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The inaugural address of The Light on the Hill Society

- sponsored by Revesby Workers Club

STRICTLY EMBARGOED UNTIL DELIVERY (7pm)

Senator John Faulkner: Public Pessimism, Political Complacency: Restoring Trust, Reforming Labor.

I have always believed that politics is worthwhile.

This is not, nowadays, a popular view.

Important issues are, we are told, ‘above politics’— because politics, by implication and expectation, are the province of the low road.

No more damaging charge can be made than to say someone is ‘playing politics’ with an issue — because, by implication and expectation, politics is a game played for personal gain and for entertainment.

But politics is one of the ways – the chief way – any democracy works out solutions to its problems. Politics is a way to manage substantial disagreements within a society or a community, and to bring about real change for the better. Our politics is the expression of our values, our beliefs, and our policy priorities. Politics is about the public good - not private interest.

Widespread contempt for the practice of politics is not because Australians have lost faith in what politics really is. It is because too many Australians have come to see our parliaments, our governments, our political parties, and our politicians, as practising not politics but its opposite: a values-free competition for office and the spoils it can deliver.

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Individuals who transgress – recent examples being Peter Slipper and Craig Thomson – are seen by many as representatives of the rest. There is no doubt that the seemingly unending parade of current and former politicians from both major parties through NSW’s ICAC has been the icing on the cake as far as that view is concerned.

But these individual symptoms would not have as much impact if there were not a deeper disease in our democracy – a deficit of that trust on which democracies depend.

That trust is not – or is not necessarily – trust of any particular individual involved in the political process, but trust in the political process itself. Trust that elections are conducted fairly and that they produce legitimate governments, even if they are not the government of our preference; trust that in the balance between the executive government, the parliament and the courts, each fulfils a specific and necessary role; trust that even where we disagree with policy, it is shaped and delivered by our representatives, and that those representatives make informed judgments based on sound advice.

On that consensus of trust rests the operation of our government: the ability to make decisions, even where they may not be popular; the ability to pass laws, even where they constrain or disadvantage some members of the community; the ability to assign what may be scarce resources to priorities, and therefore not to other areas or interests.

On that consensus of trust has been built some of humanity's most courageous efforts to transform the world in which we live.

Without that trust politics is a contest of personalities, not ideas — a contest with no more relevance than an episode of Masterchef, for without trust in the political process how can any of us believe that the votes we cast influence the future direction of our country?

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Our trust in our democratic institutions – such as parliament and our political parties—has been undermined by how they’re portrayed and perceived, but also by the very real flaws in our democracy.

Spiralling costs of electioneering have created a campaigning ‘arms race’ – heightening the danger that fundraising pressures on political parties and candidates will open the door to donations that might attempt to buy access and influence.

In Australia, as in other democracies around the world, the potential for large and undisclosed sums of money in election and campaign financing has become more and more a matter of concern to the public. These perceptions of possible influence need not be only concerns about potential undue influence in the narrow sense of how government decisions are made, but in a broader sense: concerns that parties and politicians dependent on large donors will be if not compliant, then at least receptive, or that large donors and fundraisers may get access that others do not.

The perception of undue influence can be as damaging to democracy as undue influence itself. It undermines confidence in our processes of government, making it difficult to untangle the motivation behind policy decisions. Electors are left wondering if decisions have been made on their merits.

I have argued long and hard about the need for reform of our electoral funding laws at the federal level. Unfortunately, I was not persuasive enough, particularly when I was the Special Minister of State, to convince the Senate in 2008 and 2009 that reform was desperately needed. My attempts to make our system more transparent and freer from corruption and improper influence failed.

Political parties have a privileged position in our electoral system. Any Australian can run for public office, but a registered political party can be formally recognised on the ballot paper, nominate multiple candidates, and receive public funding for its election costs if its endorsed candidates receive at least 4 percent of the vote. 4

In the past four Federal elections, over $180m of public funding has been dispersed, with over 80 percent of that funding going to the two major parties.

Political parties also have privileged access to the Electoral Roll, and are exempted from most of the provisions of the Privacy Act in their use of the Roll, as long as that use is for ‘electoral purposes’.

I believe these privileges bestowed by legislation should entail strict conditions and obligations for those political parties which qualify for them.

Party members and the public at large are entitled to know that standards exist, that these standards are open to public discussion and public assessment, and that they must be met.

Principles of integrity, transparency, and accountability are crucially important to Labor’s reforming agenda, because they enable that faith in the political process which is critically important to the consensus building that makes reform possible. And those principles are equally important to Labor’s historic values of fairness and equality, because they safeguard our movement against vested interests, self-interest and unfair advantage.

The stench of corruption which has come to characterise the NSW Labor Party must be eliminated. Failing to act is not an option. The Party which gave you Eddie Obeid, Ian Macdonald and Craig Thomson, and promoted Michael Williamson as its National President must now be open to scrutiny and its processes subject to the rule of law. In fact, I believe that the rules and decisions of all political parties should be justiciable, and that State and Federal Governments should consider making a party’s eligibility for public funding contingent upon it.

All party tribunals must be impartial, independent and conducted fairly. The party must insist on a binding code of conduct for its candidates, parliamentarians and officials. The recent NSW Annual Conference adopted my proposed rule change to include this in the NSW Rules. All state and territory Conferences, and National Conference, should do so as well.

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The practice of factions, affiliates or interest groups binding parliamentarians in Caucus votes or ballots must be banned. Factional binding is inherently undemocratic. It allows a group with 51% of a subfaction, which then makes up 51% of a faction, which in turn has 51% of the Caucus numbers, to force the entire Caucus to their position. This Russian doll of nested factions is profoundly undemocratic and, as we have seen in NSW, wide open to manipulation.

The reforms I proposed as Special Minister of State included significant measures:

 to reduce the donations disclosure threshold from its current level of $12,800 to $1,000 and remove indexation;  prohibit foreign and anonymous donations;  limit the potential for 'donation splitting' across branches, divisions or different units of parties;  require faster and more regular disclosure of donations; and  introduce new offences and significantly increase penalties for the breach of electoral law.

These reforms would have enhanced the transparency and accountability of political donations, and I would like to think they would have had at least some dampening effect on the behaviour that is being exposed at ICAC. It is quite clear that much more needs to be done in this area. The recent events in New South Wales should motivate all Australian political parties to work together for far-reaching and long-overdue reform of our electoral donations, funding and expenditure laws. This is a real and urgent challenge for all political leaders.

Elections must be a contest of ideas, not a battle of bank-balances.

And in that contest of ideas, our political parties are paramount. In our two- Party system the selection of candidates and the setting of policies within the major political parties have perhaps as great an influence on Australia’s governance as do general elections. It is therefore essential that Australia’s political parties are open, transparent and democratic – no code-words, no cabals, no secret handshakes. 6

Labor at its best would take the lead in fixing this problem.

The best way for Labor to demonstrate that we are genuine in pursuing reform is to reform ourselves.

Labor is dedicated to the basic principle that any community or country is stronger when all of us are involved in our democracy. That no government can find the best solutions to the challenges facing us, without drawing on the abilities of all of us – the experience, the knowledge, the skills, the judgement of the whole community, and not just a section of it.

Our Party was formed with the conviction that working men and women could not get fair representation without participation: that no government would consider the needs, or could reflect the priorities, of those with no seat at the table. When we talk about Labor’s commitment to democracy – our long history of broadening and defending the franchise, of striving to safeguard the fairness of the electoral system – we are talking about policies that reflect those central, original understandings. No-one speaks for us who does not accept our right to speak for ourselves; and no policy solution can be considered complete if the list of those contributing to it is partial.

Labor’s original structures, although they varied from colony to colony, all reflected that basic belief in democratic participation. As the Party grew, the sheer practical difficulties of a mass party in a nation the size of the continent were resolved with models based on delegation.

Labor’s model of delegated democracy was cutting edge – in 1891.

A hundred years ago, the difficulty of travel and communication around our huge continent made party members’ direct participation in the ALP’s organisation impractical. The solution was for local members to delegate their democratic rights. Today, the problem and the solution are out-of-date. Today, the abuse of those structures too often smothers Party democracy. Today, we can – and we must – do better.

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We now have technologies that offer unprecedented opportunities for the direct and secure communication of information. More importantly, they provide us with unprecedented opportunities for interaction. And they are woven into everyday life so inextricably that, to the younger members of our community especially, they have become invisible.

They offer a huge potential to party organisation and for party democracy, and at the same time fundamentally change expectations of participation, engagement and responsiveness.

Labor’s structures and organisation must be based on the way people today organise, communicate and participate – not, as our current structures are, on the ways that their grandparents did.

Australian political parties have begun, perhaps more slowly than in other countries, to engage with social media as a campaigning tool. Even I am now on Facebook. But the internet – email, Facebook, Twitter, blogs, YouTube, Google Plus – are not merely broadcast mediums with the potential to reach many more people for much less effort and expense than mail-outs or television advertisements. They are immediate, interactive, tools for community activism. Their prevalence – and for more and more Australians, their pervasiveness – has, I believe, profoundly changed our ideas of community and our expectations of what community – and political – involvement looks like.

Twenty-first century democracy is very different from even ten or fifteen years ago: self-organising, intolerant of top-down management, expecting interactivity and immediacy.

Geographically based organisation, face-to-face meetings, complex procedures and delegated decision-making suited an Australia without cars or telephones – even the Australia of my student days, before faxes or answering machines, let alone mobiles and emails. But it does not suit Australia today.

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Structures which were once the cutting-of edge delegated democracy are now used as a way to prevent democracy, to prevent open debate, and to consolidate the power of the powerful in the Labor Party. As a Party, we should be true to our heritage and embrace real reform and an opening-up of the Party’s decision-making processes. We should to the maximum extent possible adhere to the fundamental principle of one person, one vote.

Labor’s recent leadership ballot was an important first step. But promising first steps should not be confused with the journey’s end.

There are many more steps on the road to increased participation of voting members.

Our branch members have been the lifeblood of our Party, but branch attendance is no longer the only way to measure activism and commitment, and voting in our internal ballots ought not to be regarded as a reward earned only by those able to negotiate arcane rules.

Preselections ought to be the opportunity to determine who is best suited to campaign for Labor values in the community and legislate for them in Parliament. They must have wide participation from Labor members and supporters.

I support the community preselections trialled in NSW with weighted votes from Party members equalling declared supporters, and I believe they should become the rule, rather than the exception.

I continue to argue for a full, statewide ballot of all Party members to preselect candidates for upper houses – again, to test their abilities to persuade and represent their statewide constituency.

I proposed this rules change at the recent NSW Annual Conference and it was defeated. I do not pretend to think that this reform or others, are or will become more popular with factional managers and powerbrokers.

There are very few voices among those with formal or informal power within our Party who are willing to contemplate, let alone advocate change - despite the increasingly loud calls for reform from members and branches. 9

I may be beating my head against a brick wall, and of course I will be criticised for what I am saying tonight, but I cannot in good conscience cease to argue for a cause I believe is both right, and necessary, and in the Labor interest.

Labor’s State and National Conferences should also become more representative and democratic. Conferences must begin to include a component of directly elected delegates. Every eligible member of the party should have the opportunity to vote for these Conference delegates, through direct member ballots. Proportionate regional zones could ensure broad geographical representation.

The existing and widening chasm between Labor’s commitment to democracy and our internal practice of it, between our focus on the future and our antiquated organisation, undermines our policy agenda and casts doubt on its authenticity.

And I say to those who resist the opening up of our structures to more participation and more democracy, because they see their control over managed and pre-negotiated outcomes slipping away – stop clinging to the wheel. You are steering us straight for the rocks.

Those anxious about reform should remember that Labor’s history has been, first and foremost, a story of reform.

Reform of the laws covering Australians in the workplace and the unions that represent them, to ensure fair pay, bargaining power and decent conditions. Reform of the economy – whether the creation of the Commonwealth Bank at the beginning of the last century or the floating of the dollar at its end. Reform in health care, from the PBS to Medibank to Medicare. Reform in social policies, from the old age pension to equal pay for women. And let us not forget, Labor’s history of reform is also the story of reforming ourselves.

These are all aspects of the same single story – a story that has changed and evolved over twelve decades, but one where the hopes and aspirations, as well as the flaws and struggles, echo and repeat.

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Previous generations of Labor activists, parliamentarians, and Party officials took on the, at times, difficult and thankless task of reforming the Party and its policy. One lesson that Labor’s history has for us is that we cannot expect to repeat past successes if we shirk similar burdens.

The other lesson our history has is that the decisions of our predecessors were shaped by circumstance, rather than being timeless and immutable expressions of Labor’s spirit.

Our debates over the best path into the future have always involved attempts to lay claim to our past. Each generation of Labor members and activists chooses their own icons and their own history, to become their guide and justification – a weapon of choice in battles against foes within and without the party.

But mistaking history for immutable truth obscures not only the reality of the present but the opportunities of the future.

While Labor’s structures and rules have always been the expression of the best efforts of the men, and later men and women, of the time, they have also been the expression of their blind spots and assumptions, and – like our policies –– require regular revision to meet the challenges of a changing world.

We need a clear-eyed appreciation of our past to take a hard look at our future direction.

Although it was once accepted wisdom that Australia “rode on the sheep’s back” and it is now often said that we ride the wave of demand for our mineral wealth, the truth is and always has been that Australia’s prosperity has been carried on the backs and built from the labours of the working men and women of our nation.

The labour of their hands has built our country’s wealth; the labour of their hearts and minds have built our country’s strength, the great social contract that underpins the fundamental egalitarianism which has set Australia apart. 11

Through collective action and mutual support, these men and women strove in the 19th century to build better lives, better working conditions, better opportunities, for each other and for those who came after.

By the 1890s, their efforts were directed both through the union movement and through the Australian Labor Party, and that commitment to a better and a fairer future was directed not only to those who shared a workplace or an industry. It had become a broader commitment to all: a commitment that could only be realised through government action and through legislation. The Australian Labor Party was born from that desire to ‘make and unmake social conditions’: one of only seven parties with formal, organisational ties to the union movement, in the world. These ties are the defining characteristic of a labour party.

For twelve decades those ties have strengthened us, and challenged us. They have been a constant of our history and I believe will be a constant of our future.

But the form and structure of those ties has changed many, many times.

Labor was founded 123 years ago and in the decades since, Australia, Australia’s workplaces, and Australia’s union movement have changed, in ways unimaginable to our founders.

And the Labor Party has changed with them. Indeed, the history of Labor is the history of these changes – sometimes dramatic, sometimes subtle, reforms to the relationship between the Party and the movement, to the formal rules that govern our interaction.

It is only in recent generations that Labor has ceased to constantly re-evaluate and re-assess that relationship

It is only in recent years that the rules we have, which are a product of the power struggles of the past and the accidents of history, have come to be seen as the holy grail of Labor organisation by some members of the Labor Party and the labour movement – who are, it must be said, advantaged in internal party power distribution by the way things are today. 12

But we do not become less a Labor Party because we scrutinise ourselves.

Any more than we are less a Labor Party because of the reforms instituted by McKell or Whitlam.

The Party’s relationship with affiliated trade unions should no longer be just about direct control through 50:50 rules and the like, but about greater consultation and involvement. We have to make the relationship more meaningful and mutually beneficial.

Trade unions are, and will remain, important for Labor. They are a social force, albeit a declining social force, but in an age where collective identity and endeavour is fracturing, union membership is a connection to shared efforts and progressive ideas: to economic justice, to solidarity, to co-operation.

We will not meet the urgent challenges of this new century without those values, and unions, and union membership, build and strengthen those values in our community.

But all too often unions are viewed – and behave – in the Labor Party as just institutions: large, faceless institutions controlled by union secretaries, who are in turn obedient to factional cartels. And right now, that is how union engagement with the Labor Party works.

I would like to see our Party actually engaging union members: giving them a voice, giving them a vote. They should have a direct say, just as Party members should have a direct say, not have their opinions filtered through layers of delegation.

Influence over ALP policy should depend on the strength of your case and the quality of your argument, not on the number of members you claim belong to your union – a claim which, as we have seen recently, does not always accord with reality.

If union secretaries fear they will make no impact on Labor without the bully pulpit of the 50:50 rule, they should ask themselves how they expect the Labor Party to persuade the community to support policies and candidates which union leaders cannot even persuade ALP members to endorse. 13

To deepen and strengthen the relationship between the labour movement and the Labor Party, rank and file unionists, working people, must represent their unions in our Labor Party. If we are to be a Party representing a movement, then we need to ensure that working people are present and playing a role in key decision making forums.

Australia is changing, and the Party and unions have to change with it. We need to rebuild Labor from the grassroots – not the top down.

We have to democratise our Party and reach out to union members and involve them directly in the Party’s decision making processes.

This should lead to a deeper relationship with organised labour as a fundamental part of our Labor community.

To achieve this, the Party should encourage members of affiliated unions to join the Party and participate directly in Party decisions and deliberations.

For the purpose of determining union affiliation numbers, unions should only be able to count members who have agreed to their membership being counted towards that affiliation in an opt-in system.

All union delegates to Party Conferences should be elected through a ballot of union members, conducted under the principle of proportional representation, and should not be appointed without election. Unions should be required to amend their own rules, to fulfil this objective.

Our current State Conference structures provide 50% representation to affiliated unions – which represent only a portion of the 17% of working people who belong to a union at all. This must change.

The component of conference delegates directly elected by party members, which I spoke of earlier, should increase over time, while the percentage of both the delegates elected by Electorate Councils, and those elected by unions, should reduce in tandem. I would hope to see a structure with 60% of Delegates elected by the membership, 20% by the Affiliated Unions and 20% elected by Electorate Councils, reached in stages over the next three National Conferences. 14

Even then, there would still be a positive disparity or “over representation” of union proportionality to unionisation of the workforce. There would also be an incentive for union members to have a direct relationship with the Party as well as participating through their union. Indeed, being active in both Party and union would provide additional opportunities to participate – activism would be rewarded.

Democratic, representative, transparent systems ought to be the goal of all political parties, but most especially the Australian Labor Party, which was founded on the belief in the value of the participation and representation of everyone in our democracy.

This belief, deep in the bedrock of our Party, gives us both an unique advantage and an unique responsibility in facing the challenges that now confront our Australian democracy, which remains, however flawed, not only the best but the only way for our country to work together to face the challenges of this new century.

Labor has at our core the values which can revitalise our political system and restore faith and confidence in the power of democratic government to resolve our differences and surmount our difficulties.

Having those values, we cannot turn our back on the problems our democracy now faces. It is our challenge, and our duty, to take the lead in restoring trust.

We must start by reforming ourselves.