be" ... a one-offfire sale; a 'sale of the century' of your reconstruction.3 Still others see the Whitlam era of the early 1970s assets, the assets of the people of Australia. They would transfer as the benchmark. 4 These periods are idealised and romanticised and them into the hands of a privileged few to the cost of every one of are then used to measure present incarnations. us".'o Keating also went on the record in May 1985 stating that: "No Eric Hobsbawm defines this as "inventing tradition" and suggests matter where one looks whether it be at TAA or the other authorities that, "[i]n short, they are responses to novel situations which take there is no case for the Opposition's argument in economics except the form of reference to old situations, or which establish their own simply to indulge ideologically in a Thatcherite vandalistic splurge past by quasi-obligatory repetition".5 The privatisation debate of the to try and destroy these authorities"." 1980s saw this concept of tradition mobilised by both sides in arguing By early 1986 however changes began to appear publicly at the for a more market oriented approach to the ownership of Government top levels of the ALP in its attitude toward the privatisation issue. Business Enterprises (GBE), or in appealing to an interventionist Minister for Finance Senator Peter Walsh made a speech to a seminar past. That privatisation is now part of the Labor tradition is an on the topic of privatisation organised by the Financial Review for example of the evolutionary nature of these "invented traditions", if February 26, 1986 in which he stated that" ... if its cheaper to put one that many contemporary members feel uncomfortable with. the control of operations of public enterprises into private hands, In examining the Hawke governments relationship to any Labor then I'd like to do it that way".'2 Walsh went on to suggest that he tradition, an understanding of what the Party had committed itself to had no particular ideological preference for public or private by the time of the 1983 Federal election, particularly in relation to ownership, and that he was disappointed that people were allowing public ownership, is essential. The 1982 ALP Platform began with the privatisation debate to become "politicised and polarised".13 the statement of the "Objectives", committing the Party to " ... the "Those at the conservative end of the spectrum want to privatise democratic socialisation of industry, production, distribution and everything that moves. Some at the progressive end s~em to favour exchange, to the extent necessary to eliminate exploitation public ownership at all costs, simply because the conservatives and other anti-social features in these fields".6 Does this want privatisation".14 Walsh was not suggesting wholesale objective commit the Party to public ownership? If this is EJ privatisation of GBE in this speech, in fact making the point -- -------- that selling off the "good performers" and leaving those with worse President of the ACTU and Secretary of the NSW Labor Council balance sheets was a major flaw in the opposition's approach, but it John MacBean suggested on 16th August that the union movement was a significant public shift in emphasis from a significant figure would "call for the scrapping of the prices and incomes accord if the within the Cabinet. government moved forward on any planned major enterprise sales", The June 1986 policy discussion paper Statutory Authorities and and that the "view of the ACTU executive was 'bloody near' Government Business Enterprises; Proposed Policy Guidelines, unanimous".23 The Victorian ALP conference on the weekend of the echoed the tenor of Walsh's February speech in calling for a more 15th and 16th of August had passed a motion condemning any sell I'i ' rational, less "ideological" debate. 15 As an official statement of future off of major enterprises such as Australian Airlines, Qantas, Australia policy direction this provides greater evidence of the government's Post, Telecom and the Commonwealth Bank.24 As holder of a thinking. It again criticises those who "". seem to favour public Victorian seat the message could not have been clearer to Hawke. ownership at all cost ... " and establishes the guidelines for the future However the plans of Hawke and Keating for further asset sales control of GBE along deregulated, "market - oriented" lines. 16 The remained unclear. The crux of the argumentjorpotential privatisation paper goes on to state that: "The proposed approach to government presented by Hawke was that the need to reduce government spending business enterprises has three specific components: the preparation and the need to restrict public sector borrowing as a drain on available of strategic plans including financial performance objectives; a finance and levels ofdebt, may inhibit the growth of GBE and reduce reduction in direct controls over the day to day operations of their efficiency and value to the public.25 The government could not enterprises; and improved quality of information for the assessment afford to simultaneously inject large quantities of capital into of enterprise performance". 17 The first two of these were of particular enterprises such as the airlines and fund initiatives in the social significance to the broader debate in that the government was both security and health areas. I, deregulating in terms of its direct control over the enterprises, and With the next National Conference of the Party set for June 1988 I through setting financial objectives, demanding a commercial rate the leadership pushed hard to gain support for a change to the Platform of return.
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