The Labor Party has historically been a party committed to government intervention in the free market to promote a fairer distribution of income, and social protection for the poor and disadvantaged. However, the Hawke/Keating years arguably saw an abandonment of traditional laborist concerns around equity and fairness in favour of free market agendas. Social welfare policies were relegated to the mere alleviation of poverty, rather than being concerned with attacking structural inequities.
Since the federal election defeat of 1996, the federal ALP has struggled to define its core political values and beliefs. However, the ALP has adopted key Third Way concepts such as finding a balance between rights and responsibilities, promoting equality of opportunity, and greater social investment to promote the social inclusion of disadvantaged groups.
There is no doubt that economically the ALP continues to adhere to free market philosophy. The ALP endorses wealth creation, an "economic climate of enterprise and innovation", and active participation in a competitive global economy. Labor recognises the positive role that lower personal and company tax rates play in promoting economic growth, and has promised not to raise the overall level of taxation revenue as a proportion of GDP. Labor has committed to "keeping taxes as low as possible consistent with maintaining a sound revenue base to fund quality public services".
At the same time, the ALP remains devoted to core social justice concepts such as "fairness, equality, and a fair go for all". The ALP argues that government has a “unique and positive role” to play in supporting and complementing the contributions of individuals, families, communities and open markets. Government intervention ensures the universal provision of quality health care, education and a social safety net.
Specifically, the ALP believes in a "society that protects and supports those who face difficulties and disadvantage whether because of disability, illness, old age, misfortune or other factors that make it hard for a person to cope. Labor holds to its tradition of reaching out, embracing, protecting and supporting those in need — as well as supporting those who help people in need". However, this support for income security payments is qualified. Whilst the ALP claims to be the party of compassion, it clarifies that it "is not or should not be the party of welfarism".
The ALP recognises that Australians are "born with unequal chances in life", and has consistently supported a national plan to tackle poverty