Labor under Julia Gillard returned to office on the most right-wing platform in the party’s history. But she delivered the annual “Light on the Hill Address ” recently and invoked the spirit of Ben Chifley. There is both sound logic and a contradiction here.

It is worth going beyond Ben Chifley’s phrase “the light on the hill” to the rest of the speech from which it comes.

If the movement can make someone more comfortable, give to some father or mother a greater feeling of security for their children, a feeling that if a depression comes there will be work, that the government is striving hardest to do its best, then the Labor movement will be completely justified.

This is a very modest vision one that challenges neither the profound inequalities of Australian society nor the system of production for profit which creates them. It is more a candle in the kitchen than a beacon atop the mountain.

Gillard’s perspectives are similarly limited, but the gap between the expectations of Labor voters and the reality of Labor governments is much smaller than in Chifley’s day.

The ALP has been in office at federal and state levels a lot more often today than it had been when Chifley became prime minister, after John Curtin’s death in 1945. The party is used to managing the Australian economy and the party’s supporters have learned not to expect radical changes.

To Australia’s top owners and managers, the prospect of Labor prime ministers, premiers and ministers is less worrying than it used to be, even if they generally prefer it when their chums in the Coalition are in government.

The ALP has shown repeatedly that it accepts Australian capitalism and that therefore, in the “national interest”, it makes the maintenance of profits its top priority. If that means “fiscal conservatism”, so be it. If a big dose of public spending is necessary to keep the economy ticking over as global financial markets melt down, that’s fine too.

Kevin Rudd came to office professing his commitment to budget surpluses and returned to this neoliberal mantra even before he was displaced by Gillard. During the August election, Labor and the Coalition put most of their efforts into demonstrating their superior credentials as liquidators of the budget deficit.

Nor were there major differences between them in the area of industrial relations. Labor’s Fair Work policies amounted to WorkChoices “lite”, tougher on unions than the first round of the Howard government’s changes in 1996.

On the treatment of refugees, immigration and equal marriage rights for gays and lesbians, both parties sang the same tune, if in slightly different keys.

Rudd’s resource super profits tax, bound with cuts in the corporate tax rate, did represent a somewhat different approach to developing Australian capitalism and was very much in the Labor tradition. But this proposal to share the windfall profits of the mining boom with other sectors of industry was watered down when Gillard took over.

Labor’s connections with the working class, through the ALP’s rank-and-file membership, voters and trade unions have all declined, though they have not disappeared. And, in a period of very low levels of self-confidence and combativity among workers, there is less pressure on Labor to make concessions to its traditional base.

This is not to romanticise the past and certainly not the Labor Party under Curtin and Chifley. They succeeded in making workers pay for World War II by extending income taxation to low earners for the first time. To achieve this, and a workforce that was healthier and better incorporated into Australian capitalism, a modest part of this new revenue stream was spent on expanding the welfare state. After hostilities ended, Chifley retained war-time wage pegging measures to keep a lid on workers pay, until a series of strikes achieved shorter hours and forced the government to abandon them.

And it was Chifley who set troops to work mining coal in 1949, in order to break a miners’ strike.

Gillard, and the modern ALP, certainly do stand in this tradition of putting the interests of business before those of workers.

Rick Kuhn is in the School of Politics and International Relations at the Australian National University, Tom Bramble is in the Business School at the University of Queensland. Their book Labor’s Conflict: big business, workers and the politics of class will be published by Cambridge University Press in November.