2019 Federal Election Update #4

2019 Federal Election Update #4

MORRISON’S MIRACLE

Last night saw the greatest post-war boil over in Australian federal elections when the Morrison Coalition Government was re-elected.

A couple of weeks ago, we mused that it was feasible that Scott Morrison could execute a Steven Bradbury come-from-behind surprise win. It actually happened and the nation is still in a state of shock.

Labor has paid a heavy price for political over-reach and will now have to rethink its big tax and wealth redistribution agenda and possibly scale back its ambitions on climate change.

Changes to negative gearing and capital gains tax on the housing sector are almost certainly dead, as is the ill-fated retiree investment tax credits policy.

Last night’s result is an extraordinary reverse echo of 1993’s unlosable election, when John Hewson’s Fightback! manifesto tanked in spectacular fashion, the Prime Minister has beaten an opponent running on major new taxes that threatened voters’ hip pockets and tapped into punter fear about jobs and the economy.

In some respects, though, this is worse than 1993 because Labor didn’t see it coming. Labor couldn’t get its national primary vote out of the 30s and Pauline Hanson and Clive Palmer played havoc with preference flows to Labor. The polls got the two-party-preferred vote badly wrong.

At close of counting last night it looks like the Government has 74 seats, two short of a majority, versus 65 for Labor. Of six seats still in doubt, the Liberals are ahead in two of them.

Labor’s big taxing, big spending vision was comprehensively rejected in most places other than Victoria. The rejection was especially ferocious in coal-rich Queensland which is now a virtual LNP fortress thanks to the Adani issue. However, the reaction from Sydney’s mortgage belt, in the resources capital Perth, and in regional Tasmania shows the Labor message of radical income redistribution fell flat with many audiences.

A come from behind win that smashed the bookies

This election will be remembered for how wrong the bookies got it. Some had paid out early on an ‘inevitable’ Labor win with Labor almost odds on favourites and the Coalition blowing out in betting over the final 48 hours.

Then there was the sad passing of Bob Hawke on the eve of the election which was meant to be the final nail for the Coalition. It clearly didn’t translate.

While many are arguing the outcome was a rejection of Labor’s policy platform, others (including John Howard) have suggested it was more a rejection of the class warfare rhetoric. In post-election interviews, Mr Howard has noted that Australians regard themselves as egalitarian and running a class warfare campaign simply did not resonate. In that sense, the passing of Mr Hawke may have only served to remind the electorate that supporting aspiration and governing for all, as he did, remains really important.

Whatever the contributing factors, what is clear is that the big target strategy in Australian politics is now stone dead. Don’t expect the next Opposition Leader to show their hand in the way Bill Shorten did in seeking a mandate for sweeping change. Over 65s, fearful of the franking credits issue, appear to be a major factor in Labor’s loss.

Scott Morrison is now a Liberal hero in the pantheon forever. The PM fought this as a personal campaign, sticking determinedly to his economic management messages and attacking Labor’s taxes as the wrong policy amid worsening global economic conditions. He brought the party back from the death, out-campaigned Labor and steadily overtook them. It is an amazing result for a man who came to the job less than a year ago in dire political circumstances.

He will have huge authority and will be able to set his own course, free of former leaders looking over his shoulder. However, he will have to deal with an array of issues including most importantly a slowing economy and a range of issues such as energy, water and climate change that were factors in some parts of the electorate including Independent Zali Steggall’s triumph over Tony Abbott in blue-ribbon Warringah.

The numbers

With 74% of votes counted, the Coalition has captured 41.5% of the national primary vote against 33.3% to Labor, with a national swing to the Coalition of 1.5%. However, the LNP swing was some 4.7% in Queensland, dwarfing the 1.6% swing to Labor in Victoria. Rather than switching to Labor, many disaffected voters parked their vote with Pauline Hanson’s One Nation or Clive Palmer’s United Australia Party. Palmer spent a reputed $60 million and didn’t get elected but ensured the Coalition had a winning preference flow.

Key contests

The Coalition won back Lindsay in NSW, Bass and Braddon in Tasmania, and Longman and Herbert in Queensland. Meanwhile, Gilmore on the NSW South Coast was the sole confirmed Labor gain last night. The Liberals may also unexpectedly take the marginal Blue Mountains seat of Macquarie or even WA’s Cowan off Labor, and they are still ahead in Chisholm and Boothby fighting off Labor challenges. Labor does not look like it was able to make any dents in WA despite believing Swan and Hasluck were in prospect.

There were some unexpected individual seat results. There was a 5.4% swing against Labor in retiring former Treasurer Wayne Swan’s Queensland seat of Lilley with Labor currently ahead by a whisker. In the previously safe Newcastle seat of Hunter, Shadow Agriculture Minister Joel Fitzgibbon suffered an unexpected 9.6% swing against him with One Nation picking up 21.4% of the primary vote, the highest in the country. Despite this, Labor looks likely to hold the seat.

Independents

It was a big night for Independents. In addition to Zali Steggall, Helen Haines is looking likely to be elected to succeed Cathy McGowan in Indi in country Victoria. Wentworth is still in doubt with Kerryn Phelps narrowly ahead and Dave Sharma relying on prepolls to get over the line. This group could hold the balance of power players if the Government falls short of a majority.

Warringah

There has been some myth making about the outlier Warringah result being due to external intrusion by the activist group GetUp. In fact, there was a strong local mood against the long-standing MP due to Liberal Party disunity, same-sex marriage, climate anxiety and irritation that the electorate has been neglected. A grassroots campaign was driven by locals including a cheery Manly surf shop owner. The result and what it says about so-called safe seats is something for the Government to ponder as it seeks to craft policy positions that straddle widening voter divides.

Senate

It looks like the Coalition has picked up two extra Senate spots. It won’t be enough to deliver a Senate majority, but it has reduced the size of the crossbench that needs to be negotiated with. Former One Nation Senator Fraser Anning appears to have lost his Senate seat while, as noted above, Clive Palmer’s United Australia Party does not appear to have won a seat. At the same time, Jacqui Lambie returns as does Greens Senator Sarah Hanson-Young. At this stage the numbers are: Coalition 34; Labor 27; Greens 9; One Nation 2; Central Alliance 2; Jacqui Lambie 1; and Cory Bernardi 1.

Way forward

Scott Morrison is relatively unencumbered by promises in this election, as part of the role reversal that saw him stay a small target. However, there are issues the government will now need to deal with.

Senator Arthur Sinodinos commented last night that the Coalition would have to look at new policy areas including energy and water and look at the starkly differing views in parts of the country. He noted there is more work to be done on energy reliability and supporting the transition to renewables.

Shattered

Labor is feeling shattered. This is a huge let-down and missed opportunity. The bloodletting has started with Bill Shorten stepping down as leader. There will be deep recriminations about how the party managed to misread the public mood.

What’s next

The votes are still being counted, with a number of important seats yet to be called. We will keep an eye on these results, the Labor leadership battle, and any announcements from the returned Morrison Government and provide another update next week.

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