The lack of knowledge about why this has occurred understandable. Rank-and-file ALP members have no engagement with the Socialist International or Progressive Alliance, only those in higher levels of the party bureaucracy do. There is also a historic connection to the Socialist International as it is seen as the global institution of social democracy, the successor to the Second International.
The simple explanation is the Socialist International has ossified and is stagnant. It has become essentially a junket, and attempts to reform it have been blocked. It had amongst its ranks, dictatorial parties in North Africa, until international pressure forced it to act. It is symbolic that the President of the Socialist International is George Papandreou, former PASOK Prime Minister of Greece, and the General Secretary, Luis Ayala, has been there for nearly three decades. The criticism of the organisation has been such that the Socialist International felt the need to publish an open letter in response.
The pivotal moment was the Socialist International Congress held in South Africa in 2012. A pro-reform candidate, former Swedish Social Democrats leader Mona Sahlin, ran against the incumbent General Secretary.
Prior to the Socialist International Congress, a piece outlining the agenda that reformers sought to get adopted was published. The reformers were primarily from European social democratic parties but also included the youth wing of the Socialist International, the International Union of Socialist Youth, which endorsed Sahlin.
One of the main problems with the Socialist International is the lack of involvement from major global centre-left parties such as Indian National Congress, the Brazillian Workers Party and US Democratic Party. It was also a structure conceived in the mid-20th century, centred around parties. Progressive Alliance was conceived as a network that could have complemented the Socialist International and engaged groups (not just parties) outside its traditional sphere.
Despite the pro-reform push, Sahlin lost 36-46 and reform has not occurred. Pro-reform parties have not quit but have reduced their contributions to the Socialist International and/or downgraded to observer status. The pro-reform parties then joined the Progressive Alliance when it launched in Germany in 2013 at the 150th anniversary of the founding of the German Social Democratic Party.
Whether the Socialist International embraces reform is yet to be seen. The financial impact of European pro-reform parties cutting their contributions may cause some change but the Socialist International seems to be trying to offset it by admitting many more members, regardless of whether they are social democratic.
It seems doubtful that in the short-term there will be any reconciliation between the Socialist International and reformers and it is likely that pro-reform parties, such as the Australian Labor Party, will engage with the Progressive Alliance rather than the Socialist International.