The country's oldest and biggest political movement is being challenged by a rapidly changing world.

Born out of 19th century industrial disputes on Australia's wharfs and in our shearing sheds, for decades Labor has largely focused on the welfare of working class-people.

Those people typically worked in our coal mines, steel mills, abattoirs, and other manufacturing plants.

Trade unions were stronger because legal protection for workers' rights were weak, and union leaders were able to organise in businesses with large workforces.

While the work is never complete, the labour movement has been very effective in achieving its workplace safety, fair pay and job security objectives.

Along the way our economy changed substantially.

The services sector has grown enormously, as has retail. Sadly, many of our manufacturing plants are no longer.

Car manufacturing, textiles, and steel-making are but a few examples of industries which have either disappeared or shrunk considerably.

This is a great tragedy.

This change has challenged the Labor Party in three substantial ways.

First, blue-collar workers no longer feel as dependent on the party for their job security and working conditions.

Second, the workers most likely to feel a need for Labor's protection in the 21st Century work in the retail, health or services sectors.

Third, the gentrification of formerly working-class suburbs in our capital cities has resulted in the rise and rise of the "progressive class" who are more focused on the state of our natural environment than the fortunes of our traditional industries or job security.

While it is always dangerous to generalise, many of these people have little of their own financial security invested in manufacturing, coal mining or the oil and gas sectors.

These progressives are drawn to the Left on voting day.

Their options are either the Greens, or Labor as the major party with the better record on environmental policy.

The emergence of the "progressive class" has created a second base for Labor which now juggles the interests of the progressive class on the Left, with the interests of its traditional blue-collar base further to the Right.

Satisfying the two bases with the right policy balance is not an easy task.

Labor is always the largest political party in the House of Representatives - the Chamber where government is formed by the party that holds the most seats.

But unlike the Liberal and National parties, our task is to secure those seats in our own right.

The Liberals and Nationals say different things during the election campaign, but they then combine under a secret Coalition Agreement to say the same thing once they get to Canberra.

For most of the post-war period, their combined seats have numbered more than Labor's.

Therefore, they've held government more often.

So, Labor's task is a massive one.

To form a government, it must both defeat two parties and balance two competing support bases - the old and the new.

Supporting blue-collar workers in the coal and gas sectors loses votes in inner-Sydney.

Taking strong action on climate change loses it votes in the regions.

This is the point I was making in the podcast.

Labor must work harder at balancing its competing support bases.

It can't win alone without its traditional base, and it can't win without its progressive base.

If it serves forever in opposition, it can do nothing for either base.

So, the right policy balance must be found.

I didn't say the party should split, I said there is a risk it could if we don't find that balance.

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