LABOR has become an electoral machine largely devoid of purpose and risks a period of "unprecedented bleakness", the former finance minister and party powerbroker Lindsay Tanner says.
In a blistering assessment, Mr Tanner argues the party has become so hollowed out that even its signature polices such as the national disability insurance scheme and the national broadband network were motivated more by political expediency than internal belief.
Speaking in New York, Prime Minister Julia Gillard rejected Mr Tanner's views about Labor lacking purpose, and his criticisms of key policies.
In a forthcoming collection of essays, Mr Tanner argues it would be a "grave mistake" for Labor to believe its poor standing in the polls at state and federal levels was cyclical because he believes it may be structural.
He said the party had declined due to an increase in affluence, which had eroded the party's original working-class base, the rise of "cynical manipulators" in senior positions, and the growth of the Greens.
"Labor has become an electoral machine largely devoid of wider purpose," he argues in his essay, Politics Without Purpose.
"Labor governments still do good things but at the behest of random external forces, not any kind of inner calling," he says.
"This delivers some electoral success but it is inevitably fleeting, and meanwhile the political capital on which longer-term electoral competitiveness depends, is slowly melting away."
Mr Tanner says the substantial increase in pensions, granted when Kevin Rudd was prime minister and he was in cabinet, was driven by external political circumstances, not purpose.
"The unedifying gyrations on climate change and asylum seekers over the past 15 years hardly suggest a clear purpose," he says. "The national broadband network was an improvised response to an unexpected situation."
Mr Tanner says even the disability scheme, a policy heavily promoted by the Prime Minister, Julia Gillard, as driven by core Labor values of fairness and equity, was compromised because it was outsourced to the economically dry Productivity Commission to develop.
"Past equivalents used to be nurtured within the party, the trade union movement, and sympathetic non-government organisations."
However, Ms Gillard said: ''The government's purpose it to keep the economy strong, not just for today but tomorrow."
She said the government's purpose was to use the proceeds of the strong economy to ''meet the needs of the Australian people''. She cited as examples school funding, dental care for low and middle income earners, and the disability insurance scheme, "all great Labor reforms".
Ms Gillard did not answer specifically when asked about Mr Tanner's views that it was wrong to change leaders in 2010. However, she has long been aware Mr Tanner opposed dumping Kevin Rudd at the time.
Mr Tanner, disgruntled at the ousting of Kevin Rudd as leader, quit politics at the election in 2010 and his seat of Melbourne fell to the Greens. "As the focus has shifted from material concerns to more abstract issues of human rights, the Greens have prospered at Labor's expense," he says.
"The Greens can always outbid us because they are not weighed down by the need to deal with material concerns and to win majority support in order to form government."
Mr Tanner attacks "the distinct class of political professionals" influencing the party as "extremely adept at the mechanics of politics but largely uninterested in its purpose".
He says the rising affluence of the working class, a consequence of technological change, the mining boom and economic reform, made selling the narratives of material deprivation and broad economic injustice much harder than 50 years ago.
"It is hardly surprising that a lot of the sting has gone out of Labor's historic mission – redistributing wealth and income to ordinary working people – when many of those people are now among the richest people in a globalised world."
Mr Tanner says the picture is "very grim".
"If we find ourselves out of office all around the country in a couple of years' time, we will have very little to fall back on," he says. "Rebuilding needs people, resources and purpose."
He offers little in the way of a solution other than advocating real reforms that empower rank-and-file members. The incremental changes agreed to at the ALP national conference last December, were "mildly positive but inconsequential changes that have little relevance to Labor's fundamental problems".
"The truth is that it is probably too late for any of this to matter." He said a "root and branch re-think about why we exist" was the only way to deal with the challenge.