A Few Thoughts: Federal Election 2016

Australia’s recent federal election was a very tightly contested one, more so than most polling, commentary and voters expected. As of the time of writing this post, a full week and a half after Australians went to the polls on July 2nd, the vote still has not been fully finalised, with a few seats still in the balance. Though Malcolm Turnbull and the Liberal-Nationals Coalition have been effectively returned to power, with Opposition Leader Bill Shorten yesterday conceding defeat,  their position is a lot more precarious than it was. This is due to having lost a host of seats to the opposition Labor Party as well as to a variety of independents and minor party candidates, such as those of the Nick Xenophon Team.

As a result of the significantly reduced majority in the Lower House, as well as the further increase of crossbenchers in the Senate, most of whom differ significantly ideologically from the Coalition, passing legislation could be a tall order. In particular, passing key budget measures and reducing the budget deficit will prove to be difficult. Unlike the Coalition, much of the crossbench is economically protectionist on issues such as free trade, which will make passing legislation related to these issues difficult for the government. Other key economic measures which Turnbull has championed, including cuts to the company tax rate and changes to superannuation, look set to be either blocked entirely or severely compromised by the Senate opposition and crossbench.

The result also leaves Turnbull in somewhat of a precarious position as leader of the Liberal Party. Though the election has been won, the majority in the House of Representatives is almost wiped out. As a result, prominent conservatives, both within and outside the Liberal party have been questioning Turnbull’s leadership. Leading conservative commentators including Andrew Bolt and Rowan Dean have called on Turnbull to resign, with Bolt claiming that the result proved he was not fit to lead the party and that he had abandoned the party’s conservative voting base.

The election results, though not to the same degree as in the United States and in Europe, highlight somewhat of a disruption the usual political culture in Australia. Crossbenchers and minor parties are steadily gaining influence and seats in Parliament. Overall, there is a slow yet noticeable shift from a traditional two-party system similar to those of the United States and the United Kingdom, with the rise of parties such as the Nick Xenophon Team (NXT) and the re-emergence of Pauline Hanson’s One Nation party. Both the NXT and One Nation espouse economic protectionism, more so than both the Liberal Party and the Labor opposition, with both parties being sceptical of free trade agreements. Both parties also show scepticism towards immigration, particularly One Nation, which argues in its party manifesto against multiculturalism and high levels of immigration, instead arguing for an approach which emphasises assimilation and nationalism. This policy approach from One Nation reflects similar nationalist movements such as those in Europe as well as in America through Republican nominee Donald Trump and his ‘America First’ approach to issues of trade and immigration.

The election results and composition of the House of Representatives and the Senate suggest that the upcoming three years of Parliament will be similar to the preceding three. Given the composition of the Senate in particular, significant reform will again likely prove difficult, with Prime Minister Turnbull needing to do much work with crossbench and opposition Senators in order to pass contentious legislation. However, given that Turnbull in his relatively short time as Prime Minister has already suggested then abandoned several key policies, including tax reform and superannuation reform, it remains to be seen whether Turnbull is able to achieve this.

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The 2016 Federal Election and Double Dissolution

A double dissolution election, scheduled for July 2 was effectively triggered last night after the senate voted down the government’s bill by 36 votes to 34 to restore the Australian Building and Construction Commission (ABCC). As the legislation was blocked, Prime Minister Malcolm Turnbull is now in the position to dissolve Parliament and call an election, in order to break the deadlock in the Senate. Officially, the Government cannot call for a double dissolution before the budget is passed down on May 3 and still serve a full three-year term in the next cycle. All indications are, however, that the July 2 election will be officially called after the budget is passed down. Malcolm Turnbull all but confirmed this to be the case on Tuesday morning.

While rare, double dissolution elections are not unprecedented in Australian politics, having occurred on six separate occasions. The last one of these was back in 1987, with the Hawke government being returned to power. By far the most high-profile example of the double dissolution government, however, was the one called by Malcolm Fraser back in 1975 following the dismissal of Gough Whitlam from office.

Calling an early election is a bold strategy from the Government and carries both benefits and risks in terms of their chances of retaining office for a second term. On the one hand, calling an early election will give Labor and the opposition parties less time to prepare for the election. Calling an early election can also reset the political debate and narrative, which has been going against the incumbent government of late. Polls have shown the gap between Liberal and Labor virtually closing, while Turnbull himself has become significantly less popular as Prime Minister than when he first took over 7 months ago. The decline has been a slow, steady one, as I noted in a previous blog piece outlining the issues facing the Turnbull government back in February.

Re-election for the Turnbull government is no mere formality, however. While Turnbull is favoured considerably as preferred Prime Minister over his Labor counterpart Bill Shorten, polls show that the two parties are neck-and-neck in terms of favourability. Importantly, the trend of the polls, especially in recent weeks and months, is favourable towards Labor. Turnbull has largely failed to deliver on his promises of a reform, policy-based agenda since taking over. In order to reverse this trend, the federal budget due in a fortnight will have to show ambition and vision. Any mis-steps, such as perceived unfairness of the budget or a lack of clarity about the purpose and goals of the budget, and Labor will inevitably pounce, damaging the Coalition’s re-election chances.

Despite these issues, the Coalition should still be considered the favourites for retaining government come July 2. On measures such as the overall economy, taxation and debt, Turnbull is more trusted by voters than Shorten. Crucially, Turnbull still has a significant lead over Shorten as preferred Prime Minister. Though voters are less enthusiastic about Turnbull than in previous months, the electorate still has not warmed to Shorten as a potential Prime Minister. There is also the possibility of a hung parliament to consider, with neither Liberal or Labor having a clear majority to govern. The tie between Liberal and Labor in terms of preferred party is one reason to suggest this might be the case. Another reason, particularly given the election will likely be a double dissolution, will be the probable increase in crossbench senators from the likes of the Greens and the Nick Xenophon Team, taking crucial numbers in the senate away from the major parties. In any case, the election will be a tightly contested one, a scenario thought virtually impossible just a few short months ago.

Turnbull’s Troubles: Why Re-Election is No Longer a Formality

In recent weeks, Malcolm Turnbull and his Coalition Government has had its share of struggles. Numerous things have gone against the Government, from ministerial troubles to policy agenda setbacks. Not so long ago, it appeared that re-election for the Turnbull Government was a mere formality. Fresh from a successful leadership ballot which saw Malcolm Turnbull become the new leader of the Liberal Party and therefore the new Prime Minister, Turnbull initially enjoyed a great deal of popularity, particularly in contrast to Labor leader Bill Shorten, who was struggling with near-record low approval ratings. Yet this initial wave of popularity now seems a distant memory, with Newspoll recently polling the Coalition and Labor at 50/50 on a two party preferred basis.

For all the talk of a fresh, policy-based outlook toward governance, the Coalition so far been found wanting. This lack of policy leadership has been exemplified by the ongoing debate around Labor’s recently introduced policy regarding negative gearing, as well as in the broader debate of taxation and fiscal policy. In terms of taxation policy, Turnbull and the Coalition have ceded ground to Labor. Having put forth few ideas apart from recently rejecting a GST rise after a prolonged silence on the subject, Labor have taken the policy initiative on this front. Labor Treasurer Chris Bowen, by contrast, has released several significant policies, including changes to negative gearing, capital gains tax and superannuation concession tightening among other measures. Malcolm Turnbull has responded to the negative gearing measure by arguing that it would be a ‘wrecking ball’ for house prices and would hurt ‘mum and dad’ investors trying to get ahead. Yet his own Assistant Treasurer Kelly O’Dwyer, went on television arguing the opposite, before retracting her statements shortly after, a gaffe which highlights the lack of a consistent narrative from the government on this issue.

Other setbacks, such as the resignation of ministers, have also not helped the image of the Coalition. Only a few weeks ago, Stuart Robert, then the Minister for Veterans’ Affairs among other portfolios, was forced to resign after it was revealed he had attended a signing ceremony between Australian company Nimrod Resources and a Chinese firm. A conflict of interest arose after it came to light that the chairman of Nimrod Resources, Paul Marks, was a prominent donor to the Liberal Party. This resignation followed the resignation of two other frontbenchers, Jamie Briggs and Mal Brough, forcing Malcolm Turnbull into a second cabinet reshuffle only a few months into his time as Prime Minister.

In the government’s favour is the fact that there are still several months before an election has to be called. Turnbull also stills holds a significant lead over Shorten as preferred Prime Minister and the Coalition is still, albeit narrowly, the preferred party of government over Labor in most polls. For this to continue, however, Malcolm Turnbull and the Liberal Party will have to reverse this state of affairs, and quickly. A consistent and significant policy agenda will need to be developed in order to effectively counter the policy measures being put forth by Labor. The upcoming federal Budget will prove to be crucial in this regard. Turnbull will need to be bold and differentiate himself significantly from Labor as well as from the Abbott leadership which he successfully challenged. Unpopular budgetary measures were, after all, the reason Abbott was challenged and ultimately overthrown as leader. A repeat budgetary performance from Turnbull in current circumstances may well cost him the election, an almost unthinkable proposition when he took over as Prime Minister only a few months ago.