The Liberal Party (NSW Division): The Case for Reform

The Liberal Party of Australia’s NSW Division is under pressure to carry out long called for reforms over pre-selections and the influence of isolated sections of the Division in party administration. Liberal Party member, and mortgage broker, John Ruddick has gone on record as calling for the banning of lobbyists from party positions (now enforced) and a ban on the party accepting large donations from business interests with sectional influence. On Wednesday 20 November 2013, John Ruddick addressed The Sydney Institute to outline his case for reforms of the Liberal Party’s NSW Division and to explain why he and other party members believe democratisation of the party is overdue.

THE LIBERAL PARTY (NSW DIVISION) – THE CASE FOR REFORM

JOHN RUDDICK

Thank you Gerard and Anne for this opportunity.  My father told me as a teenager to read Gerard Henderson whenever I could so it is a great honour to address The Sydney Institute.

On 25 September, I spoke on the ABC’s 730 program for ten seconds about the internal affairs of the NSW Liberal Party. I spoke in favour of democratic reform but without the “authorisation” of the State Director. I now face suspension of my party membership for five years. If just 10 seconds warrants five years … then after an hour at The Sydney Institute I fear my suspension may be extended to the year 3813AD.

The NSW Liberals are the only party in Australia that routinely suspends members for speaking out about internal affairs. I believe in playing by the rules but some principles override that consideration.  Free speech is one.  Martin Luther King said, “One has a moral responsibility to disobey unjust laws.”  The Liberal Party champions robust free speech so we have a duty to honour that principle internally. Free speech is sometimes uncomfortable but it’s essential in a free society as it spurs improvement.

The restriction on free speech is just one symptom of the rigid factionalism that has wracked NSW Liberals since the 1970s. Robert Menzies would be appalled a state division of his party has been swamped by a trade union mentality, which is so alien to our core belief in a free conscience.

I want to put two indisputable facts to you. Firstly the Liberal Party and its forebears have governed Australia at a federal level over 70 per cent of the time since Federation. Secondly, NSW is not just one of six states we have almost a third of the MPs in the House of Representatives. Those two realities tell us this – the internal culture of the NSW Liberal Party is of national significance.

Tonight, I outline a new party structure and the pathway for comprehensive democratic reform to be adopted by the NSW Liberals by mid 2014. We will transform our party so that people are enthusiastic about membership.

The era of excessive factional division will soon end. Now, I recognise that division within a political party is good when it’s about ideas. We are about solving contentious issues. It is expected the Liberal Party will have conservative and moderate wings – indeed they maintain our appeal as a broad-based party that wins elections. But, in NSW our so-called “left” and “right” factions have little to no basis in philosophy. It’s a relentless low intelligence battle to win control of delegates through payback, coercion, character assassination and rorts where factional loyalty trumps merit.

The end goal of the party organisation is to put the wisest people available into the position of writing laws. A democratised party will pave the way forward for better lawmakers. We already have some parliamentary stars; we just want a team full of them. In the past 20 years, I have seen quality individuals express interest in parliament but walk when told, “Well you’ve got zero hope … you need to pay your dues to a faction for a few years first.”

Some may say, “we don’t need reform … everything is fine. Liberals have a large majority in both Macquarie Street and Canberra.” But that logic only holds if our benchmark is the ALP.  The recent democratic reforms within Labor were somewhat misguided though on balance encouraging. Despite that the internal processes of the ALP remain archaic.

Senator Bob Carr recently retired. Do you know who chose the new Senator for NSW?  The Administrative Committee of the NSW ALP. That Administrative Committee consists of around 40 people. Do you know how to become a member of the Administrative Committee?  Are they elected by the membership? No. Are they even elected by delegates elected by the membership? Sorry, no again. Members of the Administrative Committee are appointed by unions and Sussex Street. But who appoints office bearers at Sussex Street?    The Administrative Committee does! It’s a small group of mates appointing mates.

While on Labor, however, I do want to praise Senator John Faulkner who has shown courage in championing democratic reform. No thoughtful person can deny the contribution of Labor to Australia’s success and so it’s in the nation’s interests that Labor too properly democratises.

Today, I outline a structure which will transform the NSW Liberal Party into the benchmark of political excellence in Australia. This structure will I hope be a model not just for the other Liberal state divisions but also the ALP.

The internal mechanics of the NSW Liberal Party have not changed significantly since the 1940s. We are overdue for an upgrade and a cosmetic makeover won’t solve our troubles; we need an entirely new party constitution. This constitution will be democratic, simplified and welcoming of new members. And yes, it will be open to media scrutiny.

Every political party has a constitution or rule book. Other Liberal State Divisions have around a 70-page document so as do comparable parties overseas. The constitution of the NSW Liberals is a staggering 234 pages; it must be a contender for an inglorious world record.

Since the 1940s, the party has been structured around “branches and delegates”.  An individual joins his or her suburban branch and the branch elects “delegates” to pre-selections and other forums. Few members exercise influence other than voting for delegates but for the first few decades this was fine as branches voted for delegates on merit.

Organised, state-wide factions first appeared in the late 1960s. A right wing faction saw it could accumulate power by branch-stacking.  This simply meant that a faction would recruit new members to specific branches and then instruct them to vote for branch delegates as a bloc. Stacked branches became phantom branches that barely raised money, recruited candidates or contributed to campaign; they simply met once a year with ten or so people to elect zombie delegates.

In the 1980s, a left-wing faction emerged to counter the right. By the 1990s, around one third of the party identified with the left, one third with the right and the remainder voted on merit.

In 1994, we had a contentious debate about pre-selection rules. Previously a pre-selection panel would consist of just 70 voters. Only a quarter of the voters were delegates from the local branches (who generally voted on merit) but the clear majority were appointed by head office and usually obeyed a faction. A motion proposed increasing the number of locals so they were the majority.

Then shadow IR Minister John Howard spoke in support stating, “I support all local members having a say in our pre-selections as it will curb the power of factions. If we can’t go that far today then this motion is a step in that direction.”  Members of today’s ruling faction argued forcefully against this partial move to democratic reform. Thankfully John Howard narrowly won and, not coincidentally, the next pre-selection was Warringah where one Anthony John Abbott won an unexpected victory as the merit-voting locals had a majority say.

Since then, sadly, most branches have been factionalised. Today, there are around 350 branches in this state. Most are little more than paper branches. Most meetings are dull, poorly attended and in increasing frequency spiteful.

It’s not anyone’s fault; it’s the constitution’s fault. It’s been endlessly tinkered with. It’s a maze of legalese few understand, so let’s boil it down its essence. To become a party member you sign an application form and pay a $95 annual fee. We once had 40,000 members. Today there are around 10,000, but only 600 or so enjoy any real influence. When only 6 per cent get a vote it’s a similar ratio to the old South Africa. Those 6 per cent are the members of State Council. State Council is made up of one delegate from each branch (regardless of its size) plus our parliamentarians and a few others.

Those 600 members of State Council elect our 23-member “Board of Directors” or what we call the State Executive. The rules are such that if a faction gets 60 per cent of State Council’s votes they will secure 75 per cent of the State Executive. And when one factional bloc controls 75 per cent of State Executive they can exercise “Special Powers” which means they can rule by absolute decree and utterly ignore the Constitution.

“Special Powers” were introduced for emergencies … such as replacing a candidate during a campaign due to illness. For the past two years a faction opposed to democratisation has had 75 per cent of State Executive. They have appointed candidates to winnable seats, suspended members, disbanded branches and gerrymandered votes. Their guiding principle has been to look after themselves and their mates. With a committed 4 per cent of the 10,000 members obeying a faction that faction gets to rule the mighty NSW Liberal Party by decree. I am confident that 80 per cent of party members support democratic reform but Special Powers have resulted in our party being hijacked.

When a ballot concluded last year, which resulted in their 75 per cent continuing, a certain federal MP quoted Julius Caesar on Facebook: “War gives the right of the conquerors to impose any conditions they please upon the vanquished.”

This structure and this mentality is no longer acceptable in the party of Menzies.

So let’s get down to brass tacks. The end goal of all factional activity is the power to select our candidates for parliament. That process needs reform, but this is how it currently works.

Let’s imagine a blue ribbon federal seat called Howard and let’s say its Liberal member has retired. Current party rules would require a pre-selection to choose our candidate. Around 120 party members would be pre-selectors. It doesn’t matter if there are 700 members of the party who live in that seat, only 70 or so will be chosen as delegates for the pre-selectors. The remaining 50 will be selected by head office. Most of those 120 will vote how a faction tells them to. With so few voting a predetermined outcome is easy to pick.

Twenty years ago a Frank Robinson of Lindfield had a letter in The Australian.  It is 20 years ago so please excuse the assumption only men play golf. I quote:

A member of the Liberal Party today can be likened to a golf enthusiast who joins a golf club with the not unreasonable expectation of playing golf. After paying a joining fee he then discovers that only the officials can play golf. He is expected to mow the fairways, look after the greens, contribute additional money for the upkeep of the club but … not play golf – the very reason he joined. This is the same position of Liberal Party members who pay their fees, are expected to raise funds, help at election time but have no say in the pre-selection of parliamentary representatives in their own electorate. Why be a member?” 

Well said, Mr Robinson.

The first reform is obvious; we need to give every party member a vote in choosing our candidate for the seat he or she lives in. Since branches often reject new members, we must include our “members at large” who are members of the party but not of any particular branch. This will result in several hundred members voting and the outcome too difficult to manipulate.

The process just described is a plebiscite. If the public know they can have a say in their local MP this will encourage them to join. A merit based selection will also attract high calibre candidates.

Plebiscites were recommended 30 years ago in the Valder Report. Most Liberal state divisions have now introduced plebiscites and largely ended factional bitterness. It has not resulted in either conservatives or moderates dominating, it has produced candidates in sync with their electorates. Plebiscites have been embraced around the world in recent decades by comparable parties.

I propose each year all Party members who live in a federal seat be invited to attend a one day “Annual Federal Electorate Convention”. At that Convention, the local party executive will be elected by all the members and if a federal election is due to be held in the next year that convention would also conduct the plebiscite. These would be vibrant and well attended meetings since all local Liberals will vote, not just a few delegates. A similar Convention would be held for state seats.

The media will be invited inside the convention; a democratised party will not fear our processes being on display. It will be similar to top restaurants which have an open kitchen for diners to freely observe the preparation process as the chefs are proud of their work.   The various Conventions across the state will compete to hold the best Convention with quality speakers, genuine policy debate and enjoyable social events.

Candidates for a plebiscite will freely engage the media but be prohibited to pay for advertising. Websites will be good but paid commercials will favour candidates with deep pockets. Talent will be supreme, not cash.

Could factions manipulate a plebiscite? We will prevent them even trying. There are two mechanisms, which will end the need for organised factions to exist.

Let’s go back to the seat of Howard. Let’s imagine there are 500 sincere party members who live in Howard. And let’s say a candidate for the Howard plebiscite named Mr Schemer recruits 1,000 new members who don’t care about politics but who all share with Mr Schemer an ancestry in a village in France. These 1,000 recruits would all blindly vote for Mr Schemer regardless of how thin his resume may be and swamp the 500 sincere members.

We would counter Mr Schemer by giving the local party executive and the State Executive, if they suspect there is an irregularity, the power to invite all party members in the adjoining seats to participate in the plebiscite. The membership will have faith in those executives as they will be democratically elected. Most seats share a border with around four others and a significant number will gladly participate. This influx of other sincere Liberals would dilute the influence of the stack and talent would win.

As a further back-up, we will give the local executive and the State Executive the power to have a primary instead of a plebiscite. A plebiscite gives the vote to all party members. A primary extends the vote to the public who live in that seat. Plebiscites are better than primaries as the best people to choose candidates are those with a commitment to the party but a primary would be a rarely used back-up mechanism.

I suspect that once the factions understand there is no point trying to rig an outcome they will disband and these two back-up mechanisms will not be needed.

How will we select candidates for the Senate and the state Upper House? The most factionalised forum in our party is the Senate selection. Around 100 party members presently chose our senators; those senators represent seven million people. Those 100 party members consist of two delegates from each federal seat plus our friends on the 22 member State Executive. It’s similar for the Upper House.

In other states, Senate candidates are chosen by the several hundred members of State Council. That is clearly better, but we will transform the NSW Liberals into the gold standard political party. We will give every party member from Broken Hill to Bondi, a vote in a state-wide plebiscite to choose our Senate and Upper House candidates.  An “Annual State Convention” would be the highlight of membership. The “Annual State Convention” would host these contests in the year prior to a state or federal election. This will be an attendance ballot and for members outside of Sydney we would have a dozen locations across the state where the Convention will be broadcast live allowing all members to watch candidate speeches and vote. Sorry factions; no more postal ballots to rort.

State-wide plebiscites for our Senate and Upper House candidates will be exciting, dynamic contests. The media would be invited to broadcast the proceedings. Media coverage would inspire people to join our party and attract quality candidates to these contests in the future.

Reformers in other states were tempted to democratise Senate and Upper House selection but none have. It is, however, the most critical reform. Let me explain why.

Plebiscites for the lower houses will be good but in practice won’t mean too much in our safe seats. Imagine a party member who lives, for example, in Manly. With Tony Abbott and Mike Baird as the local MPs, a party member in Manly probably won’t participate in a plebiscite for another two decades. But, if all party members vote for our Senate and upper house candidates there is at least 58 per cent chance in any given year of a vote of importance.

This reform, more than any other, will grow the membership significantly. It would win back overnight the many thousands of good Liberals who haven’t renewed their membership. A large membership will not only defang the factions it will boost fundraising and volunteering. Party members will be enthusiastic about their membership.

We need a State Executive of the calibre of the board of a publicly listed company. We need to prohibit those with a conflict of interest from serving on the State Executive. We need a State Executive which acts strictly in the best interests of the party. We will achieve this by giving every party member a vote for our State Executive at the “Annual State Convention”.

Democratic reform has been resisted most forcefully in NSW because the ruling faction is dominated by lobbyists. Lobbyists have a positive role to play a modern economy; government and business need to communicate efficiently. One high profile lobbyist and self-described factional warlord gave an interview shortly after the 2011 State Election boasting, “We go from success in the morning to success in the afternoon when we roll out pre-selections.” Lobbyists in our party have not only been paid to influence lawmakers they are also appointing many lawmakers. They stridently resist democratic reform as it will dilute their political and commercial power.

Many of us have taken a stand and said “enough is enough”.  We will bring about democratic reform. Those opposed cannot refute our logic so they hide behind the excuse, “yes we need reform … but after the next election”.  This is a policy of delay. The same thing happened prior to Britain’s Great Reform Act in 1832.The Tories controlled parliament by denying most people a vote and kept coming up with excuses to delay democratic reform. They only bowed to the popular will after days of rioting and fears of a French style revolution. I am not advocating riots but let me be clear; the membership wants democratic reform within months not years.

If we delay democratic reform until after the 2015 state election well, by then we will be a year from a federal election and the excuse will be recycled.

Last year we had a vote at State Council to introduce plebiscites. That vote was lost 60-40 per cent. With few courageous exceptions, the State Parliamentary Liberals voted en masse against empowering the membership and as a result the motion failed. I want to put our State Parliamentary team on notice; yes, the next State election is important but a democratised party will help us win the next 20 elections.

There will be another opportunity to vote for democratic reform next year. If the state parliamentary Liberals again block democratic reform, if they continue to think the membership is just there to hand over money and hand out brochures, they will sap our motivation for the campaign. A democratised party, on the other hand, will have the membership more fired up than ever about winning in 2015.

The State Executive recently moved to suspend me for five years and that vote was scheduled for this Friday. My superb legal advisor Professor David Flint, however, has received notice that the suspension vote has been delayed into next year. A crack has appeared in the façade.

In the past, suspension for speaking to the media was routine; but this little black duck didn’t accept the guillotine without a fight. I want to thank others who have since spoken to the media in support of democratic reform risking censure themselves – Michael Baume, Ross Cameron, David Flint, Joe Francis, Jai Martinkovits, David Miles, Nick Minchin, Michael Ball and others. To highlight the culture of suspension which hovers over our party members, I remind you of Janet Albrechtsen’s experience. She was threatened with suspension despite not ever having been a member of the party.

I am being targeted because, for two years, I have promoted the ideas I have outlined tonight. At first, it was a little lonely but a significant turning point was when one of the party’s most respected officeholders and campaigners Walter Villatora phoned to invite me to lunch. We’d never previously met but within five minutes Walter reached across the table, shook my hand and said, “John, I’m in. I’m in all the way.  I can’t stand any of the factions, let’s liberalise the Liberal Party.”

The party membership is now enthusiastically in agreement with these principles. The ruling clique can’t refute our arguments and are increasingly behaving erratically. That explains my proposed suspension. But let me be clear; suspension or no suspension this campaign will continue. The only acceptable outcome is fundamental democratic reform prior to the state election.

The next step is that Walter and I will soon distribute this speech along with a detailed blue print for a new constitution. There are details within this framework that need fine-tuning and we need your valuable feedback up until Australia Day.

We are assembling a legal team who will then draft a new constitution. We will then ask branches and conferences to debate and amend that constitution. By mid next year the final version will be submitted to State Council for ratification. If the State Executive thinks it can prevent that debate, I remind them of the comprehensive loss they had in the Supreme Court last year trying the same stunt.

I thank the thousands who have encouraged this campaign; but I am asking you to redouble your efforts. Next year, 2014, is the 70^th anniversary of Robert Menzies’ party. It will also be the year of democratic reform. We need locals in every electorate to champion reform and to get, individuals, branches and conferences to support this process. Don’t let factional hotshots intimidate you, the days of coercion are ending.

I appeal to the thousands of sincere Liberals who are former members but have not renewed your membership. You understand what’s at stake. Please renew your membership now. I also appeal to those supporters in the public who always vote Liberal but have never joined the party. We need you as members too.

To my dear friends on the State Executive – democratic reform is coming so why not get on the right side of history. My suspension was a silly idea that has backfired. Without it, I wouldn’t be speaking at The Sydney Institute so, sincerely, thanks. Suspension was never going to silence the democratic reform movement; you have strengthened it.

Finally, I too can quote Julius Caesar. We have “crossed the Rubicon”. Fundamental democratic reform within months is the only acceptable outcome. This debate is already 30 years old. You can’t trick us with a “Party Reform Committee” run by lobbyists. If you call off my suspension and invite back others you have suspended, I pledge to work constructively with you towards building the gold standard political party structure.