The Labor Party has just secured a resounding second-term mandate – defying forecasts, media pessimism and internal doubts.

But rather than silencing his critique, this victory makes Bill Kelty’s 2024 warning more urgent: is Labor governing boldly, or just winning cautiously?

Kelty, a veteran architect of the Hawke-Keating settlement, offered in his widely circulated “ _Labor Is Mired in Mediocrity_” essay a heartfelt lament: a party too risk-averse, too self-congratulatory and too disconnected from the material realities of renters, young people, and workers left behind in the post-COVID economy.

The 2025 result may seem to rebut him. But scratch beneath the headline, and Kelty’s core questions remain painfully relevant: What does Labor stand for? And for whom is it building the future?

A party governing in the gaps

Yes, employment is up. Inflation is easing. But real wages remain flat, housing is a crisis not a market and young people face a lifetime of renting, debt, and disillusionment. Kelty identifies all this. He urges a revival of the old Labor imagination – through job guarantees in essential industries, new housing commissions and a generational fairness compact. He calls, in effect, for reform from within the old paradigm.

That’s both his strength and his limitation.

The Kelty frame: Astute, but still caged

Kelty’s critique resonates precisely because it comes from within Labor’s historic centre: a movement that once married wage growth with national development and saw public policy not as redistribution alone, but as a collective investment in national dignity.

But he remains tethered to the very compromise that is now fraying: privatised superannuation as social policy, enterprise bargaining as a wage fix, state-market hybrids that assume the market is OK when nudged.

These tools no longer work in a system rigged by asset inflation, regressive tax law and structural precarity. For many on the democratic left, the task is not to fine-tune the Hawke-Keating machine, but to move beyond it entirely.

Beyond the Kelty warning: A Left vision for 2028 and beyond

Labor’s triumph in 2025 gives it breathing room. But power without purpose is a missed opportunity. The party’s path to 2028 should not be paved with poll-tested tinkering. It should be underpinned by a moral and material reckoning with the challenges Kelty names – and the deeper ruptures he skirts.

1. Housing as a right, not an asset

• A new public and co-operative housing authority should build 500,000 homes by 2035.
• Ban rent-gouging. Cap annual rent increases. Phase out negative gearing and introduce a progressive land tax.
• Fund it not through super fund partnerships alone, but through public borrowing and public ownership.

2. A new deal for young Australians

• Lift the HELP threshold to $65,000. Index it fairly.
• Introduce a youth guarantee: free TAFE or university, paid apprenticeships, and a job guarantee in care, clean tech,or teaching.
• Tax unearned wealth. Scrap regressive subsidies. Build real intergenerational equity.

3. Reclaim the commons

• Reverse the creeping marketisation of aged care, childcare and vocational training.
• Build public options in energy, finance, housing and digital infrastructure.

4. Break the AUKUS spell

• Kelty rightly warns against militarised distraction. But even he understates the danger.
• A trillion dollars for submarines and nuclear speculation is not just wasteful – it’s a betrayal of regional peace, democratic accountability and economic prudence.

5. Decarbonise with justice

• Treat climate action as a nation-building project, not a regulatory burden.
• End fossil fuel subsidies. Invest in First Nations-led land management and public renewables.
• Make ecological restoration a jobs program, not a trade-off.

Toward a post-neoliberal Labor

The next three years must be about governing with courage, not just competence. Kelty reminds Labor of the dangers of drift – but he can’t chart the course alone. That’s the job of unions, communities, renters’ movements, First Nations leaders, and younger generations within and beyond the party.

Labor will not win 2028 by doing more of the same. It will win — and deserve to — if it offers a genuine economic alternative, an inclusive democratic agenda and a just transition for the many, not the few.

The victory is won. Now comes the hard part: changing the country, not just running it.