ELECTION 2025 – THE PARTIES, THE ISSUES, THE PROSPECTS – PRU GOWARD

With just three weeks of campaigning to go, The Sydney Institute invited The Hon Pru Goward, a director of Bespoken Consulting and former Minister for Housing and Darrin Barnett, media and government relations professional and former Labor ministerial advisor to lead a discussion on the issues and party prospects in the 2025 federal election. As the Trump administration provoked global financial turmoil, Pru Goward and Darrin Barnett made their assessments on Monday 7 April 2025 at The Sydney Institute.

ELECTION 2025 – THE PARTIES, THE ISSUES, THE PROSPECTS

PRU GOWARD

Thanks Gerard, and thank you Darrin for that very comprehensive analysis

I thought I would approach this philosophically, and I’d start with the words of the immortal and often misused words of Zhou Enlai, which were, “It’s too early to tell”. Because in the climate we are now in, particularly the international climate, it really is too early to tell.

We are seeing an amazing drop in the Australian dollar that could recover next week; we have a treasurer who’s immediately predicted a 50 point drop in interest rates, which means he’s expecting there to be a recession. When did job losses work for a government? There’s a long way to go before 3 May even though that’s only 2-3 weeks away, as we’ve just been discussing.

The Coalition comes into this campaign with history not on their side. The last time a first term government was tossed out was in 1931, and for very good reason. It had nothing to do with whether or not you’re going to give this tax grab or this tax take. It’s more to do with the attitude of Australians to three year terms: Australians are wont to say three years is not long to be in government, particularly after nine years of another government, so you need to give the new lot a longer go than three years. Australians think that three years is not long enough to really test a government. Nobody really thinks there is any other option but that we would see the return of the Albanese government.

The fact that the polls are where they are, given that history, is an extraordinary recognition of how much this government has struggled despite it has all that going with it. And, while now it is nothing like 1931, we certainly are living in a period of extreme economic uncertainty. At the flick of President Trump’s switch, the world trading system has changed in extraordinary ways. In my heart, I am not convinced that 10 per cent is a very significant tariff to impose on Australian exports to the US. I also understand Trump’s point about all the non-trading barriers that the Americans, in their naivety, have tolerated. The Europeans are so clever at playing all those little non-tariff trading barriers. We’re quite good too.

So, despite that personal reservation, I think we are living in a period where people have a great sense of economic crisis, as the recent collapse in the share markets has demonstrated. In my view, that collapse was not justified entirely by tariff changes. To me it is more a reflection of the methodology, the analysis and the rhetoric which accompanied them, which have been so incoherent, disruptive and puzzling. That’s what has driven the markets to react so strongly. For all that, they can just as quickly come back. Markets are very variable; the result of the reactions, logical and illogical, of human beings. People will also sell shares applying formulas which tell them when to sell.

The fact is that the world is in an unprecedented period. After 30 odd years of the mantra of free trade, suddenly we’re seeing the biggest economy in the world wanting to challenge that. People are uncertain, and uncertainty always plays to the incumbent. This is particularly so when the uncertainty is created by the conservative side of politics. It’s obviously going to favour the other side, in this case the current Labor government.

As you have suggested Darrin, Albanese is a lucky guy. He was lucky to get COVID in the first election, so he didn’t have to speak for a week, which meant that we didn’t pick up on errors as we might otherwise have done. And he’s been lucky this time, because there is this mood of fear driven by what the markets are seeing in the Trump reforms, or changes.

The other thing is, of course, that there is a looming sense of a security crisis. From every pollster I’ve spoken to, this is not being picked up in the polls yet. People are conscious that the Chinese navy is circumnavigating Australia whenever it feels like it, and that there are big shifts in global politics and global alliances and big challenges, even to a country like Australia, which has always had a very simple foreign policy. There is apprehension that this is all about to change, and Australia might actually have to come into its own and stand much more on its own two feet and not rely on its historical alliances.

Two things explain why, despite this, the polls are so close. As Darrin said, until quite recently the odds were on a Coalition minority government, and slightly longer odds on a Coalition majority government. Those two features were driven by some of the Albanese government’s reforms not being appealing – the fact that it didn’t bring down electricity prices when it said it would. Chris Bowen is an alarming figure. And while industrial relations has historically been seen as a Labor strength, the extent of the current round of Industrial Relations reforms are just starting to hit the building industry. Within the next year or so, we will see the full force that they have.

Let me give you an example. I was at a conference earlier this week where a senior human resource manager advised the audience that, in the last year, the unions had rejected every employer proposal during the current round of EBA negotiations. This is apparently the result of a new clause in the Fair Work Act, which says that if you can’t come to a settlement within nine months, then this so called “protracted dispute” goes to the Fair Work Commission for determination. And, as we know, the Commission is generously endowed with Labor appointments. The unions obviously believe they will get a good deal. So, although traditionally, people have always seen the labour movement as rather benign, and Labor’s industrial changes as benign, this new round of industrial relations changes is alarming. It could well see the beginning of the end of our biggest industrial sector, building and construction.

But what is the big issue in this election? Of course, it’s cost of living, cost of living, cost of living. And that is why Peter Dutton did so well last year, and that is why he was so contestable until only a month ago. Because one thing everybody understands is what’s going on in their hip pocket. And every Australian knows that they are worse off than they were a year ago. But the uncertainty both internationally and economically has been very fortunate for the Prime Minister. And, in a week’s time, President Trump may decide that he’s gone far enough and he’s going to change his mind entirely on tariffs and a whole lot of other things; uncertainty continues. Electorates are unwilling to change government in times of uncertainty.

This is an election of a kind I’ve never seen in my lifetime. An election in which most of the levers are being pulled by international actors with Australian governments unable to do a lot about any of it. Except not to overreact.

We have a long way to go, but I do think history has always been on the side of a first term government being returned. But it’s a febrile environment. The Prime Minister is only going to need to make a couple of mistakes. The Opposition’s only going to need to ride a couple of things like unemployment, or further wage increases which people can’t afford, to increase their momentum. There’s only going to have to be another round of insolvencies and people losing their jobs. If there’s much of that I think the climate will change enormously, but I doubt this will happen in two weeks.

The worst thing for Australia, at this time, would be a minority Labor government. The Teals and the Greens are populist. How amazing that Jacqui Lambie has suddenly discovered a sense of responsibility, when really most of those people on the cross benches only survive because they vote for anything popular. They never vote for anything hard. I have never known an independent to back anything difficult, and why would you? You’re never going to be in government, you never have to make a decision. All you need do is remind people of how good you were in supporting what’s good and disappear in a puff of smoke when something bad happens.

The result could be a Greens Labor government. But it depends on how many Greens seats are lost in Queensland. There’s a prediction of up to three, one for Labor and two for the Coalition, but it might not be that. The second option is a coalition between Labor and the Teals, or the Coalition and the Teals. But if you think your country is in trouble now, the last thing you need is a populist government that works day and night to keep its votes in the parliament, instead of working day and night to keep the country afloat.

Productivity in Australia has never been worse. Major markets are shrinking as our output of everything that we do well is being limited and restricted by a whole lot of factors, including concerns about production of gas, mining and its pollution, together with a lot of IR reform, so-called, that has made us more and more uncompetitive. So, the last thing we need is another three years where populism sways the day. Minority government will never deliver the reforms we so badly need.