July 2006                 

                Farewell to the tree-hugging premiers: state Labor’s new course 

Interviewed recently about a book on his term as premier of New South Wales from 1976 to 1986, Neville Wran was asked to nominate his greatest achievement. Some might have expected a boast that he delivered good government to the state’s four million or so citizens. Others a claim that he left the state better off, socially and economically. His answer, however, was something altogether different: ‘without a doubt, the rainforests‘.

That answer is worthy of reflection. There was no equivocation in Wran’s voice. The remark was prompt, direct and devoid of ‘doubt‘. Asked to look back over his ten years at the top, Wran’s eyes glided over the millions of people who lived under his government and landed on a bunch of trees. Of course, this was the man who also quipped, ‘the best thing about the working class is leaving it‘.

The key to Wran’s impaired vision emerged earlier in the interview, when he paid homage Gough Whitlam as his inspiration (though not his model). Despite their pragmatism and political astuteness, the Labor leaders of Wran’s generation were, on the whole, Whitlamites at heart. That is to say, their grand gestures were accompanied by a measure of condescension towards working people. They were more moderate than Gough - but theirs was a grudging moderation that accommodated ordinary voters while unfolding a cherished agenda from the 1960s, such as criminal and discrimination law reform, community welfare, nature conservation and aboriginal land rights. These initiatives brought new layers of bureaucracy in their wake.

The trajectory of Labor governments in the 1980s and early 1990s conformed to this formula. Emboldened by successive victories against dysfunctional oppositions, however, progressivism eventually trumped pragmatism, resulting in popular rejection and electoral wipe-out. Contrary to received wisdom, NSW Labor’s 1988 landslide defeat wasn’t all the fault of Wran’s successor Barrie Unsworth. Similarly, the current Labor government’s problems can’t be laid at the feet of Morris Iemma. He also inherited government from a Whitlamite who cites the saving of trees - this time in national parks - as his greatest achievement.

Whether Iemma suffers the same fate as Unsworth is yet to be seen; but it looks unlikely. Things are different this time. The socio-economic transformations unleashed by globalisation were barely underway when Wran left the scene in 1986. Over the last decade or so, however, these shifts have opened state politics up to whichever party can deliver infrastructure and services in an economy exposed to acute national and international competition. These conditions dictate a sea-change in political priorities since the glory days of Whitlamism. Contemporary Labor premiers understand this, and are responding more convincingly than their Coalition opponents. The pattern of pragmatism degenerating into unpopular progressivism has been reversed. For Iemma, this is the path to overcoming the ‘it’s time’ factor after twelve years of ALP government.

It is a truism of contemporary politics that state governments are squeezed between two competing pressures. On the one hand they must stimulate growth and attract investors, by cutting red tape, taxes and charges, and on the other meet public demands for better infrastructure and services, particularly in health and education. There are no easy escape routes from this predicament. In fact the fiscal squeeze will only get worse as the inexorable rise of China and India impacts on Australian manufacturing, concentrated in the south-eastern states, and the aging population spurs demand for services while suppressing revenues. The larger states also have a problem with the commonwealth’s distribution of GST collections.

The distorting effects of the Asian resources boom on national patterns of growth and investment are now widely appreciated. Other significant developments are not as well understood, though just as crucial.

The new urban geography

Since the 1980s globalisation has remade the urban geography of our major urban centres, which naturally absorb the energies of state governments. While Australian cities were traditionally dominated by unipolar central business districts, today outer suburban regions are increasingly autonomous, reorienting towards important regional centres emerging as CBDs in their own right. Moreover, these economic regions are assuming distinct identities related to their role in domestic and international supply chains. Within the broader context of globalisation, economic functions are spatially polarised between advanced business services in, or near, the traditional CBDs and ancillary services or industries in the middle to outer suburbs. The latter tend to be blue-collar and routine white-collar industries like manufacturing, warehousing, storage and transportation, wholesale and retail.

These outer rings are the cockpit of the fiscal squeeze, since their vibrant industries thrive on low margins and input costs, while their workers are affluent enough to expect efficient government services. The challenge of closing the inner-outer suburban gap in services and infrastructure is formidable. Since outer suburban industries tend to be geographically dispersed, and generally distant from international transportation hubs like ports and airports, state governments have no choice but to embark on capital intensive projects like efficient roadway corridors linking the entire urban region.

No wonder the premiers are obsessed with finding ways to relieve the fiscal squeeze. They know that the days of big government interventionism ended long ago, even if some Labor activists, and most progressives, are determined to block alternative strategies. The knee-jerk reaction against public-private partnerships and asset sell-offs reached hysterical proportions over Sydney’s Cross City Tunnel and the aborted Snowy-Hydro sale.

The logic of their position, however, compels the states to explore creative solutions to the impasse. Iemma came to the premiership declaring NSW ‘open for business’, and has since chipped away at a series of taxes, charges and regulations, especially those relevant to the property market, while streamlining processes for significant development approvals. There is clearly more to be done. Iemma recently earned some media derision for announcing ‘a plan for a plan’, but if he is serious about shaping service delivery ‘around the needs of the customer rather than bureaucratic rules‘, that is a rational policy response, consistent with his objective of ‘spending the taxpayer’s dollar in more effective and innovative ways’. All of this conforms to the so-called ‘third wave of national reform’ spearheaded by Victorian Premier Steve Bracks - a growth strategy driven by incentive payments for measurable improvements in ‘human capital’ services: health, education, training, productivity and work-force participation. These are positive moves, as long as John Howard and Peter Costello aren't too busy knifing each other to respond coherently.

Of course, the new urban geography has cultural as well as economic dimensions. For suburban routine workers, success in the open economy depends on somewhat traditional values like hard work, initiative and personal responsibility. Mark Latham may have lost the plot, but his insights into suburban culture remain valid: ’People do not want the troubles of other areas to follow them to the fringe. This is why they place a premium on public decency and responsibility … It is based on a practical understanding of how the good society requires a certain level of order and cohesiveness’.

The premiers know this cultural milieu emerges from underlying socio-economic trends, rather than ‘wedge politics’ practised by a crafty prime minister. Suburban workers have little tolerance for 1970s style civil libertarian law reform, particularly those living near so-called crime ‘hot spots’. Concentration of crime rates in certain middle-ring suburbs is, unfortunately, another feature of the new urban geography, particularly in Sydney. While economic opportunities are the ultimate solution, state governments have no choice but to respond with effective policing and tough penalties in the meantime.

Socio-economic polarisation begets cultural polarisation. At the other end of the cultural spectrum, environmentalists, activists and nimbys exploit modern communications like mobile phones, short message service (SMS), email, internet chat rooms, websites, web-logs and now ipods to orchestrate targeted campaigns against decisions they don‘t like. They couldn’t care less about the fiscal squeeze, since many of them live in the well-provisioned inner-suburbs. State governments, elected from relatively small electoral divisions, are particularly vulnerable to such campaigns. And the agitators have no shortage of boosters in the media, ranging from radio talk-back to the once venerable broadsheet newspapers. The Snowy-Hydro revolt is a sign of things to come. Just ask Queensland Premier Peter Beattie, who faces virulent resistance to his vital Traveston and Wyaralong dam projects. This is when Labor pays a price for lending credibility to ideological, as opposed to practical, environmentalism.

In any event, the premiers show no sign of being diverted, as they immerse themselves in the everyday problems of ordinary voters. In fact, if not intention, they are piecing together a new Labor identity from the wreckage of Whitlamism. Mercifully, Iemma and co just don’t seem the type to end up dreaming about trees rather than people.

 TNC  16 July 2006                                        Like to respond?                                               Top of page