An Evening Before the Election

With a federal election looming by May 2019, and the polls for many months predicting an easy win for the Labor opposition led by Bill Shorten, The Sydney Institute held a seminar evening discussion on Wednesday 6 March 2019. Leading the discussion were Paul Kelly, commentator, columnist The Australian, editor and author and Caroline Overington, Columnist at The Australian and author. The lively discussion canvassed some predictable election results but also offered lively assessments of the state of play between the political parties and their strengths and weaknesses.

AN EVENING BEFORE THE ELECTION

PAUL KELLY

It is a pleasure for me to be speaking at The Sydney Institute again. I want to acknowledge Gerard and Anne Henderson for their immense contribution to our public debate. I also want to acknowledge my colleague, Caroline Overington who is conspicuous for the fresh vision she brings to her contributions.

Let me begin with four perspectives on how I see this national election campaign unfolding.

First, I think this election will see the most substantial policy differences between a government and opposition since the 1993 Keating/Hewson election. This is because the Labor Party in opposition has put forward an agenda of significant change. It means Australia faces “a fork in the road” election – a choice of different directions.

Second, the election follows a chaotic and divisive period of Coalition government. It is a sharp contrast with the previous Howard era. It has seen three Prime Ministers and two convulsive prime ministerial executions of Tony Abbot and Malcom Turnbull. The coalition has been its own worst enemy and in the process many people will conclude it has forfeited its claim to govern.

Third, I suggest we will see further fragmentation of the political system with more attrition in the total primary vote of the major parties, more support for minor parties, breakaways and independents and a poor Senate vote for the major parties. This highlights an ongoing decline of trust. The risk is that this fragmentation will continue to create problems for sound and stable government.

Fourth, I think we are seeing a change in relative political and institutional power in Australia. The Liberal and National parties are in a phase of weakness with remarkably few institutional allies. Labor, by contrast, looks formidable. It is the party of proven campaign professionalism. It enjoys the backing of the trade unions, the support of public sector workers and has much of its agenda reinforced by the powerful superannuation industry funds. Labor also draws on backing from a series of lobby groups, GetUp!, environmental campaigners and education sector professionals.

I suggest the election will test not just whether Labor remains a superior campaigning outfit with more money and more supporters on the ground but whether the wheel of institutional power in Australia is changing against the Coalition.

The election will be held in May as a normal House of Representatives and half Senate election. It will follow the first budget of the Morrison government on 2^nd April bought down by the new Treasurer, Josh Frydenberg.

The parliament is now in a most unusual situation. Scott Morrison is a minority government Prime Minister. He has a majority in neither house. This would be untenable for any lengthy period but this will not be a lengthy period with the Parliament expected to be dissolved in April for the May election. Morrison holds 74 out of 150 seats. One of the many consequences of the August 2018 leadership crisis was Turnbull’s resignation from parliament and the loss of his Wentworth seat to an independent, Kerryn Phelps. The Liberals also lost Julia Banks who resigned from the party and sits as an independent. So, the Liberals lost two seats and the independents gained two seats taking the total number of independents to six.

When the redistribution is taken into account the Morrison government needs a swing towards it in order to be re-elected. Labor needs a swing of about 1.3 per cent in order to form a majority Labor government. For most of this term the polls, on average, have shown a Labor two-party preferred lead of around 53 – 47 per cent. Labor expects to win this election. Indeed the party can barely conceal its hubris. It would be most unusual, perhaps unprecedented, for an opposition to have such a substantial polling lead for so long and not win the election. The government is pessimistic about its prospects and this pessimism on the part of Liberal MPs precipitated the leadership crisis in 2018.

The government has been bedevilled by two sustained negatives. First, Turnbull’s inept 2016 election campaign turned a comfortable working majority into a razor thin margin leaving the government on a knife edge for the entire 45^th Parliament. Second, the government, the Liberal party and the National party, have been plagued by reinforcing divisions. Turnbull and Barnaby Joyce as Prime Minister and Deputy Prime Minister were both replaced this term by Morrison and Michael McCormack. The Liberal Party divisions have been lethal because they were driven not by a single factor but a range of factors – leadership rivalry, personality conflict, policy and political disputes. The Liberal Party may be facing its most serious crisis since its formation by Robert Menzies in 1944.

Turnbull was not able to establish his authority as leader and was never accepted by the conservative wing of the party. He was not a natural leader and had an unreliable feel for public opinion. Despite this, it is by no means clear the Coalition government is in a better position as a result of the leadership change and the polls, to this point, suggest it is in a worse position. The events of last August were confused and farcical. In the end Peter Dutton miscalculated with his challenge, Morrison played a brilliant hand, supporting Turnbull but then lobbying hard once it became clear a change was almost certain, while Julie Bishop, the long-standing deputy was humiliated in the party room vote.

The lesson of the leadership crisis, as usual, is that the unintended consequences of a political assassination are more damaging than assumed at the time. We saw this with Abbott’s removal; we saw it again with Turnbull’s removal.

One consequence is that Turnbull and Bishop, the former leader and deputy, are free agents to criticise the government and party on issues ranging from climate change policy to inadequate female representation.

Morrison’s problem is that he lacks sufficient time to establish himself as Prime Minister. He has great energy and determination but is prone to looking desperate. Morrison has several important qualities. Like John Howard, he is of the Liberal Party with deep roots in the party. Morrison is a community-based politician. He operates at grass roots level dealing with the neighbourhood, small business, the churches, sporting organisations and community groups. He is invariably “in touch”. Morrison is also a values-based politician and will campaign on values. Unlike Turnbull, he is not afraid to wage a negative campaign against Labor. Morrison has declared the Abbott/Turnbull era over and is the best candidate to try to heal the party’s internal divisions and to restore its policy coherence. None of this is to say he will win the election.

Morrison will run a traditional Liberal campaign. On the positive side the economy will be his main message – jobs, investment and economic growth in a dangerous world; there will be tax cuts to help households; on energy he will jawbone against the energy companies to get power prices falling and try to reposition the government on the deadly renewables versus coal issue.

His second theme will be national security in its widest sense – non-negotiable border protection, tough on terrorism, tough on crime, strong on protecting Australia against cyber interference and an emphasis on racial and religious harmony to reinforce a united country.

Morrison will wage a powerful negative campaign against Labor. His message will be that Labor has moved to the Left, that it will appease the trade unions, that it proposes new taxes of more than $200 billion to finance big spending items and that this constitutes a far reaching class warfare redistribution. The negative campaign will focus on Labor’s franking credits policy, Labor’s alleged inability to guarantee border protection and the damaging consequences of Shorten’s emission and renewable energy targets of 45 and 50 per cent.

The great risk for Morrison is the people are not listening and, given the disunity, will not extend the government another chance.

This leads to Bill Shorten and the Labor Party. Shorten has been an under-estimated and lucky Labor leader. His strengths are internal and factional party management, a keen instinct for public opinion and a ruthless populist skill that has been highly effective. Above all, Shorten understood that in this age of insecurity and disruption, it was a blunder for the Opposition to stay static and frozen with caution. He realised this was a time to get radical and populist and attack elites in politics, banks and big business.

Shorten frames a campaign exploiting the public’s fears of inequality and its suspicion the economic system is rigged against ordinary people. He hammers stagnant wages and repeatedly contrasts the plight of ordinary people with the perks and remuneration for the better-off.

Shorten is not a popular Labor leader and has struggled to connect with the public in personal terms. But this is not a fatal defect. The public is prepared to elect an unpopular Opposition leader if it is sufficiently motivated to change the government, witness Abbott’s 2013 election victory. Shorten has been remarkably successful in holding together a broad progressive coalition that spans, on the one hand, traditional Labor working and trade union voters focused on wages, jobs and services and, on the other hand, middle class cultural progressives focused on climate change, passionate about renewables, sexual, gender and racial rights and agitated about refugees. Shorten has been assisted by the fact that political commentary for the last two years has been obsessed with the government’s internal difficulties rather than the Labor Party’s agenda.

The heart of Labor’s policy strategy is its tax agenda. In seeking to increase the overall tax burden, Labor’s aim is to finance its ambitious social spending in health and education and produce a better budget bottom line than the government thereby earning fiscal responsibility credentials. We have to await the campaign proper to assess the success of this strategy. Under Shorten the nexus between Labor and the trade unions is conspicuous with strong support for union priorities – abolition of the ABCC, restoration of penalty rates, support for a higher minimum wage and a superannuation policy that supports the interests of the industry funds.

Under Shorten there is a historic shift in Labor’s commitment to renewables as the spearhead of climate change policy. While a price on carbon was never popular, renewables are popular with polls showing the public supports renewables for clean energy and also, evidently, for lower power prices. Government efforts for two years to discredit Labor over its climate change targets have had little impact. I doubt that energy policy will become the major political plus at the election that many Liberals once anticipated.

In conclusion, Labor has a demonstrated superiority over the Liberals as a campaign fighting outfit. Past history suggests it has more money, superior advertising and more resources on the ground. If Labor has a polling lead going into the campaign proper it is hard to see how Labor will be outmuscled in a five-week campaign. The Liberals face a steep uphill challenge.