Labor and the Australian oligarchy

March 9, 2007

A tiny group dominates Australian politics and Labor leader Kevin Rudd recently met them. He knows very well that the key to Labor's electoral success later this year is an accommodation with the Australian oligarchy.

This was what Labor under Bob Hawke achieved in the early 1980s: a clear policy understanding with a significant section of the dominant corporations. These days this means media, banks and mining. Without this, Labor will be pilloried in the corporate media, blamed for failures in investment and jobs, and rounded on by well-funded propaganda campaigns. That is why Rudd's new friend, Rod Eddington, introduced him to some mates at the Business Council of Australia (BCA).

Public opinion runs a poor second to the corporate imperative. Why else has government after government run the deeply unpopular policies of privatisation, cuts to social security, attacks on job security, regressive taxes and foreign invasions?

What is the Australian oligarchy? Who are these people? The list has recently grown shorter as media concentration and cross-directorship links have increased.

Agenda setters in the corporate media have stifled sensible public debate. News Ltd has relentlessly backed bloody war in the Middle East, PBL has pushed its privatisation agendas as news stories, while Fairfax is dominated by Liberal Party hacks. The public broadcasters have been intimidated and had their boards stacked. Some choice.

Australian banks and mining companies have become tightly cross-linked. This nexus is a peculiarly Australian feature.

Mining dominates Australian exports and banking is now a formal monopoly. The same three companies — JP Morgan Nominees, National Nominees and Westpac Custodian Nominees — are now the top three shareholders of each of ANZ, the NAB and Westpac. Rudd's new business adviser, Eddington, is a board member of both News Ltd and JP Morgan.

A few individuals are now in crucial positions. Michael Chaney, chair of the National Australia Bank board, is also a director of Woodside and BHP-Billiton.

Charles Goode is chair of both Woodside and ANZ. Leon Davis, chair of the Westpac board, is also deputy chair of Rio Tinto. Don Argus, chair of BHP-Billiton, was formerly CEO of the National Australia Bank. A number of other directors sit on both mining and banking boards. Several former corporate media directors sit on the ANZ board. The Howard government has stacked its cronies on the boards of the ABC, SBS and other public authorities.

Though virtually unknown to the public and politically unaccountable, these characters are hardly politically inactive. Goode has organised large donations for the Liberal Party through a foundation. Chaney chairs the deceptively named Centre for Independent Studies (CIS) which, along with other corporate think tanks, is handed a substantial voice by its corporate media comrades.

These are the people (through bodies such as the BCA and the CIS) who campaigned for the GST, for Work Choices, for privatisation and for privatised Aboriginal land rights. These are the people Rudd must please. Their commitment is not so much to the Liberal Party as to policies that benefit the private investment groups they lead.

Labor was pilloried in the 1960s (by the corporate media) for being run by a group of "faceless men" in the union movement. The present reality is that corporate faceless men dominate both major parties.

Rupert Murdoch's Fox News, with its ferocious, neo-fascist propaganda, has become an icon of modern misinformation. It has been a bastion of support for the Bush administration. However, Murdoch's recent support for Hillary Clinton demonstrates that, when it comes to business, there is no essential party loyalty. A similar process might be seen in the Rudd-Eddington connection.

However, this oligarchy backed the principles of Howard's Work Choices law and are not happy with Labor's stated intention to "rip it up". This is a problem for Rudd.

What then are the constraints on Labor? What could it do in government if it regains the confidence of the oligarchy?

It might revise some social programs, adjust some environmental laws, create new corporate subsidies and reshuffle the cronies. It will not be allowed to engage in public investment that competes with private investor opportunities, scare the stock markets, interrupt the private plunder of natural resources or regulate the corporate media.

These limitations indicate a failure of political alternatives and participatory democracy. They are linked to a tightly controlled and undemocratic media, weak public debate and a moribund two-party system.

Minor parties need not face the same pressure, except to the extent that they want respectability in the corporate media. But Labor's task is clear, or, if it were not, Rudd's new friend from News Ltd and JP Morgan will have made it so.

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