Amidst the wreckage of harbour parties, snowy noses, hangovers and flickering video montages that mark the end of 2013, there's a far less festive anniversary taking place. It's one year since the former Labor government pushed Australian single parents from a family pension onto the dole once their child turned eight.

As the Labor party girds itself for upcoming electoral contests in Kevin Rudd's old seat of Griffith and a Senate re-election in Western Australia, the "Newstart mothers" policy is arguably deserving of greater scrutiny. The decision exposes much about the contemporary character of Labor policy and politics in Australia.

As recently as October, Julia Gillard was defending the policy change, which left single parents – overwhelmingly women – between $60-$100 worse off a week. "I'm going to stand up for it as a decision of the government I led," she told journalist Anne Summers in one of her post-election public interviews. Gillard's justification was that entitlement rule changes occurring over successive governments created a situation in which some families received greater support based entirely on the luck of when they entered the system. To Gillard, reasonably, this was structurally unfair. "I felt we needed to have arrangements that most facilitated and helped women get into work," she told Summers.

This was not, of course, the real reason for the change, and the resulting policy delivered "fairness" only because it reduced all single parents to an equal income which just happened to be beneath the poverty line.

"Newstart" is designed and sold to taxpayers – if not its actual recipients – as a temporary payment for individuals who are looking for jobs. And for all the hype of Labor's "Building Australia's Future Workforce" (BAFW) policy announcements in 2011, Gillard herself admitted that the Newstart mothers have not emerged from the single parents' pension into any Labor legacy programme to provide flexible and meaningful training, support or opportunities to mothers trying to work and raise families on their own.

The pre-Rudd/Gillard conservative government of John Howard made going on the dole a punitive experience. Howard's policy framework stigmatised recipients, demanding claimants satisfy extraordinary reporting requirements to discourage application and receipt. And both Rudd and Gillard's governments went on to spare the welfare system from the most crucial and loudly-pleaded-for reform: a benefits increase. The Newstart payment is well-recognised as insufficient to support job-seeking individuals financially, let alone sustain families with dependent children demanding care.

Merely shifted from one payment to another, the Newstart mothers were the expendable victims of Labor's poorly-strategised attempts to paint themselves as belt-tightening economic managers in the absence of a unwisely-promised surplus. For all of Gillard's public justifications, despite the package of the BAFW announcements, the only policy vision informing the pension change was a panicked impetus to mute the surplus-failure condemnations of a then near-entirely anti-Labor commentariat by howling as loud as they could that $728m could now be saved in four years.

When challenged by Summers on this issue, Gillard was, at least, contrite. “The rate of Newstart is too low and the approach we take to assisting people who are unemployed is not flexible enough,” she admitted, agreeing that the policy change had exposed larger issues around unemployment, poverty and contemporary approaches to welfare.

It's this admission that reveals the integral structural fault from which Labor's problems with its leadership brand all spring. Re-read the last paragraph: that's our former Labor prime minister talking about decisions made by her government in the context of "larger issues around unemployment and poverty" that her party had six years in government to address, but failed to. That's a former prime minister admitting that thousands of families affected by the single parents' pension change were thrust deeper into structural poverty by a decision made completely outside of a comprehensive policy analysis of how welfare is supposed to operate, what gets people back into work, and how much money people need to escape long-term deprivation.

Let's not be naive: the party of Whitlam, Hawke and Keating has the policy knowledge, history and experience to do what is required to reform welfare as a system that equalises social opportunity for all Australians. That it squandered its chance for meaningful reform through the BFAW and then abandoned single parents to the politically fabricated budget panic belies a party which has allowed itself to become spooked by the propaganda of its opponents.

Scapegoating single mothers as cost-centres of welfare largesse accords perfectly to ancient, evidence-free, conservative urban legends of girls who only get pregnant to get the dole, and other furphies of insubstantial anecdata brayed about on talkback any day of the week. By indulging that mythology in policy-making that's antithetical to its stated beliefs, Labor broadcasts an opportunism that manifests its political brand as hypocritical and untrustworthy.

The backdowns on the mining superprofits tax, the mess of the emissions trading scheme and the humanitarian catastrophe of offshore detention are further examples of how Labor's true policy instincts have jellified when confronted by dramatic attacks in the media. The electorate did not turn on Labor due to its policy positions; it turned on Labor because a party that allows its opposition to dictate its political behaviour looks shifty and weak. The leadership problems that beset Labor in office were never about Rudd and Gillard or infighting. They were about a party forsaking policy boldness to instead offer compromise politics as a sop to a public opinion propagated entirely by a conservative commentariat.

Here's some news, Australian Labor: the cranks and their crankers were never voting for you. The swing voters you need are the ones who vote for whomever looks most capable to govern, and until your party find the courage to back its own beliefs, you are not it.