Introduction

Last year was one of those years that people often say they'd like to forget. For me personally and for the Australian Labor Party there were a couple of massive setbacks - in my case, a dice with cancer. In the Party's case, a loss in one of the ugliest Federal Elections in our nation's history. In both my own case and the Party's, its not terminal.

It's not like the two hunters I read about the other day who went for a weekend in the bush only to have one of them keel over with a heart attack and drop dead. The other hunter dialled "000" and told the operator he thought his companion was dead and asked what he should do.

"First, make sure he's dead," she said. So he told her to hold on and she heard him put down the phone, then she heard his footsteps, a click and a loud bang!

She heard his returning footsteps, the phone being picked up and his voice saying, "ok now what?"

Well I'm here today to tell you that unlike that unfortunate hunter we're not dead yet! We have too much to offer.

The reason I joined the Australian Labor Party was a long tradition of promoting and delivering fairness and justice for average working people and a hand up for those who have fallen behind.

We have always offered a positive, outward-looking vision for our country and the future.

Only a social democratic party of vision could have been bold enough to build great Australian institutions like Medicare, the ABC, free universal and compulsory education, workers compensation, fair electoral systems and the Snowy Mountain Scheme. Only a great social democratic party has the vision and confidence to dream of a Knowledge Nation to ensure our place in the new globalising world. Only an inward-looking Liberal Party could be shortsighted enough to go about destroying these kinds of visions.

Labor's visions and our values are as relevant today as they were over a century ago when Australia's labour movement first mobilised - and are even more so after the divisive impact on Australia of the recent Federal Election campaign.

If anything the recent election brought to a head what has been slowly corroding the Australian ethos.

Where previously we were encouraged to find compassion in another's trouble, where 'a fair go' and mateship were national symbols, now we are encouraged to find fault and blame. We need to remember that callousness is not a virtue.

The type of politics practised by the conservatives pressures Australians to give up the notion of 'a fair go.'

Labor's way forward rests in being able to appeal to the Australian people's hopes and aspirations, not to their fears. To convince them we will stand up for the Australian ethos.

We all know its still there - like the quiet courage of every volunteer fire-fighter, in every Meals on Wheels kitchen and school P&C. It lives on out of the media spotlight and the view from the Government's Cabinet room.

No, Labor and social democracy in Australia are not dead yet but both are struggling.

While Labor is in power in five out of six states, we have now lost three consecutive Federal elections, the last in an environment that was, earlier last year, so conducive to a Labor victory.

In this context, the wide-ranging policy and party review Labor's new Parliamentary leader, Simon Crean, has instituted, is an important first step if we are to rebuild.

As part of this process the clear and concise analysis of why Labor lost the recent Federal Election is a prerequisite for understanding how we win the next one.

Ironically, the narrowness of Labor's loss tends to obscure a number of significant underlying trends that have been with us in the Australian political system since the early nineties.

While I don't for a moment dismiss the growing diversity of the Australian electorate, I do want to focus on two specific groups who were central to the election result.

In doing so I point to the way in which I believe Labor can produce a winning campaign, but just as importantly, a policy program that relates broadly to modern Australia while remaining true to our social democratic tradition.

The 2001 Federal Election

The 2001 Federal Election was a messy, even vicious event and apart from the result, one of the worst things it did for the country was deepen the degree of cynicism and alienation about the utility of politics.

Unhappily this was particularly so for Labor supporters.

There's no point in trying to ignore the widespread feeling across all social groups, all ages and across the city and country, that politics has no relevance for the future.

True, this alienation from politics is common throughout the democratic world.

American Presidents for a long time have been elected by minorities and many of you here tonight will have last year heard the Secretary of the UK Fabian Society, Michael Jacobs, make the salutary point that Tony Blair won the second time around with the support of only 25% of the electorate.

In an environment like this, wedge politics flourishes and in the Federal Election wedge politics in the form of Tampa and the fear of terrorism ultimately determined the outcome.

That is why Pauline Hanson complained that John Howard had stolen her policies.

Pauline Hanson's lipstick was all over John Howard's collar.

Howard used Tampa to pull back some of the 'Battlers' - those predominantly blue collar workers on modest incomes and struggling to make ends meet - who were moving to the Labor Party or considering voting One Nation (particularly in regional areas).

But it is not good enough to delude ourselves that the Tampa fallout was limited to this particular group.

There were many Australians from different groups and ages who were worried about queue jumping, as they saw it, or simply frightened after September 11.

Even before Tampa, the Coalition's second term was characterised by its neglect of the social and working conditions of the 'Battlers' in favour of a remorseless appeal to their deepest fears and prejudices - consistently setting working Australians against the unemployed who were variously painted as dole cheats and job snobs.

Put simply, the Howard Government's aim was to convince the people it was hurting the most to ignore their pain and vote on the basis of their fears.

The Tampa Trap

But little did we realise how ruthlessly John Howard would employ this tactic.

Tampa was what former New York Governor, Mario Cuomo, describes as the ultimate wedge - one designed to distil the bitterest juices of people's anger, bottled as legislation, and offered back as a magical elixir.

This elixir - the Tampa trap - was deployed the moment Labor voted down the first version of the Government's Border Protection Bill. From that point on, Labor faced the prospect of losing up to thirty seats.

We were seen as not standing up for Australia.

When Kim Beazley communicated Labor's tough border protection policy in the Election debate and rammed home our anti-GST and health and education messages we were able to claw back ground.

But John Howard retained enough of the 'Battler' vote in key marginal electorates such as Longman, Hinkler, Herbert, Richmond, Eden Monaro and McEwen to get the Government over the line.

To those who brand the 'Battlers" who regard border security a high priority as racist - I say they are not.

And to those who say Labor could have prevailed if it had opposed the Government's revised border protection bill (legislation we were successful in substantially amending), I would respond politely "you are not in touch with your neighbours."

This much smaller group, a segment who Anne Summers calls the 'Whitlamite Generation', shifted their votes to the minor parties in response to what they saw as an unprincipled stance by the Labor Party, leaving us trapped in a classic wedge.

I want to be clear that without Tampa and September 11, I believe Labor under Kim Beazley would have prevailed in a hard fought campaign.

But we must also acknowledge the fact that before Tampa and September 11 there was a certain loss of impetus in our drive towards victory.

Our private polling in April showed us ahead in the polls, but too much of the swing was being driven by preferences from minor party voters, rather than a groundswell of primary support.

While we were attracting the 'Battlers' angry about the GST we had failed to convince enough of what I would term the outer suburban middle classes.

This is a very diverse group - some are teachers and nurses, some are sub-contractors and small business owners who have done well in life and want their children to do even better. The value of their home is important and they will often have a second investment property. There is a diversity of household incomes within this grouping.

They are the 'Westfield Mallers' because the shopping centre is the hub of their social interaction in the new and emerging suburbs. No longer is the town hall or even the local church the centre of their universe.

Many of them share features in common with the 'Battlers.' There is a lack of tolerance of welfare, a feeling that the Government only provides benefits for the undeserving.

Like the 'Battlers' they want the Government to stand up to vocal minorities, vested interests and champion the view that rewards hard work. This means they are easily aroused by any suggestion of welfare fraud or queue jumping, accurate or not.

They view all levels of Government - federal, state and local - in a negative light - just there to take their taxes without delivering anything tangible to them in return.

Many have private health insurance and private school fees to pay and don't readily see the benefit to them of greater public investment in these areas.

This middle class suburban voter is Labor's great challenge. Its no good thinking they will come along for the ride out of curiosity - they have to be convinced.

Far too many of this grouping stayed with Howard and not just because of Tampa.

Both the 'Battlers' and the 'Westfield Mallers' are what US social policy expert Theda Skocpol calls the 'missing middle' - families who live on modest wages or wages made modest by the cost of their responsibilities to their children.

They work hard but find themselves under financial pressure. They see themselves as struggling in the middle.

Often, in standing up for the weakest and most vulnerable, Labor is wrongly perceived to have neglected both the 'Battlers' and the 'Westfield Mallers' - the 'missing middle.'

So the challenges we face are significant but I am optimistic that if we rise to meet them during the next three years we will regain power. However, we can't afford a slow start.

One of the critiques doing the rounds is that our failure at the election was in part due to our so-called "small target strategy." The perception such a strategy existed arose in part from our inability to communicate our policies.

There were two periods where this was crucial - after the August 2000 National Conference and following Kim Beazley's well-crafted Budget reply speech of May 2001.

On both occasions we lost momentum because we failed to communicate our policy messages to a broad enough audience and all involved, including myself, must bear responsibility for that.

It might make us feel better to blame the media for its short attention span to policy and there's no doubt this is a problem.

But we must improve both our policy formulation process and our communication of those ideas.

One of our real weaknesses was our failure to repeat our core messages. We said things once or twice and moved on assuming the public had digested them. This was not the case and insufficient in the face of the Government's unprecedented and political use of paid advertising to reinforce its own themes.

It is a well-worn adage that you must repeat and repeat your message until you feel if you hear it any more you're going to throw up. Only then will the public have registered the argument you're making.

So Labor's drive for a national reform agenda lost its bite and momentum. In the vote-buying climate that emerged after Ryan the big issues were swamped. In such an environment, policy differentiation between the Government and Labor was much harder to establish.

The way forward

I passionately believe we need to develop a bold, outward-looking, social democratic vision. If we do, I am confident the Australian people will embrace us.

Australians can stand tall and compete with any country in the world

I don't want my kids to grow up in a country that is fearful of the world around them - the sort of country John Howard is creating.

The Liberal's inward looking 'blame someone else' approach thrives in an environment of fear.

It has traction in an environment where there is a sense of malaise about the relevance of politics and pessimism about the prospect of meaningful change.

But people are sick of the "business as usual" approach to politics where politicians pay lip service to the concerns of the people and do what they want.

In my view there are a set of proposals that unite and re-engage the 'missing middle' Labor must connect with.

In the last election I think we failed to offer a broad enough suite of reforms - of our whole system of government, in style and structure. And that's before you get to a discussion about the strengths and weaknesses of our policy positions.

We need a new agenda for political, constitutional, parliamentary and party reform that confronts people's distrust head on.

The first challenge for us is to remind Australians that politics is a democracy and open to everyone, and confers power to everyone. We must also remind them that the Australian Labor Party is on their side.

Constitutional reform

A perfect example of our lack of boldness was our approach to the republican referendum.

Just like the Tampa trap he created, John Howard set a trap on constitutional reform.

People became sick of the long drawn out fizzle of the campaign in which their popular choice - a direct election republican model was sidelined by both John Howard and elite opinion.

Labor came to the Consitutional Convention, as did most others, with a belief that it was genuine forum for debate. Instead, Howard treated the whole thing as a virtual rehearsal for the Tampa game - with rigged debate and a rigged outcome.

He even went so far as to set up a political campaign team that included Tony Abbott and Nick Minchin - dedicated to selling the message "you can't trust politicians."

In my view, we should have been absolutely clear from the beginning we would not participate unless there was a balanced range of alternatives for the electorate to choose from.

The direct election of president ought to have been something that was offered to the people. In confining ourselves to the minimalist option we stuck to the 'business as usual' approach to politics that the cynical and disaffected are absolutely fed up with.

In addition to revisiting the notion of a people's republic there are two other areas where constitutional reform should be considered.

Firstly, we should examine fixed four-year Parliamentary terms.

The 'business as usual' approach to politics suggests we shouldn't even try to convince people of the case for such a change. I think we must begin to be more ambitious for our country.

Secondly, we need to address scientific advances such as gene technology which were never contemplated one hundred years ago yet demand a national policy response. We need to ensure that in such cases the constitution does not hinder Commonwealth action.

Parliamentary reform

There can be no question that the standing of Parliament and Members of Parliament in the community has never been lower than it is today. This should be of concern to both governments and oppositions alike.

But Parliament's accountability to the people is being undermined by excessive partisanship. A 'blue' on the floor of the Parliament can always be relied upon to distract attention from more substantive issues.

I would like to suggest four initial areas for reform, which the Government and the Opposition should agree on - in the interests of democracy and good government.

First, we should strengthen the Standing Orders to make Ministers actually answer the questions they are asked in Parliament. We currently give them unlimited time to say anything but what people want to hear. Time limits should apply.

Second, the Government should use the Parliament as the forum to announce and debate public policy. All too often major policy is announced at a press conference even when the Parliament is in session.

One way to achieve this might be to create a new daily forum within the Parliamentary sitting program where policy announcements are made and scrutinised by the Opposition.

Third, the independence of the Speaker should be increased. There are challenges in moving to the British model given the small number of Members in the House of Representatives, but we should examine the options.

Finally, we need to look again at decisions such the one to ban press photographers from capturing the detail of Parliamentary debate. In the 21st Century, the current restrictions are quite absurd.

Labor's record in Government was not often satisfactory in each of these four areas but three elections later the issue is the future accountability of Parliament to the people, not history.

Rigid Factionalism & Party Reform

We also have to look at party reforms.

Some years ago in an article I co-authored with the late Clem Lloyd on the development of national factions in the ALP and its impact on the party we concluded that:

the top has been strengthened while the base has been weakened, a circumstance as fraught with danger in politics as it is in architecture.

Nothing could be more true.

We should change the rules to make as much of Party activity and election campaigning open to mass participation and that includes getting the rank and file and affiliated trade unionists more involved.

There is a critique around that argues the broader trade union movement have been an impediment to a successful election outcome for Labor.

One of the early features of the Howard Government's third term is Tony Abbott's whipping of Australian trade unions. Like the GST last term, the workplace will be the new battleground for a conservative assault on the living standards of ordinary workers.

A significant number of Australian workers belong to trade unions. These men and women have a right to organise to protect their rights. Where would the workers of Ansett be without the unions? On the street, locked out.

Labor should not back away from its support via unionism for Australian workers and their families.

It is my contention that some aspects of factionalism are a far bigger impediment than any concerns about unions.

While factions are an important management tool, rigid factionalism combined with declining branch membership levels within the Labor Party to my way of thinking presents more challenges for the connectedness of the Party with its grassroots than shuffling numbers on the conference floor.

Rigid factionalism has tended to make the party too inwardly focused - it has bureaucratised and distanced the party from the community.

Too much of the Party's precious talent and energy has been diverted away from electing candidates and into just advancing factional interests.

Any senior member of the Party, me included, who has been involved over time knows how debilitating this can be.

In many of their public actions the factions are not seen to be driven by altruism or ideas, but just number crunching.

Factions are perceived to have hijacked the ideas - intellectual debate and whole areas of what were once fruitful areas of policy discussion are now simply glossed over.

Many in the Party who could have made a contribution, but don't belong to a faction feel they are ignored and so drift away.

With new members joining but quickly drifting away the outcome is as Lloyd and I have noted:

For more profound ideological nourishment, factional members are thrust back on the resources of the traditional ALP which seems to have lost any capability for generating intellectual ferment, at least while the Party is predominant in Australian Government.

Experience has shown that nothing changes in opposition.

I would like to propose three ideas for restoring balance within the Labor Party.

Firstly, in terms of Party reform as others have suggested, why not embrace direct election of some key organisational positions by Party members, like the Party President and the branch component of the National Executive? Secondly, Why not have fixed terms for some of these positions?

To my mind, part of the alienation from politics is the lack of connection between voters and their elected representatives.

In the longer term a third suggestion is to attack this disenchantment by moving to a primary system somewhat akin to that used in the United States but with some unique Australian features. For example if we had a two-tiered primary system, the Party could select a short list of potential candidates and registered Labor supporters could then vote for their preferred representative. Or why not give a weighting in the primary system to Party and trade union members while also allowing registered voters to participate? Such a proposal would require changes to the electoral system and would not be easily achieved.

The Policy Agenda

In a complicated globalising world we need fresh input, fresh ideas and new perspectives.

In England for more than a Century, the Fabian Society has been a crucial source of ideas and policy. Significantly over all these years the Tories have vilified and mocked this sustained effort.

The collapse of the Soviet Union has assisted the broader conservative assault on social democratic ideas. It has suffered from guilt by association. As a consequence, the free market mantra espoused first by Thatcher and Reagan has been given a reprieve.

Australia is no different.

At the core of the differences between Labor and the Coalition is our belief that there is a strong case for Government to buffer market forces.

The government has justified its callous, market-based approach through sustained cuts to government, and the attribution of blame for poverty and disadvantage at the feet of the victims of the new economy and the free market.

People like Tony Abbott do not attack elites or charities like St Vincent de Paul just for sport. It's a calculated agenda to weaken people's faith in the ability of Government and politicians to make a difference.

Like the Fabian's, one of the Labor Party's strengths has been our concern with ideas.

However at present we are in danger of thinking too little, and that is why our policy review chaired by Jenny Macklin is so important.

I believe we need to look beyond the ideological positions that have been staked out in recent times.

This means finding a way to synthesise modern realities with our labour tradition.

Our policy reform agenda needs to build on what we propose on a Parliamentary, Party and Constitutional level.

Our policies must be bold to engage the electorate. Our policies must focus on opportunity and help people to help themselves.

We need greater social investment but also a commitment to economic policies that deliver low interest rates - both ultimately determine what families can afford to put on the dinner table and provide opportunity for their children.

While it is increasingly difficult to formulate policies that meet the needs of the increasingly disparate groups in the electorate we can meet their concerns with a focus on:

• Investment in opportunities;

• Greater reward for effort; and,

• New ways to assist families make transitions.

Investment in opportunities

I believe the unanswered challenge for a reformist social democratic party like Labor is how - in the new economy - to deliver security and opportunity to all.

It is simply not acceptable to me that we have a permanent underclass without hope of work or chances to improve their life.

The fact is too many people live not only in material poverty but also a poverty of opportunity. In this regard the growing gap between rich and poor should be condemned, not denied by Government.

We shouldn't be content with a minimalist welfare system for those who can't keep up rather than helping them move forward.

Nor is it acceptable that middle Australia - the missing middle - receive decreasing value from their tax dollar while they are forced to abandon public health and education.

But Labor's ideas which have relied for so long on the positive power of Government to create opportunities face an electorate filled with cynicism.

It has been said that the so-called aspirational voter is more concerned about what's in it for them. But aspiration is not just about individuals but also about our society. I see our challenge is to convince both the 'Battlers' and the 'Westfield Mallers' that social investments benefit everyone.

An investment in our social infrastructure makes us all the richer, without it we are all the poorer.

The current lack of public investment is giving rise to intractable problems that affect all of us - drugs, crime, and an increasing reliance on welfare, just to name a few.

I want Labor to argue the case for social investment because if that doesn't take place the Australia of a 'fair go' won't exist.

As a first step in providing opportunity we must restore the public's faith in our ailing health and education systems. We need to continue to argue that poor health or sub-standard education makes it almost impossible for people to move forward.

But we must go further than decent schools and hospitals.

Labor needs to argue the case for creating training and educational ladders into jobs and fostering an environment for strong jobs growth.

At the last election Labor put forward a range of well-crafted policies the centerpiece of which were under the banner of the Knowledge Nation. This wasn't just an education and training agenda it was a jobs agenda.

While the selling of Knowledge Nation had its problems we all know in today's world there are ever-diminishing opportunities for people who don't have access to decent education and training opportunities.

As a nation if we want to prosper in the new economy we must continue to argue for the investments in training, education and industry that Knowledge Nation offered.

If we do these things we can confront the Howard Government on the nationalist ground of not standing up for Australia and the idea of 'a fair go'.

Greater reward for effort

Complementary to investing in opportunity is to make sure that people are rewarded for their efforts.

With the GST, low and middle-income earners in this country have had the tax burden shifted decisively to their pockets. The situation is even more acute for low-income families who may in fact be worse off the harder they work due to the withdrawal of family payments, social security and then tax.

For those that call for cuts in the top marginal rate of 47% it is worth keeping in mind that most working families face marginal rates between 60-110%. With this in mind it is about time that we put some decent financial incentives into the system at the bottom and the middle to reward hard work and effort.

Helping families make transitions

Beyond this we must further develop our thinking on the world of work, how it intersects with family life and how we can support communities.

For example, we need to change people's thinking about services and payments for families. We need to show people thinking of having a child what the Government investment is.

This calls for policies that help families when parents leave the workforce to care for children and when they choose to return to the workforce again.

One area where Labor put forward some new ideas at the last election related to the capitalisation of family tax benefits to assist families where a parent had withdrawn from the workforce. The proposal was based on the notion that families can and should have greater control over the resources that are available to them.

Many families feel as though they have a lack of control over their lives and where they are heading. The current system does not help them make transitions that they would like to make.

We need to look at ways that provide financial means to allow a parent to study and upgrade their skills and knowledge to enter a career that has greater prospects for them and their family.

There is also much to do to assist parents as they exit and re-enter the workforce. The Government's current family payment system imposes big financial penalties on mothers if they have a baby or return to the workforce part way through the financial year.

We also need to look at ways to enable parents to save and invest wisely for things like their children's education. Ideas from overseas like Opportunity Accounts where the Government makes an up-front contribution on the birth of a child followed by contributions from parents warrant examination in the Australian context.

Understanding and responding to the work and family nexus is vital to addressing our declining birthrates.

Unless we lay out a pathway through the work and family maze, the number of people opting to start a family will continue to decline.

Conclusion

Labor must now re-build. We must go back to the community.

And this means re-engaging with the people who did not vote for us -the 'missing middle.'

Where the loss of a sense of community is greatest and the dog eat dog notion of everyone for themselves is strongest, politicians who practice divisive wedge politics will prosper.

The only effective way to counter the politics of division is to re-build community trust.

And a broad, well-communicated agenda provides a bulwark against politicians offering division rather than solutions.

For this reason Labor can never be a one issue party.

The Labor Party must say unambiguously that our policies spring from local community. They must spring from and be pitched to families from Townsville to Tuncurry, Penrith to Perth and Brisbane to Bendigo.

Our policies should recognise we all live in a community, not a corporation.

In particular they must be directed to families under financial pressure who are bringing up the next generation of young Australians.

Their needs and aspirations are the same wherever they live.

The crisis in our public health and our public education systems and the increasing conflict between work and family life means they are looking for a government that is on their side and prepared to act in their interests.

They are all people who want a decent, secure standard of living, want to save a bit to get ahead and to educate their kids so they will get good jobs.

In short, they want wherever they live, access to economic and social opportunity.

They want a plan for the future - one that rewards their hard work and sacrifices, one that recognises the tension between work on the one hand and family life on the other.

They need us to acknowledge their alienation from politics and politicians and to respond accordingly.

We must put the family at the centre of political discussion wherever they might live and produce a policy agenda that helps them meet the challenges they face in the twenty-first Century.