Labor locked in a crisis over identity

WITH polls showing a potential election wipe-out, the Labor Party remains in denial about the causes of its malaise. It suffers not just a crisis of leadership but a crisis of identity as a political institution.

On the same day that the Nielsen poll showed a collapsed Labor primary vote at 30 per cent, following the previous Newspoll at 32 per cent, Julia Gillard was locked in a mutual embrace at the Australian Workers Union conference on the Gold Coast.

This symbolism has real meaning. Gillard is more dependent on trade union power than any Labor prime minister since the 1940s. In her keynote speech to AWU delegates, Gillard boasted that she led a party not called a progressive party, not called a moderate party, not even a socialist democratic party - she led a Labor Party whose identity was defined by its trade union ties.

It is a conception of Labor not shared by Kevin Rudd.

With the caucus in abject confusion, the AWU offers conspicuous backing for Gillard. Its national secretary, Paul Howes, declared his determination to keep Gillard in office.

Its former national secretary, Bill Shorten, a pivotal figure in this struggle, declared that Gillard was the "tough leader" for the times.

The union and factional support for Gillard equates to support for the old Labor Party.

Yet that Labor Party is doomed. While the caucus fixates on the Gillard-Rudd popularity contest, the public sees Labor as a party of sectional interests remote from the concerns of ordinary people.

It is impossible to solve this problem in an election year but it is impossible folly to ignore it.

In the current struggle the Labor Party needs Rudd more than Rudd needs the leadership. Rudd knows election victory is close to a forlorn cause.

He can save some seats, perhaps many seats, but any Rudd return must stand for some thing else: the quest to refurbish Labor, reform its structure and change its identity. Rudd must return, if he returns at all, as a leader offering a different government and a different Labor Party.

Much of the ALP will ferociously resist this idea.

But Labor cannot stay blind to its malaise, most obvious in the NSW debacle where union and factional power have proved that bad structure leads to bad policy.

At the federal level, Labor is isolated from business, small traders, regional and aspirational voters.

Sooner or later Labor must confront two epic reforms.

First, it needs to reduce union guaranteed voting power within the party from 50 per cent to no more than 20 per cent to match union coverage in the workforce.

It also needs to empower democracy in the election of the leader whereby the caucus has half the votes and an electoral college of the rank and file has the other half, a proposal advocated by Rudd backer Chris Bowen last year.

In short, the Gillard-Rudd agony is conspicuous for a debate that overlooks the underlying crisis facing the Labor Party.