AUSTRALIA S LABOR PARTY: IMPLICATIONS OF AN ELECTION VICTORY

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• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05151172
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• Document Creation Date: March 9, 2023
• Document Release Date: September 3, 2021
• Case Number: F-2021-02249
• Publication Date: February 1, 1983

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Directorate of
Intelligence
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Australia's Labor Party:
Implications of an
Election Victory
An Intelligence Assessment
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EA 83-10030
February 1983
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Directorate of
Intelligence
Australia's Labor Party:
Implications of an
Election Victory
An Intelligence Assessment
This paper has been prepared by
Office of East Asian Analysis. Comments and queries
are welcome and may be addressed to the Chief,
Southeast Asia Division, 0EA,
This paper has been coordinated with the
Directorate of Operations and the National
Intelligence Council
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EA 83-10030
February 1983
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Key Judgments
Information available
as of 8 February 1983
was used in this report.
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Australia's Labor Party:
Implications of an
Election Victory
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We believe that if Labor wins the national elections scheduled for 5 March,
a government headed by Bob Hawke would not result in a major
realignment of bilateral cooperation in security and defense. The Labor
Party has adopted a moderate platform on these issues, which includes
support for the ANZUS treaty and the US-Australian alliance. Bilateral
security relations would suffer only if the still radical left wing were able to
increase its influence over the leadership�a remote possibility given
Hawke's potential as a strong leader of the party and his moderate views.
Concern that a Labor government under Hawke would be a repeat of the
1972-75 Gough Whitlam government is, we believe, unfounded.
Nevertheless, in our judgment a Labor government could create some
nettlesome problems, particularly if Hawke felt he had to closely follow the
party's policy. According to this policy, Labor wants:
� The United States to break precedent and inform Canberra of the
presence of nuclear weapons on US aircraft operating through Australia.
� To obtain veto power over any first-strike order sent by the United States
through the North West Cape naval communications facility.
In addition, Australia's policy on fOreign investment would probably
become more nationalistic under a Labor government, causing problems
for foreign firms seeking to invest in resource development.
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Australia's Labor Party:
Implications of n
Election Victory
The Current Picture
Prime Minister Malcolm Fraser, whose Liberal-
National Party coalition lags behind the Australian
Labor Party (ALP) in public opinion polls by a small
margin, surprised political observers on 3 February
with his call for early general elections, now set for
5 March. Immediately after Fraser's announcement,
Labor Party leader Bill Hayden announced he would
step down. At a subsequent caucus of the ALP on
8 February, Hayden's party-rival Bob Hawke was
elected new party leader.
Although Labor remains threatened by internal dis-
putes and a poor public image, Fraser's considerable
political problems have opened the way for a Labor
victory according to the Australian press.' A public
opinion poll conducted in early February showed the
ALP would have won if an election were held at that
time. In fact, support among the electorate for Labor
is now at the same level as it was in 1972 when Gough
Whitlam and the Labor Party took control of the
national government.
We believe at this point that the election will be
extremely close. Although Labor is a minority party,
recent polls show Hawke is Australia's most popular
politician. As for the Liberals, the Fraser govern-
ment's competency is being questioned, particularly in
economic affairs; Australia has 11 percent annual
inflation and a 9- to 10-percent unemployment rate.
Labor's Emerging New Look
Traditionally the national political party of aggressive
and often militant trade union members, Labor has
gradually expanded its electoral base over the past 15
years and now represents a wider constituency with
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Figure 1
Morgan Gallup Polls of Australia
Question: Which party
would receive your first
preference if a federal
election was held today?
Labor Party
Liberal-National Party
Coalition
Percent
55
30
I
c
Ili] i III i
Cal to a >
SOOO 2 2
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588701 2-83
more divergent ideological convictions and "bread and
butter concerns."2 Hawke's election to lead the ALP
confirms the party's swing to more moderate politics.
A recent reshuffling of the Labor shadow cabinet,
highlighted by Paul Keating's promotion to the im-
portant Treasury portfolio in January, was another
Today's Labor Party has the support of approximately 26 percent
of the middle class and 60 percent of the working class, as identified
by occupation, according to Australian statisticians. Its working
class constituency is primarily urban (two-thirds of the urban
working class as opposed to only one-half of the rural working
class), and almost totally excludes Australia's farmers and ranch-
ers, who are notably anti-Labor.
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Paul Keating. At 39. Keating has been a nember of the Australian
Parliament .1Or 14 years. A rightwing leader recognized for his
imaginative policymaking and organizational abilities, Keating led
his New South Wales. Centre Unity faction in support of Hawke 's
leadership challenge despite criticism from the party's left wing. A
)rmidable debator, Keating is considered a -comer- within the
party and is tipped by many as future leader of the ALP.
attempt by Labor leaders to project a strong, confi-
dent, and moderate image in economic affairs, which
both Fraser and the ALP are making the principal
issue in the campaign.
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At the same time, leftwing influence is on the wane.
With only 20 to 25 members of the 79-member ALP
caucus, the left no longer enjoys the influence it had
during the Whitt= era. Not one of the leftwing
amendments was adopted in its original state at the
party convention last July. The left wing, for example,
had pressed for an amendment that would have
deleted the platform plank supporting the ANZUS
alliance. The left does, however, still wield some clout
since it has a high media profile and good trade
union connections.
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Bob Hawke. The son of a Congregational minister. 52-year-old
Hawke is Australia's best known and most popular Labor Party
and trade union figure. Having earned LL. B. and B.A. (economics)
degrees in Australia, he went on to attend Oxford University under
a Rhodes scholarship from 1953-55. Although unsuccessful in last
July's leadership hid to replace Hayden, Hawke was elected ALP
leader in February 1983, following the resignation of party leader
Bill Hayden.
Hawke at the Helm
Bob Hawke, in our judgment, will be an important
man on the Australian political scene irrespective of
how Labor fares in the March election. Hawke's high
standing in Labor politics and rapid rise to party
leadership is an outgrowth of his experience as presi-
dent of both the Australian Council of Trade Unions
(ACTU) from 1969-80 and federal president (titular
head) of the Australian Labor Party from 1973-78.
During these years he developed the important negoti-
ating skills and political acumen that have brought
him the respect and admiration of many Australians.
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Leftwing Policy
In recent months the left wing has been particularly
unsuccessful in its attempts to sell its policies to the
party, and in our judgment, this trend would continue
in the event of a Labor government led by Hawke.
Not one of the leftwing amendments was adopted in
its original state during the party's convention last
July. According to the US Embassy, the left argues
that the United States is not a reliable ally and that
ANZUS offers no real protection to Australia. In
place of the alliance, the left wing wants a nonaligned
policy, which it believes will eliminate Australia's
"subservience to the United States."
(b)(3) The left wing also supports an amendment calling for
the phasing out of all existing US-shared defense,
communications, and tracking facilities and opposing
the establishment of any new ones. According to the
US Embassy, the left wing maintains joint facilities
contribute to the nuclear arms race, make Australia
a nuclear target, and commit the nation to what it
calls Washington's dangerous nuclear war fighting
strategies.
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In economic policy, the left wing opposes the moder-
ates' retreat from the party's previously proposed
capital gains tax and the prohibition on uranium
mining and development. According to the US Em-
bassy, party leaders are not willing to go along with
either proposal because they believe these unpopular
stands may have cost them the last national election
in 1980. Moderate party members cite the capital
gains tax and uranium issue as examples of the left
wing's stubborn support of policy regardless of wheth-
er it provides the opposition Liberal Party with potent
political ammunition.
Female delegates in the left wing also support the (b)(3)
highly controversial effort to abandon the "conscience
vote" on abortion, pressing for a policy binding
members of Parliament to support liberalization of
the abortion law regardless of their personal convic-
tions. This is an extremely volatile issue in Labor
politics, according to the US Embassy and the Aus-
tralian press, who believe that abandonment of the
"conscience vote" would cause many members to
leave the party.
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Hawke's record in Labor politics places him to the
right of Bill Hayden, according to political observers
in Australia. The Australian press has called Bob
Hawke a "corporatist," referring to his reputation as
a pragmatic and conciliatory politician. Hawke has
often positioned himself in opposition to the party's
left wing, a fact credited by the Australian press as
the source of the considerable hostility he suffered
during last year's national party convention. At that
time, the left wing's unanimous support of Hayden
cost Hawke his bid for party leadership in a close 42
to 37 vote.
Hawke's main political strength rests in his popular
appeal to the voters.
Hawke's popularity stems,
in large measure, from the public's perception that he
represents national unity, that he is a man of princi-
ple, and that he is not overly entrenched in the pro
forma antagonisms of Australian politics.
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The "most popular man" in Australian politics has
detractors, however, including many in his own party.
According to Australian press reports, many view
Hawke as a self-serving glory seeker whose duty to
the party is too often clouded by overwhelming per-
sonal ambition. For this reason, rumors reported in
the Australian press several weeks before Hayden's
resignation that Hawke might make another chal-
lenge to the Labor leadership before the calling of
national elections caused considerable consternation
within ALP ranks. Fellow party members denounced
such action to the press as opportunistic and unac-
ceptable. Hayden's consistently uninspiring preelec-
tion performance apparently convinced Labor leaders
of the necessity for change, however.
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Bill Hayden: A Political Postmortem
Before he stepped down as party leader in early
February (and was reappointed shadow Minister for
Foreign Affairs), Bill Hayden had been the head of
the Labor Party since 1977. Hayden is fundamentally
a moderate Labor politician. Although he occasional-
ly adopted an aggressive and leftist tone in public
statements, we believe this was primarily a tactic to
consolidate support within the party and, more re-
cently, part of the political posturing that typically
precedes Australian elections. Hayden, according to
the US Embassy, believed Labor would have to
present a clear-cut choice to the electorate; Hayden
said that to win in 1983 the ALP must offer "a
choice, not an echo."
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Hayden benefited and suffered from his reputation as
Labor's competent�if uninspiring�leader. Although
effective in parliamentary debate, respected for his
policy analysis, and generally credited by domestic
political observers with establishing the Labor Party
as a moderate alternative to the Liberal�National
Party coalition, his lackluster style tended to project
uncertainty and attract challenge. According to crit-
ics in the ALP, Hayden was the weak link in present-
ing party policy to the electorate.
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What Labor Stands for Today
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The ALP platform adopted at the party's 35th Na-
tional Conference last July provides the backbone for
the party's election campaigning. In terms of Labor's
past, the platform presents a moderate approach for
dealing with Australia's pressing economic and politi-
cal issues.
According to Australian press reports, the party plat-
form strikes an ideological balance that has pleased
all but the ALP's most radical leftwing elements.
Perhaps most important, the party has unified itself
behind the platform, which Labor expects to have
broad electoral appeal. As is the case with most party
platforms, we would not expect the ALP to achieve all
of its goals if elected. Although we expect Hawke to
stand behind the platform, we also look for him to
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reassess potential troublespots in the platform
planks�particularly economic issues�in an effort to
present more clearly defined policies to the electorate.
Foreign Affairs and Defense Policy
The ALP's key theme on foreign and defense policy is
Australia's need to pursue its own national interests
through more independent policymaking. ALP mem-
bers argue that Australia has fallen into the trap of
blindly following the US lead and has lost, or risks
losing, control over its foreign affairs. This suggests
that a Labor government would try to project an
image of Australia as a more active and ideologically
independent participant in world affairs, a stance that
would affect some aspects of the US-Australian alli-
ance.
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The ALP: Selected Shadow Ministers
Prime Minister, Industrial Relations Bob Hawke
Popular former President of ACTU and ALP Na-
tional Executive.
Foreign Affairs Bill Hayden
Party leader from 1977 to February 1983 and former
shadow Minister for Defense.
Communications John Button
Senator from Victoria since 1974, an attorney and
member of the ALP National Executive since 1977.
Attorney-General Gareth Evans
Senator from Victoria since 1978, served as shadow
Attorney-General since 1980, is an attorney and
former professor of law.
Treasury Paul Keating
Representative from New South Wales since 1969
and leader of the state's conservative Centre-Unity
faction.
Economic Development Ralph Willis
Representative from Victoria since 1972, formerly
involved in ACTU labor organization.
Resources and Energy Peter Walsh
Senator from western Australia since 1974, a former
farmer and shadow Minister for Economic
Development.
Defense Gordon Scholes
Representative from Victoria, formerly shadow Min-
ister for Primary Industry.
Finance and Trade Stewart West
Representative from New South Wales, recent shad-
ow Minister for Environment and Conservation;
former dockworker.
Industry and Commerce John Dawkins
Representative from western Australia, degree in
economics, former shadow Minister of Education.
Science and Technology Barry Jones
Representative from Victoria since 1979.
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According to the party platform, Labor would contin-
ue its strong support of the ANZUS alliance. The
ALP would depart from the Fraser government poli-
cy, however, by assuming a more activist role in
promoting arms control and disarmament and by
advocating a southern hemisphere nuclear-free zone.
Like the Fraser government, Labor supports efforts to
� develop Australia's role as a "middle power" in
Southeast Asia. Correspondingly, the platform recom-
mends a rise in the level of foreign aid for less
� developed nations, pledging an increase in develop-
ment assistance to 0.5 percent of the GNP by 1985,
with an eventual target of 1 percent. It also recom-
mends a greater role for Australia in mediating
between Vietnam, the United States, and its neigh-
bors in Southeast Asia.
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Economic Policy
Labor's economic plan looks to a "Keynesian prescrip-
tion" for revitalizing the Australian economy. As an
answer to the country's worsening economy, the plat-
form includes the following proposals intended to
stimulate economic growth and ease unemployment:
� Ease pressures on interest rates by devaluating the
currency by 5 percent and increasing overseas bor-
rowing to maintain adequate foreign exchange
reserves.
� Increase spending on infrastructure such as roads
and bridges.
� In cooperation with unions, institute an economy-
wide wage/price incomes policy.
� Enact tax cuts to supplement "declining family
living standards."
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� Increase the stock of public housing available for
renting through a $170 million program.
Additional Labor Party proposals include the "Emer-
gency Rescue Operation" and the "Hayden Housing
Plan." Both proposals call for increasing government
expenditures on salaries and social programs and
subsidizing low-interest loans.
(b)(3) The platform is more moderate than those in the past
on some key positions, including the categoric antiur-
anium stance and the push for a capital gains tax. The
platform now allows for the gradual phasing out of
the uranium industry over a number of years. This
presumably would permit honoring existing contracts
while prohibiting the establishment of uranium en-
richment facilities as well as any nuclear power
plants. According to the US Embassy, support for this
modified stand comes from all key ALP leaders, who
are responding to public opinion polls that show
popular support for the domestic uranium industry.
Hawke, in fact, is cited by the press as one of the
principal proponents of uranium mining.
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Labor's natural resource policy advocates greater
government control of the resource sector. According
to ALP policy papers, this would result in closer
monitoring of multinationals involved in mineral ex-
traction and marketing. We believe that Labor's
program for resource development�apart from urani-
um�is the sharpest departure from the moderate
tone of the overall party platform and that, if imple-
mented, would cause major concern among Austra-
lia's foreign investors. A recent ALP policy paper lists
some of the changes that might result in resource
development and marketing following a Labor
victory:
� Export controls will be introduced.
� The government will assume responsibility for coor-
dinating export efforts of private companies, includ-
ing active intervention in negotiating prices.
� Australian interest in ownership and control of all
extraction and processing projects, officially set at a
minimum 51 percent but rarely enforced, will be
strictly enforced.
� Profitable resource ventures will be charged a re-
source rent tax.
� Greater environmental controls will be enforced.
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Labor also has addressed the future of the economy in
its statement on science and technology, delivered by
shadow Science and Technology Minister Barry
Jones. According to Jones, a future Labor government
will focus on revitalizing Australian industry by iden-
tifying 16 "sunrise" industries for ALP aid and
promotion. According to Jones, the ALP is concerned
that the country's industrial base will continue to
erode and that workers' skills will decline without a
strong policy encouraging development of high-tech-
nology industries. The ALP argues that Australia's
technological base has remained virtually unchanged
since the 1950s, compared with countries such ag
Japan, Singapore, and Sweden. Although the ALP
acknowledges that the promotion of high-technology
industries will not generate much employment, it
hopes they will improve Australia's ability to compete
in export markets and provide a major source of tax
revenue.
Looking Ahead
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Building Bridges at Home . . .
Hawke's immediate challenge is to consolidate his
control over the factionalized Labor Party and estab-
lish his leadership in the eyes of the Australian
electorate, all in the few weeks remaining before the
election. He is already off to a good start. According
to the Australian press, Hawke has convinced the
ACTU to call off a strike against the oil industry; in
press statements, ACTU leaders have said they are
stopping the strike because Labor's first priority must
be to elect Hawke and the ALP. Union leaders
recognize that Fraser would use any strike as a
campaign issue.
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In the next few weeks, we expect Hawke probably will
step up Labor's efforts to reassure the electorate
about the party's moderate position on major issues.
Because the domestic economy is a pivotal election
issue, Labor has been sensitive to reactions by the
business community. Although business remains justi-
fiably anxious about Labor Party factionalism and
proposed economic policies, the domestic press reports
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The Whitlam Years and US Concerns
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Strained relations between the United States and the
Labor Party began to surface in the early 1970s,
when Labor was led by Gough Whitlam, Australia's
first Labor Prime Minister in over 23 years. During
his term of office (1972-75) many analysts feared that
Labor's foreign policy might serve some Soviet inter-
ests. This, in turn, raised concern that military and
strategic data shared with Australia would be rou-
tinely compromised.
According to one scholar, a major focal point of
concern for Americans and conservative Australians
was Whitlam's heir apparent and Deputy Prime
Minister, James Cairns. Whitlam's political reputa-
tion was adversely affected by Cairns and the leftwing
proposals he espoused, which seemed purposely in-
tended to counter US interests. Cairns was the most
vocal advocate of policies that endorsed the with-
drawal of Australian troops from Southeast Asia; the
official recognition of Cuba, North Korea, the Ger-
man Democratic Republic, and the Palestine Libera-
tion Organization; and the revocation of strategic
controls on trade with the USSR, China, and East
European countries.
A spokesman for the left wing further ignited fears
about Whitlam, Cairns, and the Labor government
when, in 1973, he said confidently, "We are looking
forward to the possibility this year that the ALP
Federal Conference will jettison the American alli-
ance and other overseas commitments and join the
third world." According to Australian press reports
at the time, perceptions of Australia changed, both at
home and abroad. In the eyes of many, the Labor
Party was out of control, the country was without
direction, and Whitlam was faltering at the helm.
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Domestic and foreign political observers generally
agree that Whitlam's time in office ushered in a new
era in US-Australian relations, characterized by
greater Austrailian nationalism. However, this
caused no irreparable harm to the US-Australian
alliance.
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Despite allegations of possible US involvment in the
Labor government's demise in November 1975, most
political observers in Australia agree that Whitlam's
fall was not so much a result of problems arising
from foreign policy but more because of mismanage-
ment and economic troubles at home. During his
three years as Prime Minister, Whitlam instituted a
wide array of social and economic reforms, but to a
large extent it was the government's inability to cope
with inflation and unemployment that brought Labor
down. Falling commodity prices, 15 percent inflation
in 1975, and rising energy costs hurt Whitlam's
government. Its economic failures were especially
damaging because Labor's victory in 1972 had been
achieved in part because of its ability to attract
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business leaders to the promise of responsible and
effective fiscal management. Moreover, the ALP had
come to power promising tranquil industrial rela-
tions, which turned out not to be the case.
an obvious "thawing" of the traditionally cool rela-
tionship. Representatives of the business community
are quoted in the press as saying that the Liberal
Party has lost considerable credibility with its tradi-
tional base because of its poor management of the
economy. Labor, in turn, has been working hard to
create an atmosphere of mutual understanding be-
tween the party and the business community. As early
as mid-1982, members of the ALP shadow cabinet
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began meeting with business leaders in an effort to
explain party policy and allay fears about Labor's
competency in economic affairs.
Hawke's new position as ALP leader should help this
effort because, according to the domestic press, he is
recognized as a leading advocate of involving busi-
ness, as well as unions, in government policymaking.
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Press reports indicate that Labor is satisfied with
overtures made by business, which included sending a
record number of observers to the 1982 National
Party conference. According to the press, party mem-
bers realize that Labor is not the first choice of
business leaders, but they are encouraged by the fact
the ALP is considered a strong contender, and that
business does not rule out a working partnership
should Labor win the election.
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Labor has been equally concerned about providing
assurances to US Government officials about its
policies, especially regarding sensitive bilateral de-
fense issues. We believe that Hawke, while prepared
to challenge the United States when necessary, is
committed to supporting the United States on many
key policies. In the past, he has been quoted as saying
that his personal attitude on foreign policy questions
is very close to that of the United States.' For
example, he aligns himself with the United States in
policy matters concerning Israel and the USSR�
stands that have cost him support in the party's left
wing.
According to the US Embassy, Hawke supports the
general outline for a Labor government's foreign
policy that was presented by Hayden to senior US
officials several months ago. Like Hayden, Hawke
recognizes the importance of the joint facilities in
protecting Australia's national security. According to
the Embassy, Hawke is less concerned than Hayden
that the North West Cape joint naval communica-
tions facility compromises Australia's sovereignty or
would involve the country in "hostilities" without its
consent. We believe Hawke is also less worried than
Hayden about the B-52 agreement, which allows
these aircraft to stage through Darwin and also
exercise in Australia.
' In a television interview on the day he was named Labor Party
leader, Hawke reaffirmed his support for the US-Australian alli-
ance saying he is committed to the relationship, feels welcome in
the United States, and looks forward to working with Secretary of
State Shultz to strengthen the alliance.
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On some matters, a Labor government led by Hawke
could prove difficult for US interests, however. He is
not likely to challenge the ALP's popular proposal for
a southern hemisphere nuclear-free zone and might
pursue Hayden's resevations about the United States
policy to neither confirm nor to deny the presence of
nuclear weapons on US aircraft in Australia. Conse-
quently, Hawke might seek to renegotiate the agree-
ment under which US B-52s stage through Darwin.
ALP former shadow Minister for Foreign Affairs
Bowen has told US officials that the ALP's nuclear-
free policies relate only to the firing and storage of
weapons, however, and would not affect the move-
ment of US naval ships in the area. Since becoming
party leader, Hawke has acknowledgedthe ALP plat-
form plank rejecting further Australian participation
in the Sinai multinational peacekeeping force. How-
ever, he has said he would like to discuss the issue
with the Egyptian and Israeli governments and would
not precipitately withdraw Australian troops from the
force. Hawke has yet to discuss publicly the plank
that calls for veto power over any nuclear first-strike
order sent by the United States through the North
West Cape naval communications facility. On bal-
ance, however, we would expect the bilateral relation-
ship to remain essentially intact and relatively cooper-
ative.
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