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Interview with Matthew Laza, Director of the Policy Network

As social democratic parties continue to lose elections in Europe they are increasingly looking to Australia and New Zealand as beacons of hope.  Chifley Executive Director Brett Gale recently caught up with Matthew Laza the Director of the Policy Network (a global think tank bringing together the best progressive ideas from around the world) to discuss the future of social democracy in Europe and what we can learn from each other.

Given the recent results in the Italian election how would you characterise the state of social democracy in Europe at present?

There is simply no way of avoiding the conclusion that traditional social democracy is in crisis in Europe, a crisis that is only getting worse.

The figures are stark. At the recent highpoint of 1998 11 out of the then 15 EU member states had a social democrat led government. Today, in an expanded EU of 28 member states there are only four social democrat prime ministers, in Portugal, Sweden, Malta and Slovakia. Of the last two, Malta is a tiny country with a not uncontroversial government and many question whether the Slovak party is even truly social democratic, given some unpleasant populist and authoritarian traits. Of the larger two, the Swedes face a tricky general election this September, so soon we could just be down to Portugal. It is not hyperbole to suggest that we could be facing the death of European social democracy as we have known it for the past century and a half.

It’s also not an exaggeration to say that the only real bright spot for social democracy is Australasia. The flame is very much being kept alive by the ALP and NZ Labour and that is why European parties need to listen and learn more from down under.

How are social democratic parties responding to the rise of populist outsiders (from both the left and the right)?

In one word – badly. What’s interesting is that a variety of different approaches have been tried and they have pretty much all failed. That’s not to say that in many instances populists, of right and left, aren’t stalling. They are. But the initiative in ‘beating’ them seems not to come from traditional social democratic parties – who all too often seem leaden in their response, weighed down in their ability to project a forward-looking offer that can counter populism.

So in the Netherlands you saw the Liberals (more of a traditional economically and social liberal than Australia’s ‘Tory’ Liberals) gain the clear upper hand over the anti-Islamic populism of the notorious Geert Wilders.

But most interesting has been how successful the response to populists from new centrist, but avowedly progressive, political movements has been in France and Spain. Most prominently, President Macron has crushed the traditional Parti Socialiste (PS), not least by co-opting many of its brightest and most imaginative voices to join his broad-based progressive movement.

But Spain is arguably just as interesting where a new liberal party called Ciudadanos (Citizens) has injected life into a sclerotic political debate. It has pushed the populist left party, Podemos, into fourth place and is now in the opinion poll lead.

For social democrats, some aspects of both parties’ policy approaches is challenging, but what can’t be disputed is how successfully they are occupying the centre left space and making a specifically fresh and progressive appeal, which has left their mainstream old-school social democrat opponents looking jaded at the very least.

The danger for the traditional social democrats is that they become ‘yesterday parties’, so obsessed with trying to hold together their existing coalition of voters that they fail to offer a vision of a better tomorrow, instead of harking over a better yesterday. This is arguably just what the biggest European social democrat party, Germany’s SPD, did in the recent general election which delivered its worst result since before the second world war. 

What do social democrats need to do to construct a new vote-winning narrative?
What are the key political and policy challenges for social democrats in Europe?

In short – look to the future. To address the big questions that are clearly on the horizon and that, as progressives, we should be getting ahead of the curve on. And that isn’t just about the fourth industrial revolution – although we should be saying a whole lot more about AI, autonomous vehicles, ‘gig’ working and the other changes that digital innovation is inexorably bringing to our economies.

But it’s also about offering solutions based on what society is, and what it expects, now. So, in an age when consumers expect instant choice and control we can’t just been seen as defender of ‘producer’ interests and the status quo in public services. We have to provide a renewed vision that meshes support for those delivering the services with adapting them to actually deliver what society needs today – even if that means radical change. We can’t be seen to want to ‘turn back the clock’.

I am passionate about how universal and timeless our core values of fairness and opportunity are and how distinct, and electorally attractive, that can make our answers to the questions voters are asking. Take the concrete example of the growth of the likes of Amazon which I know has just landed in Australia. We can’t ‘stop the internet’, but we can make companies pay fair tax. We can’t stop shops closing on high-streets as online sales dominate, but we can have a radical vision for our towns and cities. We believe in the power of working together through government and citizen action and that is needed now more than ever.

You’ve recently been in Australia as part of discussions with other social democratic parties from around the world.  What do you see as the common challenges for social democratic parties around the world?

In the conversations I have with social democrat politicians and policymakers across the world I am always struck by just how common the challenges are. I think they boil down to two key dilemmas which themselves interconnect.

The first is how to rebuild faith in progressive economics after the global financial crisis, to convince electorates battered by a decade of stagnant family incomes that an active state can really make a difference and that the simplistic solutions from the populists – be it Trump or Le Pen – are an illusion.

Second, is the whole issue of ‘open’ v ‘closed’ societies, with immigration the central faultline. It has become almost impossible for social democrats to ‘square the circle’ between what was our core vote – the traditional working class who have spent a decade suffering the aftershocks of globalistaion – and a fresh demographic who are emerging as our new core vote in many countries, like the US and UK – far more socially liberal graduates, many of whom work in the public sector. Many argue that in Europe we are in danger of fudging the issue of migration and satisfying no-one, with the pro-migration voters attracted to the unashamedly ‘open’ politics of Macron et al and the rightwing populists acting as a magnet for those who favour tough limits. Clearly this is a challenge in Australia too: how do you craft an appeal that works in Townsville and inner-city Melbourne?

This ‘double whammy’ has hit social democrats hard – knocking confidence just at the moment when it was most needed and leading to a splintering of our vote, especially in the most proportional voting systems.

What can European parties of the left learn from Australian Labor?

Well, amidst all the doom I have been discussing, I think there is hope – and it’s down under. There are two clear lessons from Australian Labor that I am doing my bit to spread the word about.

Firstly, it is how the ALP has ‘kept its head’ and understood that not just despite but because of our passion for social justice we can’t throw out the importance of sound dynamic economic stewardship. While so many parties that were left ‘holding the baby’ in power at the time the GFC hit have been indelibly branded in public perception as fiscally irresponsible, Wayne Swan’s stewardship has allowed Australian Labor to continue to command a fair hearing from voters on the economy.

And the second flows from that. Because we still command a hearing we have the space to be radical to not just talk about inequality in the abstract, but to take a risk and propose concrete policies that tackle iniquities in the tax system and reinforce sound public finances. That’s why I find the decision by Bill Shorten and Chris Bowen to take a stance on negative gearing and dividend imputation so exciting.. It would be all too easy to avoid this seeming political ‘third rail’ but instead standing firm benefits Labor, and not just with those voters who support the specific policy. Being seen to take on vested interests wins support even from those electors who may disagree with the specifics but respect leaders standing up and standing firm. I especially admire it in the Australian electoral system where a safety first stance would be an easy temptation. So I’m blowing the trumpet for Aussie boldness wherever I go!

Are you optimistic about the future for social democracy?

Yes. Which might surprise you. As I’ve said, it is possible to forecast the eclipse of social democracy. To see the light that has been pivotal in shaping decent societies across the ‘industrial’ world for over a century finally obscured behind competitor clouds of right-wing populism and liberal, modern, ideology-free progressivism. But I think there are just enough of us raging at the dying of the light. And as Yazz once said in that eighties classic the only way is up. But, and it’s a big but, we need bold leadership that crucially looks to the future and takes risk.

Take the UK. Jeremy Corbyn has turned back on some who were turned off from politics, but all too often he offers only easy answers – promising students free education but at a price so high we have no money to offer transformative early years education. We need a new generation of social democrats who know we need to say no as well as yes to vested interests, that we can’t offer everything to everyone. But we can translate our simple core value – that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential – into an appeal that resonates today. Thank goodness Australia and New Zealand are showing the rest of the world how that can be done.

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