The Liberal Party in crisis
With few exceptions, Liberal Party federal parliamentary representation is now restricted to regional and rural seats removed from the centres of political and financial power it once dominated.
For the Liberals to lose their traditional blue-ribbon seats in wealthy areas of Sydney and Melbourne in two successive elections is significant not just because of the loss of votes on the floor of the House but also because of the role these electorates have traditionally played in the internal life of the party.
Branches in these electorates have a long history of training activists and leaders, making connections with business executives and senior state functionaries, fostering relationships with deep-pocketed donors and contributing to the party’s image a meeting place for the country’s elites.
The Liberal Party has historically been the preferred party of the capitalists, who have been important financial contributors and at times run serious campaigns on its behalf. Currently, though, the capitalists and their representatives are despairing of the Liberals.
In part, that’s because the Liberals have now lost two federal elections and could be out of power until the 2030s. But it’s also because, through his attempt to create a right-wing populist constituency, former leader Peter Dutton advocated a shift away from the “free-market” policies beloved by business.
Dutton’s nuclear power program would have cost hundreds of billions of dollars of public funds, a white elephant in the eyes of capitalists who can access much cheaper sources of energy and who were happy to let private investors decide if nuclear power had a future in Australia.
Dutton’s pitch to regulate or even break up supermarkets, insurance companies and Bunnings and to introduce a gas reservation policy appalled the likes of the Business Council as outrageous infringements on big capitalists.
Dutton backed away from his initial commitment to press ahead with the original highly regressive stage three income tax cuts if he won office and very soon learned to love what he initially called Labor’s “cost-of-living sugar hits”.
This was a far cry from 2014, when Tony Abbott and Treasurer Joe Hockey delivered a budget written by Business Council of Australia, which threatened a wholesale attack on social welfare and a huge redistribution of income to business and the rich.
Since the defeat of the 2014 budget, coming on top of the defeat of the Howard government’s anti-worker WorkChoices industrial relations laws, the Liberals have not been game to try such a full-frontal offensive against the working class again.
For this, they have been slammed by pro-business partisans and capitalists. During and after the election, business mouthpiece the Australian Financial Review ran a string of comment pieces blasting the Liberals for running economic policies that were “Labor Lite”, “defied basic liberal economic principles” and were a “mix of economic populism and socialism” that “bowed to an insidious entitlement culture”.
The Financial Review’s attacks are echoed by the Business Council and the Australian Chamber of Commerce and Industry. They want a fresh wave of “economic reform” involving income and corporate tax cuts, “workplace reform” (i.e. reductions to minimum wages, awards and worker protections), public asset sell-offs, a reduction in “reckless” public spending on things that benefit workers and the poor and the winding back of industry regulations.
The goal, these business lobbyists say, is to increase “productivity”. What that means in practice is fewer restrictions on the capitalists’ ability to rip off the working class, fatten their profit margins and improve their ability to undercut competitors.
Yet, presumably, one of the reasons that the capitalists have complained but not intervened to discipline their party is because they have generally done well financially under governments of all stripes. The profits share of national income has increased decade after decade, the economy has expanded almost uninterruptedly since the early 1990s, Labor has governed in the capitalists’ interests and, thanks to the trade union leaders, strikes have been at historic lows. So the bosses have not needed special laws to screw the working class; they have just been getting on and doing it in the absence of much resistance.
Business may have tolerated the Liberals’ failure to mount a more aggressive attack on workers and to preside over a new wave of pro-capitalist “reform”, but they don’t like it. The Australian economy may have steadily expanded, but in recent times, growth has tanked and relied entirely on immigration. Capital investment is low, public debt is rising, even if it is lower than elsewhere, and “productivity” is stagnant. These are all alarm signals for the capitalists—and they want a party that can tackle these head on, at the expense of the working class.
Since the Liberals lost the election, the bosses must, perforce, lobby the Albanese government to squeeze the working class and cut taxes on business and the well-off. We cannot trust the ALP to resist these demands,
While Labor rules for the rich, the capitalists are never satisfied. They want a government run by their own people to rule the country in their interests; they want their party back. Similarly, we need a party to fight for our interests.
