ALP FACTIONS BIDE THEIR TIME

C O N F I D E N T I A L CANBERRA 000188


NOFORN
SIPDIS

E.O. 12958: DECL: 02/24/2019
TAGS: PGOV ELAB AS
SUBJECT: ALP FACTIONS BIDE THEIR TIME

Classified By: Political Counselor James F. Cole for reasons 1.4 (b)
and (d).


1. (SBU) SUMMARY: Despite the apparent desire of Australian
Labor Party (ALP) leader and Prime Minister Kevin Rudd to end
the power of ALP factions, the January outbreak of a dispute
between members of the Right faction in Victoria is a
reminder that they still control politics at the local level.
Nationally, the factions have lost much of their relevance.
Rudd ignored the factions in picking his cabinet ministers
after the 2007 election. It is virtually impossible,
however, to rise in the ALP without the patronage of a
faction - the Prime Minister being a notable exception.
Rudd, popular with the voters and the man who led the ALP to
its first victory in 11 years, currently dominates ALP
politics but once his popularity with the voters wanes,
faction leaders believe their national influence will return.
END SUMMARY.

VICTORIAN RIGHT SPLITS AFTER DEAL ON PARLIAMENTARY SEATS


2. (U) In January, a dispute broke out among members of Labor
Unity, the principal right-wing faction in the state of
Victoria. Labor Unity, which includes Premier John Brumby,
Federal MP and former trade unionist Bill Shorten and
Communications Minister Stephen Conroy, made a deal with the
ALP Left in the state to protect sitting state and federal
MPs from a nomination challenge. The reason for the
agreement was to shut out a dissident element in Labor Unity
that had defeated Shorten's and Conroy's preferred candidate
in a nomination for a state seat, and had then attempted to
oust ALP state secretary Stephen Newnham, an ally of Brumby's.

THE POWER IS IN THE PRESELECTION


3. (SBU) In Australia, nominations for state and federal
parliamentary seats are called "pre-selections." Meetings
are held at the district branches of each party and the
members choose a candidate. Because this is a small-scale,
parochial exercise, ALP pre-selections are controlled by
those who can bring the most local ALP members to a meeting.
The factions, and the unions which back each faction, can
always ensure that enough members turn up to a branch meeting
to determine the outcome (sometimes known as "branch
stacking"). For this reason, even though the unions are now
less than 20 percent of the workforce in Australia, they
retain a disproportionate share of political power within the
ALP.

UNIONS UNDERPIN FACTIONS


4. (U) Fundamentally, the power of the factions resides in
the membership of their affiliated unions. The Australian
Workers Union (AWU),the Shop Distributive and Allied
Employees Association (SDA),and the Transport Workers Union
(TWU) are major unions affiliated with the Right, while the
Construction Forestry Mining and Energy Union (CFMEU),the
Australian Manufacturing Workers Union (AMWU),and the Liquor
Hospitality and Miscellaneous Workers Union (LHMU) are major
unions affiliated with the Left.


5. (C/NF) The downfall of New South Wales (NSW) Premier
Morris Iemma in 2008 illustrates the sway a union can have
within a faction. The Iemma Government proposed to privatize
the state's electricity system so that the sector could be
modernized and the sales proceeds used to fund pressing
infrastructure projects. The unions in NSW, which are in the
NSW Right faction with Iemma, balked at the sale, knowing
privatization would mean job cuts. When Iemma refused to
back down, the unions forced the Right faction to withdraw
its support for the Premier and he had to resign.
Interestingly, AWU President Bill Ludwig, a Right faction
QInterestingly, AWU President Bill Ludwig, a Right faction
powerbroker in Queensland and one of the most powerful union
leaders in the country, confided to us that he opposed the
NSW unions' tactics with Iemma. He said that ALP governments
have obligations to the general community, not just the
unions, and voters turn on governments that appear beholden
to unions.

GROWING CRITICISM


6. (SBU) During the ALP's years in Opposition (1996-2007),a
growing number of MPs expressed concern that the factional
system, based on power and personalities, was rewarding
political hacks at the expense of talented candidates from
the broader community. In early 2006, in a well publicized
speech, Gillard claimed that factionalism was a "cancer
eating away at the very fabric of the Labor party," and that
it was about "who wins, not what they win for." She called
for the ALP leader to have the prerogative to choose the
cabinet. Before the election, Rudd declared he - not the
Caucus - would choose the ALP ministry. Caucus approved this
in March 2008, overturning more than 100 years of ALP
tradition. Rudd and Gillard no longer attend faction
meetings. (NOTE: Ironically, even though Rudd claimed he
would pick his ministers without regard for the factions, his
cabinet reflects the factional balance within the ALP: 11
from the Right and nine from the Left. End Note)

END OF COLD WAR BLURS DIFFERENCES


7. (C/NF) Over the last two decades, the ideological
differences between the Left and Right have blurred, largely
due to the collapse of Communism, and a recognition by the
Left that a market economy, with appropriate safeguards, is
the best way to raise living standards. For decades, foreign
policy, particularly the American Alliance, was a key point
of difference between the factions, but today key figures in
the Left like Gillard are as supportive of the Alliance as
the Right. According to ALP Senator Dave Feeney, a central
figure in the Victorian factional dispute, there is no longer
any intellectual integrity in the factions and he describes
the current system as unpredictable and "byzantine." Feeney
points out, for example, that there is no major policy issue
on which he, a Right factional leader, differs from Gillard.

FACTIONS MAKE RUDD LEADER


8. (SBU) Ironically for Rudd, who won a seat in federal
parliament without the support of a faction or the unions, he
and Gillard would not have won the ALP leadership in December
2006 without the backing of some of the factions. Gillard
was supported by the Left but she knew she would never get
enough support from the Right to win so she backed Rudd as
Leader. Meanwhile, most of the traditional union bosses from
the Right, unhappy with Gillard and knowing Rudd was not a
union man, supported Beazley. However, the head of the Right
in New South Wales (NSW),State Secretary Mark Arbib, backed
Rudd. Arbib is now the most powerful figure in the national
Right. Rudd has taken him into his inner circle and on
February 18 appointed him as a Parliamentary Secretary.

COMMENT: FACTIONS COULD KEEP GILLARD FROM LEADERSHIP


9. (C/NF) Two ALP Right factional leaders we have spoken to,
AWU President Joe Ludwig and Senator Don Farrell, former head
of the SDA in South Australia and the most influential
powerbroker in that state, both agreed that Rudd's political
power in the ALP is now unchallenged, but they opined that
the factions would reassert themselves once Rudd's popularity
declines. Although Gillard is currently Rudd's heir
apparent, factional maneuvering could ultimately deprive her
of the leadership. Right-wing powerbrokers, the key to
winning the leadership, are likely to prefer one of their own
- such as the leader of the Victorian Right, Bill Shorten -
for the job.

CLUNE