Australia’s election provides no winners. Yet. Indeed, the country is heading toward a long period of political and policy instability, where – as Powell Tate predicted– the Prime Minister, Malcolm Turnbull looks set to be slimly returned a weaker leader of a divided party and the Opposition Leader, stronger.
It would appear that similar factors to those that played into the UK’s plebiscite to “Brexit” the EU were also present in the past weekend’s Australian election. Neither the Brexit outcome nor the Australian election results were foreseen until too late in the piece. Confusion reins with once established electoral axioms no longer relevant.
The Australian voters delivered a reduction in primary votes for the established parties (including the Greens), and a rise in support for independent groups that didn’t exist at the last election just three years ago. Eight of the 150 seats in the lower house of the Parliament, where a majority is required to form government, remain in doubt this morning with the two major parties – the Coalition (Liberal and National parties) and Labor – neck and neck.
Vote counting has been suspended until Tuesday to give the parties time to get their best election scrutineers into the razor-edge seats in question. Political commentators are suggesting the possibility of a hung parliament. If that happens the Coalition may have to form a minority government with the support of minor parties and independents. Coalition strategists are gagging at the thought, while Labor is rejoicing in the mayhem.
On election night another level of counting began – and continues. Viewers were treated to loud, public and overwhelmingly inelegant calls for the Prime Minister to resign from among his own supporters. He unwittingly added to this ugly scene, appearing aloof and out of touch. While he was locked away in his harbor-side mansion, his hard working supporters waited at the Party’s campaign headquarters for him to appear and provide some comfort, or even acknowledgement for his backers who lost their seats. When he did emerge (close to midnight), he looked stunned, wandering in the dark outside his grand manor searching for a car to take him to his people. It went downhill from there, with an angry campaign-like speech that even his own side have labeled ‘unfortunate’.
So it is not surprising that factions within the Coalition are jockeying for solid power positions to deal with the most likely outcome of a Coalition government with a slim majority, and a Senate described by one of its key strategists as a ‘barnyard’. A narrow majority means no joint sitting of parliament to pass the Bills that started this failed double dissolution election strategy.
Should the Coalition win the election – as is most likely – it will still be the loser. It will have to negotiate/schmooze key parties like the emerging NXT group – lead by Senator Nick Xenophon, who rejoices in no longer being a ‘sole trader’ – the Greens, Pauline Hanson’s One Nation (she’s back after 18 years in the political wilderness, including jail for electoral fraud-later overturned). During the election campaign Ms Hanson proudly compared herself to US Republican presidential candidate Donald Trump. In the late 1990’s and early 2000’s, One Nation successfully bled votes from the conservative Liberal National Party in rural Queensland on an anti-Asian immigration, pro-Anglo-Celtic culture, and protectionist platform.
Senator Xenophon, who shares none of Ms Hanson’s views, has said he will not pass the Trans Pacific Partnership agreement. He also wants Australia’s free trade agreement with China to be re-examined to put into it protections for Australian workers. Any negotiations will also have to include some appeasement of Senator Xenophon’s strong anti-gambling stance, as well as support for local defence and home grown heavy industry manufacturing (defence companies take note). Senator Xenophon has loudly bemoaned that the poker machine and gambling lobby funds both sides of politics in Australia, providing cash flow for the powerful RSL clubs that in turn provide grass roots support for Labor and Liberal. This will be a tricky set of negotiations.
With losses of key supporters (e.g., Dr Peter Hendy lost the bellwether seat of Eden Monaro to Labor) a shakeup of the ministry with some old blood taken out and new blood to be brought in seems highly likely. This is despite the PM declaring that the ministry he took to the election will be the ministry of government. Already there are calls for the former PM, Tony Abbott to be given Defence, which enjoys Australia’s first woman minister of that crucial portfolio.
None of this bodes well for the future. Even Prime Minister Turnbull’s days seem numbered, with open talk of what is being termed a “Malcxit”. It is unlikely that Labor, as resurgent as it is, will get the 76 seats needed to govern. It has ruled out a coalition with the Greens, having been there and wrecked that.
Some policy takeouts:
- Superannuation will be back on the table. It was the sleeper policy and regarded by Coalition strategists as the key to losing traditionally safe middle class seats.
- Taxation – the Coalition’s generous tax cuts to business, especially big business, will have to be reconsidered.
- Health – a save Medicare campaign has been bitterly fought and will be hotly debated in the aftermath. The ranks of MPs with a medical background were increased with an experienced paediatrician, taking for Labor the once safe NSW Liberal seat of Macarthur. Infant Formula makers will need to ensure that he is well briefed, given that anti toddler milk campaigns emerged during the election period.
- Defence policy will be closely watched by Senator Xenophon who was more than influential in securing changes to the Future Submarine project for SA. He will have a strong voice ensuring Australian workforce compositions in future projects.
- Industrial relations – The Coalition’s strong anti union campaign didn’t appear to work for them.
- Financial sector reform – measures to enhance protections for clients of financial services companies could see more ominous proposals put to the new parliament.
By Jacquelynne Willcox and Alistair Nicholas
Jacquelynne Willcox is Managing Director of Powell Tate Australia.
Alistair Nicholas is Executive Vice President – Director Special Projects at Powell Tate Australia.