anthony albanese labor
Labor leader Anthony Albanese (Image: AAP/Mick Tsikas)

The traditional narrative about the economic reforms of the 1980s goes something like this: Australia had locked itself into an unsustainable, protectionist mindset dedicated to propping up dying industries like manufacturing that imposed high costs on consumers, diverted investment away from more efficient and productive uses, and condemned Australia to growing impoverishment in an increasingly competitive world.

The Hawke-Keating government cut back protectionism, opened the economy up, deregulated key industries like finance, and pursued a free trade agenda that set Australia up for three decades of uninterrupted economic growth — but at the price of a huge loss of jobs in manufacturing, especially after the early 1990s recession. And it did it by working in cooperation with the union movement.

You’ll find little disagreement with that basic description of events, other than around the edges, from anyone who’s not on the far left or far right. Even the Coalition backs that narrative — though it likes to add in the lie that it supported the reforms, when in fact it bitterly opposed many of the key reforms, and to this day is trying to undo them (think superannuation).

Thirty years later, Australia faces a similar reform challenge — only this time the institutional forces involved are very different.

Australia has locked itself into an unsustainable, protectionist mindset dedicated to propping up a dying industry — fossil fuels — that imposes high costs on consumers, diverts investment away from more efficient and productive uses, and condemns us to growing impoverishment in a highly competitive world.

Each of these statements is demonstrably true. Fossil fuels are dying — ask the premier international fossil fuel body, the International Energy Agency (IEA). According to its current outlook, even without a global commitment to net zero by 2050 and purely on current policy settings, coal-fired and natural gas-fired power will fall dramatically by 2040, because solar PV is “now the cheapest source of electricity in history”.

According to the IEA’s pathway to net zero by 2050, coal and gas would fall by one-third as an electricity source by 2030 alone, and fall by half again by 2040 — and that’s assuming an absurdly high take-up of discredited Carbon Capture and Storage.

Fossil fuels will impose higher costs on consumers — the cost of new coal-fired power plants is already so high that even climate denialists and coal fetishists such as Scott Morrison and Angus Taylor are reluctant to countenance building one; the proposed Kurri Kurri gas-fired plant will not, according to experts, lower prices for consumers but instead “displace some private sector investments; disrupt emerging market and technological solutions; and expose taxpayers to risks in a market that governments (sensibly) have moved out of over the past 25 years”.

Fossil fuels also impose costs on the entire community through greenhouse emissions and, in the case of coal, the deaths and illness of hundreds of Australians from the toxic particulate pollution they produce. Coal-fired power stations and coal mining companies do not have to bear these external costs, a form of indirect subsidy from the rest of the community that makes them more competitive compared to counterparts elsewhere that have to pay for their external costs.

The IEA also points out in its 2050 road map that investment in renewables will generate an additional net 25 million jobs globally by 2030 and add 0.4 of a percentage point a year to annual global GDP growth. Renewable energy investment will be a significant net generator of employment, especially in regional areas.

As with the case for abandoning manufacturing protectionism in the 1980s, the case for abandoning fossil fuel protectionism is economically unassailable. The decisions of the Hawke-Keating government to undertake those reforms have been more than vindicated in the decades since. But the environment for reform now is very different.

One difference is that the unions are now actively opposed to the reform process. Both the mining division of the CFMMEU and the right-wing Australian Workers’ Union are opposed to ending fossil fuel protectionism and support propping up these dying industries, lobbying the ALP hard to oppose action. Both unions are also significant donors to the Labor Party as well as controlling substantial blocs of votes within the party.

Major fossil fuel companies such as Santos, Woodside, Origin and Hancock Coal are also substantial Labor donors, and often employ former Labor MPs or Labor staffers.

There’s also limited support from the mainstream business community for reform — major institutional representatives like the Business Council and the mining industry ostensibly support the principle of economic reform, but oppose the detail of any reform proposed by Labor.

Another difference is that the Coalition remains irremediably opposed to reform, and remains committed to propping up dying industries and adding to existing protectionism with more taxpayer-funded fossil fuel projects. There isn’t even the facade of support that the Coalition offered the Hawke-Keating governments in relation to reform.

Since 2007, the Coalition has abandoned first a market-based solution to the transition from fossil fuels, then any active role for government of any kind, then embraced active support for fossil fuel industries.

Further, crucially, there’s no media or commentariat support for reform — in fact, there is relentless opposition. If the larger and more dominant media industry of the 1980s gave support — at times, uncritical and unquestioning — to economic reforms and acknowledged the skill with which Hawke and Keating pursued reforms ostensibly hostile to their own base, that has now been replaced by a culture war in which not merely is protectionism backed as economically sound, but any reform efforts are portrayed as a betrayal of Labor’s working-class roots.

The equivalent would have been The Australian campaigning against Labor in the 1980s for betraying manufacturing workers and selling out the working class by ending protectionism — all in the name of some inner-city, elite fixation with “market economics” — while running op-eds from Business Council executives attacking John Button’s rationalisation of the car industry and from disgruntled left-wing Labor MPs about how the party would become unelectable if it didn’t reconnect with its working class base and prop up manufacturing.

Some might also argue that the current generation of Labor leadership is a pale imitation of Hawke and Keating. Certainly, no one in the parliamentary ALP now has the communication abilities of Keating, or the charisma and public reputation of Hawke. But that argument risks receding into dewy-eyed nostalgia for the ’80s, and ignores the reality that policy articulacy and communication was very different back then — a unified, limited mainstream media controlling all forms of communication, versus a deeply fragmented media space and dying mainstream media business model now.

And the biggest difference of all, one apparently overlooked by the media, is that Labor is in opposition, not government. It is the actions of the Coalition that are exacerbating Australia’s already dangerous over-reliance on fossil fuels.

The reason few people examine Labor’s current problem around renewables versus fossil fuels as an economic reform issue is that the framing that applied in the 1980s around reform has been comprehensively abandoned — indeed, turned inside-out. The economic reform in question is now framed as the culture war of “climate change”.

Newspapers and commentators that once cheered Labor on for recognising the need for economic reform in the face of an unwilling labour force and union movement now accuse Labor of betrayal for doing the same. Even outlets that ostensibly support reform are highly selective. The Financial Review is happy to exhume John Hyde to attack the Coalition’s big government fiscal policy, but also happy to play up Labor’s divisions over fossil fuel subsidies.

Labor’s internal ructions over whether to continue propping up a dying industry or pursue the reforms necessitated by the needs of a competitive economy are a legitimate topic of political journalism. The challenges for Labor are real, and hard to solve. But the lack of context provided by journalists and commentators misleads readers and audiences. Moreover, the framing of this crucial economic reform as a culture war is wholly illegitimate, and entirely the equivalent of the media campaigning against Labor’s reforms in the 1980s.

Climate action will always fundamentally be about economics. And that will eventually obliterate the efforts of News Corp, centrist journalists and the Coalition to frame it as a cultural issue. The only question is how much Australians will pay for those efforts. The debates about whether Anthony Albanese needs to support a gas-powered white elephant, or whether Joel Fitzgibbon is right that Labor has lost its way with working-class voters, will end up as footnotes to a broader story of how Australia lost its way under the Coalition in the 2010s and 2020s.