Outlook as the Federal Election Enters the Homestretch

June 22, 2016 admin 0 Comments

Many Australians are no doubt breathing a sigh of relief as the Federal Election enters the home stretch. By Australian standards the election has been one of the longest on record – 55 days – and, indeed, the longest campaign in 50 years (the 1969 election campaign ran for 66 days).

While our American cousins might envy such “short” campaigns, most Australians have already “switched off”, if indeed they had even “switched on” at the outset of the campaign. One of the remarkable things about this election campaign is how disinterested the electorate has been. Most people have not been following the campaign or the issues that have dominated the daily news.

Shortened odds

Although Opposition Leader Bill Shorten said at the weekend that Labor was now in a position to win the election, it is not that obvious to professional pollsters that the ALP will form government after 2 July. It would take a four per cent swing to Labor for it to form government in its own right, and that doesn’t seem likely at this point. Well, barring a major mistake by the Coalition anyway.

That does not mean the Coalition will hold the number of seats that brought it to power at the 2013 election. The Coalition holds 90 seats in the House of Representatives to Labor’s 55, with another five held by minor parties and independents.

If the ALP can muster a three per cent swing it would take 10 seats from the Coalition. But this would still not be sufficient for it to form government in its own right. Bookmakers, who are usually more reliable than the pollsters, are giving Labor six-to-one odds of forming the next government.

So, what’s NXT?

However, the “wild cards” of this election are the number of minor parties and independents that are contesting lower house seats. Although minor parties and independents contest a range of seats at every Federal (and State) election, they usually do so with little prospect of winning the seats contested.

But this Federal Election could be different.

The number and unpredictability of many of seats could mean another hung parliament such as the one that followed the 2010 election that resulted in the minority government led by Prime Minister Julia Gillard. For example, there has been some talk of the NXT (Nick Xenophon Team) Party taking a number of seats from both the Liberals and Labor in South Australia. The prospect of this has spooked the Coalition to such an extent that it has brought former Prime Minister John Howard in to campaign in the “at risk” seats – some of which were previously considered safe “blue ribbon” Liberal seats, such as Mayo.

Still, it seems a stretch to imagine a sufficient swing against the Coalition in the House of Representatives to result in even a minority Labor Government. Australians, for the most part, do not want to return to the unpredictability of a hung parliament. Their voting intentions for the lower house will likely harden by polling day and they will likely return the Liberals to Government. According to polling by Roy Morgan, the Liberal Party is likely to hold onto Government, though with a reduced number of seats. The pollster recently said “The elevation of Malcolm Turnbull looks set to payoff in full with Turnbull likely to secure victory at the Federal Election.

A crowded crossbench for the Senate?

On the other hand, we are unlikely to see any major change in the constitution of the 76-seat Senate after the 2 July election. The change to voting for the upper house introduced before the double dissolution is unlikely to give the Coalition control of the Senate. Just 18 senators held the balance of power in the upper house during the previous parliament. Although some minor party and independent senators may lose their seats (e.g., John Madigan and David Leyonhjelm’s positions are looking shaky), NXT could pick up an additional seat, while Bob Day, Jacqui Lambie and Glen Lazarus could all be returned. The emergence of the Derryn Hinch Party creates further unpredictability.

So what does this mean for business and the electorate at large?

Prime Minister Turnbull called the double dissolution because a hostile Senate had stalled considerable legislation, including the Trans Pacific Partnership which would mean freer trade between 12 Pacific Rim countries controlling more than 40 per cent of global GDP. Indeed, the double dissolution was precipitated by the Senate’s refusal to pass legislation to re-establish the Australian Building and Construction Commission (ABCC). It is likely that a similarly constituted Senate after the election would still continue to block much of the Turnbull Government’s “essential” legislation. For example, Senator Xenophon has said he would use his balance of power in the Senate to oppose the TPP and that he would seek to have certain aspects of the Free Trade Agreement with China reviewed.

Australian businesses interested in policy and legislative changes that are positive for expansion, growth and development, such as crucial trade agreements, changes to corporate tax, and issues affecting resources and the environment, for example, will have their work cut out for them. To succeed they would need to counter the populist arguments that many minor parties and independents have been promoting during the election campaign.

Business associations and other lobby groups concerned about the rising populist agenda should not wait until after the election to strategise how to deal with a new senate. The time to gird their loins for battle is now.


Written by Alistair Nicholas, Executive Vice President – Director, Special Projects.