A small but definite step for a timid PM, but a tiny jump for Labor

Having gathered some courage, some circumstance and some sense of direction, the government took a few tentative steps forward in reforming the income tax system, and, it claimed, in turning back some of the intergenerational inequity built into the existing system.

It could have done so boldly, given the hopeless disorganisation of the opposition, and the incoherence of its leader, Angus Taylor, and the fact that Senate support was forthcoming from the Greens if only the budget was pointed in the right general direction, particularly on housing.

Additionally, the petrol crisis, rising inflation, and, consequently, rising interest rates created a sense of urgency and demand for change, rather than for more of the same. It suggested not so much a need for caution or tentative steps but firm and determined action, and a campaign that confided in and engaged the public and its major policy problems.

It was an opportunity for the government to show its fundamental character as a Labor government, to take charge and to make it clear that its leaders knew what they were doing. They should have taxed gas and moved on subsidies for the coal industry. They could have been less generous in grandfathering provisions. The value of any generational shift towards younger generations is minor because they don't want to hurt the feelings of wealthy older Australians, people who wouldn't vote Labor in a fit.

It was a political moment ripe with opportunity, the more so with the confusion caused by Pauline Hanson's One Nation movement. One Nation may ultimately cause as much damage to Labor as it has to the opposition. Its destructive energy is focused on parties its leaders think have most let it, and the nation, down.

Labor has no votes to mine, or to neutralise by pandering to anti-immigration sentiment. Indeed, the Liberal Party, already seemingly in its death throes, is being the more contemptible by coded calls against multiculturalism, Islam, and Chinese, Indian and African Australians.

In the long run, some Labor grit and "bottom" on what once were bipartisan policies will serve Labor and Australia well. Even more so when many traditional supporters of the conservative parties, who appreciate the need for, and the role of immigration in the nation's economy, culture and community will prop before adopting the crude racism of One Nation. That is, of course, if Labor has the guts and principle, and the opportunism to campaign on traditional egalitarian and "fair go" values and on tolerance, rather than running a million miles from the subject as though the Australian people have become stained by the ranting of Hanson.

Hanson is completely right in insisting that she has been consistent for more than 30 years on being hostile to Aborigines, Indo-Chinese and non-white migrants. But even most voters who support her do not agree with her on the subject, or on many of her other protest points. They simply agree, reasonably enough, on the hopelessness of the mainstream political parties, their inconsistencies and self-interest, and voter sense of powerlessness and despair.

Labor will do better by standing on principle than pandering, as the coalition is, to Pauline Hanson. She doesn't represent a new racist consensus.

The mainstream political system is being tested as never before, and not only in Australia. We may be already witnessing the demise of the two major existing parties, and largely at their own hand. They have not collapsed because of Pauline Hanson's criticisms of their record, their policies and their leaders. Populists such as Hanson (and in Britain, Nigel Farage of Reform) get their build-up when traditional parties come to seem out of touch with their constituents, out of step with the times, and when they wreck their times in power by focusing more on their own personality problems than on the task of government. That task of government, of course, includes a two-way conversation with voters in which parties listen to voters' needs and explain what they are doing. That's a fundamental incident of leadership, and, at the federal level, only Pauline Hanson is exhibiting it.

Anthony Albanese may be the most inarticulate Labor leader of the past 120 years, the one least given either to selling simple Labor messages, or to explaining to the public what he is doing. And he is, despite his recent burst of boldness, very cautious, very incrementalist and very obstinate. Yet Labor could well be the only major party which survives over the next few decades. There may even be three years or more to be had from Albanese.

If Labor is to survive these tumultuous times, it will not be because of the strength of Labor as an institution, because the party is, these days, a hollow shell, a shelf company operated by professionals who pay very little regard to democracy, internal party rules or shibboleths. It will not be because Labor has a time-worn model and style for successful economic management, political inspiration and a lasting narrative of itself generally held within a section of the community.

In recent years it has widened its appeal to win the support of many inner-city members of the middle class, at some cost to its support among the working class. On the other hand, it has gained, (or at least been the beneficiary from) declining support for the traditional conservative parties among the young, the better-educated, women, and migrants.

Labor's character and the type and class of the people who lead it have changed over time. Labor leaders are not merely creatures of the party machinery, but of the population, the nature of the economy and popular culture of the day. These characteristics have changed enormously over the past 40 years, but never so much as now. To all the technological and cultural change has been added the uncertainties of the world economy, and of world leaders such as Donald Trump.

The threat to Labor's long-term survival, as it has been to the Liberal and National Parties, is that it has been adapting to change more slowly than the population, the economy and popular culture. When it resists change, it often seems out of touch or so bolted on to past ideas that it is not well suited to overseeing governing in the modern day.

If it promotes change, or policies it says are better suited to modern times, it faces new types of scrutiny, including a very different media, new ways of critical examination by constituencies, new pressures from interests and at least the impression of too little time. But even as it shows itself open to new ideas and new influences, it is important to show signs of continuity with the past, enduring values and very firm roots in Australian soil and the Australian character.

There are other parties which have less trouble in surviving. The Greens, for example, are still a ginger group party, one whose primary interest now extends beyond conservation of the environment and preparing for climate change. It pushes reforms in human rights, in the dignity and support of marginalised groups and in health, welfare and education. It is generally left of Labor, but it is more than a mere protest party. And its approach to policy is far more sophisticated than the Hanson party, perhaps to be regarded as its opposite number on the right.

Its numbers in the Senate have given it some power of veto over Labor proposals. It now gets about half as much support at an election as Labor and is essential to Labor if it is to win seats on preferences. Many regular Greens voters were once members of Labor's left who left the party permanently in 2001, when Kim Beazley, then Labor opposition leader, was thought to have betrayed the Tampa refugees. Many of these were of the old Labor engine room responsible for most of the original policy ideas.

Their place, as sources of policy ideas has been taken by party professionals, often called "suits". Albanese, though once notionally of the left, was always essentially a suit, always on the party payroll. He regards the Greens, on whom he depends, not as an ally but a rival, and wages political war against them with far more spite and vigour that he fights Tories. Yet he is often dependent upon them for their Senate votes.

Without a party such as the Greens on his left, or a party in the middle, such as the old Australian Democrats, or, perhaps these days, a party made up of elected teals and community independents, Labor would be permanently out of power, and would probably collapse, in a manner like the mainstream conservative parties. Although its old trade union base is much diminished in size and economic power, it has the structures and resources that could support a Labor revival, at least for a time.

Most likely, however, a "new" Labor Party would not have the discipline, or the organisational strength of the old party. It would be rather more like the Democrats in the US - with elected members relatively free to push their own agenda. They would regard the party label more as a signpost than as a common binding platform.

Abuse of power - and we are seeing it - causes further despair about the political system.

Labor's very comfortable elected incumbency under Albanese gives the party a lot of room to manoeuvre. That includes its capacity for patronage - rewarding its prominent supporters and donors, including (as in Scott Morrison's day) the power to award contracts without tender or merit process. It includes ready ministerial and ministerial office access for lobbyists, party figures and party donors, who operate a government for insiders without much in the way of transparency or accountability.

Albanese, from his beginning in politics and adept factional player and a person used to sharing out the goodies is comfortable with the way that his party governs, and provides loose, but alert, supervision of ministers, but considerable freedom of action within portfolios. And remaining in office for several more terms (perhaps one for Albanese) seems assured given the hurdles the conservatives must jump.

But if Labor is dedicated to the long-term survival of a party that is still recognisably Labor, it needs to clean up its act. And not only to weed out corruption, a serious problem by itself. It needs to become again a democratic party, adapted to permitting critical member participation and clear roles in policy formation.

It must be remembered that Labor is a public body, receiving annual taxpayer subsidies in the scores of millions of dollars. The accountability regime is a disgrace and has been deliberately rigged by the major parties to allow all sorts of rorts to conceal donations to party resources. Yet its system of government is weaker than a small-town football club, and those in actual charge of the resources regard the label "Labor" as but a brand, and not a terribly precious one.

Preselection - the system by which Labor men and women get into Parliament - is in most places under the corrupted control of party chieftains. If many members of Parliament are hostages, first and last, to individuals in factions, how can the public expect that their default setting is on integrity?

One can expect that many figures in the modern cabinet and caucus, at either federal or state levels, are reasonably happy with the current arrangements, arguing that it works, however imperfectly. But it is just such complacency that is eroding popular support for the political process, and confidence in the principal parties. It may have already consumed the Liberal Party, thanks to the way that it has abused power in recent times.

A Labor party which has failed to adapt is vulnerable to the same forces. A Labor party which is not bold in developing policies and dealing with the problems of its supporters will simply not be able to develop the popular enthusiasm to hang on. Brave, bold and resolute, with policies calculated to make a difference to the lives of Australians are necessary, particularly in budgets. Being bland, boring, dull and safe won't cut the mustard.

Budgets need a following and some sense of ownership, excitement and inspiration. It may be hard to imagine what Albanese or Richard Marles would like as monuments. But does a Jim Chalmers want to be remembered as "pedestrian" - a man who would not take a risk? He may have taken some risks in this budget, but they were only a fraction of what Labor should have done.