Country Report Australia October 1996 Main report

Political scene: Pre-budget disturbances harm Labor--

The Australian Council of Trade Unions (ACTU) organised a pre-budget rally at the federal parliament to protest against the government's proposed industrial relations laws. A small band of protesters, including some union officials, broke away from the main group of around 25,000 and stormed Parliament House, causing considerable damage and injuring a number of police. The actions of this small group have proved to be a public relations disaster for the ACTU and, to a lesser extent, for the Labor Party. Matters were made worse when the secretary of the ACTU, Bill Kelty, described the rally as a success and only later condemned the violence.

Both the violence and the ACTU's subsequent handling of the matter have generated considerable bitterness within the Labor Party towards the ACTU. The protest also undermined Labor's attempts to make political capital from the budget.

--which remains in policy limbo--

Research undertaken by the Labor Party has indicated that its current policy of tightly targeted welfare payments to disadvantaged groups played an important role in its election loss earlier this year. In particular, the lower income earners which form Labor's traditional support base appeared to take the view that social welfare payments were being directed to "less worthy" groups (such as Aborigines and single mothers). There was also widespread disenchantment among Labor supporters over what they viewed as the party's growing "political correctness".

These research results present Labor with a policy dilemma: if the party retains its current position on welfare, multicultural issues and Aboriginal affairs, it stands to continue losing ground with lower income earners; if it steps back from these policies it may well lose its middle- class support, along with that of the "less worthy". One way out would be for Labor to portray "less worthy" groups as victims of an increasingly heartless labour marketplace, and so tap into many Australians' fears about employment insecurity, long working hours and the trend towards casual labour. But Labor policies on reversing such trends will be difficult to formulate, and even more so to implement, when back in power.

--and suffers from a senator's defection

A Queensland senator, Mat Colston, resigned from the Labor Party on August 20 and now sits in the upper house as an independent. His move was sparked by Labor's decision to pass him over as its candidate for deputy president of the Senate (a post traditionally held by the main opposition party). Upon his resignation, Mr Colston was voted into the deputy presidency as an independent. His resignation is expected to make it considerably easier for the federal government to push legislation through the Senate as they will now only need the support of Mr Colston and the other independent senator, Brian Harradine (from Tasmania). The importance of securing Democrat support for legislation will be commensurately reduced.

The two independent senators have given some idea of their voting intentions. Mr Colston has indicated that he has an open mind on the proposed partial privatisation of the telecommunications firm, Telstra. Both Mr Colston and Mr Harradine are believed to have reservations about the federal government's industrial relations bill. However, their support is unlikely to be needed on this issue, as there are strong indications that an amended industrial relations bill will receive Democrat support (see Economic policy).

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
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