"Labor can change and be that party again. Or it can be the party of Eddie Obeid." Credit:Michele Mossop On this page last week, Waleed Aly wrote persuasively about Labor's loss of that unfashionable but vital commodity: ideology. But that was only chapter one in the explanation of the party's malaise. Chapter two is about Labor's crisis of character and ethics. In an ethical and democratic party, people such as Obeid and Macdonald would have never achieved office, let alone power. If both men had been compelled to seek support among a mass membership, and compete on a level playing field with those who did not have, in Obeid's case, wealth or, in Macdonald's, the blind support of some decent union leaders who should have known better, they would have fallen at the first hurdle. Labor's version of the Old Testament prophet, the former education minister Rodney Cavalier, has been crying in the wilderness for almost 20 years about the democratic deficit inside his party. After every election debacle, those with a vested interest in keeping power - even if it is power amid a smoking ruin - insist that ''we in the party have to stop talking about ourselves''. Their tactic is to deflect. But as Cavalier argues, the structure and processes of the Labor Party are everything because they determine everything. Who will decide the policy? Who will choose the candidates? Who will represent those policies in the electorate? Who will decide the leader who explains those policies to voters?

Only by being a truly democratic organisation, where every member's vote is equal and all MPs - from leader down to backbencher - are required to face a regular ballot of all party members to keep their endorsements, can Labor can restore its ethical base. Only through such a transparent process will Labor again attract people of strong character. One of the party's most serious deficiencies is that its MPs are arguably the most coddled in Australian politics. Many will invoke stories of widowed mothers and hard-scrabble childhoods. But the truth is, from the moment they joined Young Labor and pledged fealty to one of the personality cliques - for they cannot be called ideological factions - they were set. The well-paid job in the minister's office or the union followed, then the seat in Parliament. Now Labor is facing defeat federally and can no longer dispense patronage in NSW, and with many unions financially squeezed, Cavalier is considering opening a book on who among the ambitious Labor youngsters will be the first to defect to the Liberals. Being of Presbyterian stock, there is no money involved in Cavalier's ''book''. From the late 1990s, few state Labor MPs faced party members in ballots for their jobs. But many, such as Macdonald, became vulnerable to, if not reliant on, the Obeids of this world. The former NSW planning minister Frank Sartor told ICAC about how Obeid was trying to coax him into Parliament from the lord mayoralty of Sydney. Obeid thought Sartor could be an ally, even an acolyte. When Sartor joked that he wouldn't mind a million-dollar nest-egg in his bereft superannuation, Obeid allegedly told him, ''I think I can help you with that.''

Sartor knew when to back off - and no doubt remembered why he had spent all those years as an independent alderman fighting Labor's machine. A party that attracts people of strong character, who are prepared to run in impossible preselections, to lose but run again; to contest unwinnable seats, to fall and rise again; and to lose elections because of principle and policy, rather than because of self-made scandal, as in the 2011 NSW election, will ultimately prevail. Labor can change and be that party again. Or it can be the party of Eddie Obeid. Loading Andrew West is the presenter of the Religion & Ethics Report on ABC Radio National. Disclosure: Between 1985 and 1997 he was a member of the Labor Party. Follow the National Times on Twitter