Labor has held the Victorian seat of Batman, with the ALP’s Ged Kearney leading the Greens’ Alex Bhathal 52-48% on the two-party vote with almost two-thirds of the votes counted.
Hanging onto the seat, which is in Melbourne’s northern suburbs, is a big relief for Opposition Leader Bill Shorten, especially given his risky move of announcing in the last week of the byelection campaign his plan to scrap cash refunds for excess dividend imputation credits.
Shorten told jubilant Labor supporters: “Labor is back in Batman. From the bookmakers to the commentators – they wrote Labor off in Batman and you have proved them wrong.”
Kearney said: “This is a victory for true Labor values”, and “Labor is on its way to a Shorten government”.
Both Shorten and Kearney said they had heard the messages from the electorate.
The Batman result came as in the South Australian election, the Liberals won a majority in their own right, defeating the Labor government, which had held office for 16 years. The much-vaunted bid by former senator Nick Xenophon to gain the balance of power for his SA-Best party proved a fizzer.
As the campaign wound up, Labor robocalled voters in Batman to stress that most of those affected by the proposed tax change would be people on high incomes. The byelection result will to some extent be a counter to government’s fierce criticism of the policy.
The failure to wrest Batman is a big setback for the Greens, who were buoyed last year by their victory in the state electorate of Northcote, which is within the federal seat.
On the figures late on Saturday night, there was a two-party swing of more than 1% to Labor from the last election.
Kearney had more than 42% of the primary vote, while Bhathal was on a primary vote of about 41%. There were ten candidates in the field but the Liberals did not run.
The Greens nearly took Batman in 2016 from the ALP’s David Feeney, a right-winger who was very unpopular in the electorate and had a bad campaign. The byelection was caused by Feeney’s resignation in the citizenship crisis.
Kearney, former president of the Australian Council of Trade Unions and from the left, was generally regarded as a very good candidate who was an appropriate fit for what is seen as a “progressive” seat. In the electorate during voting on Saturday, Shorten said Kearney “has done wonders to lift confidence in Labor in this electorate”.
Conceding defeat, Bhathal said: “I’ve always said regardless of the result we would have a strong woman member from a caring profession”.
Bhathal was making her sixth tilt at the seat, which had been moving toward the Greens previously, as its southern part gentrified. But the Greens campaign was marred by bitter internal controversy over Bhathal’s candidacy, with Greens dissidents lodging a formal protest about her, accusing her of bullying.
The Greens campaigned strongly on the proposed Queensland Adani mine, an issue Shorten struggled with as he sought to stop votes haemorrhaging to the Greens.
Shadow Treasurer Chris Bowen will target tax loopholes and concessions in a speech on Monday, arguing that the economic case for budget repair has never been stronger.
Countering government criticism of Labor’s proposed crackdown on concessions, Bowen will say an important part of sensible fiscal strategy is to identify tax concessions that “eat away at the revenue base” and reform or abolish them, so as “to underpin both budget repair and the funding of new initiatives”.
The opposition has announced moves that would hit negative gearing, capital gains discounts, and trusts.
Bowen says in his speech to the Per Capita think tank – released ahead of delivery – that failure to reform negative gearing and family trusts will put increasing tax pressure on low- and middle-income earners.
He says analysis by the Parliamentary Budget Office shows that for the middle income quintile, with people earning A$46,000, average tax rates are set to rise more strongly than for any other group.
“Every dollar not recouped through winding back these loopholes and concessions is another dollar that Australian workers will have to shoulder.”
Bowen says that instead of closing loopholes and strengthening the tax base, the government would prefer to increase income taxes by $44 billion, hitting all workers earning more than $21,000.
“At a time when wages are growing at record low rates this is a tax hit that will see someone earning $70,000 with $350 less in their pocket from next year.
“Meanwhile the tax base remains full of holes and tax concessions and other loopholes go unreformed,” he says.
“Using an infamous metaphor of the treasurer’s, the government has barely even taken a scalpel to tax concessions which largely accrue to wealthier Australians”.
Half of all the benefits of negative gearing accrue to the top 10% of income earners, as do 80% of the benefits of capital gains, and trusts are used as income-splitting tools by high-income earners, Bowen says.
Labor’s planned negative gearing reform would be good for the budget as well as for first home buyers, he says. By the end of decade Labor’s negative gearing and capital gains tax reforms would together be adding $8 billion annually to the budget.
Bowen attacks Treasurer Scott Morrison over the “ridiculous argument” that the company tax cuts are funded because they are in the budget.
“Simply ensuring that the budget bottom line reflects the cost of the tax cuts does not mean they are funded. The fact is that the budget would be $65 billion better off over the decade if the [company] tax cuts weren’t proceeded with.”
Bowen says Morrison undermines his own argument that Labor did not fund the NDIS. “Of course NDIS and the Gonski schools funded model were both reflected in Labor’s budgets. Putting aside the fact that Labor in government made other cuts and revenue decisions to fund both initiatives, even if we hadn’t, by the treasurer’s logic, they were funded because the budget bottom line reflected them.
“The treasurer has killed his own scare campaign on NDIS funding.”
This $65 billion tax cut “puts the medium term budget at risk”, Bowen says. At the end of the plan’s proposed ten years, the tax cut would be costing an annual $15 billion. “It is a fiscal ram-raid.”
So far the government has only been able to legislate the cut for firms with annual turnovers up to $50 million. The Senate has not agreed to the reduction for big companies. Labor has said it accepts the cut for firms with turnovers up to $2 million but has not announced yet what it would do about the legislated cut for firms with turnovers between $2 million and $50 million.
“Labor believes in strong fiscal policy and return to surplus and we are prepared to make the tough decisions to do it,” Bowen says.
“I believe in the return to surplus when conditions allow because locking in the AAA rating reduces borrowing costs and gives more room to fund important social initiatives.
“The progressive case for return to surplus also recognises that this would give me and future treasurers more room to move if we face another global downturn.
“The economic case for budget repair has simply never been stronger.”
Bowen says Labor’s policy work has been thorough and he promises “more detailed policy announcements” to come.
“We’ll continue to outline our plans from opposition, seeking a mandate and the moral authority in government to do big and important things.”
Malcolm Turnbull’s lead over Bill Shorten as better prime minister has narrowed to two points in Monday’s Newspoll in The Australian.
In mid-February Turnbull led 40-33% on this measure; now he is ahead by just 37-35%. In face of continuing bad polls, the Liberals have always taken heart that Turnbull does better than his opponent in the head-to-head comparison, so the tighter margin will inevitably be of concern to them.
The Australian Labor party will scrap a system that refunds more than A$5 billion a year to low or zero tax paying investors, should they win government.
“Franking credits” are designed to stop tax being paid twice on Australian corporate profits, allowing shareholders a credit for the tax paid by the company. But when shareholders don’t pay taxes at all they can claim a cash refund for unused credits from the tax office.
Scrapping cash refunds on unused franking credits could make the tax system fairer according to Danielle Wood, Brendan Coates and John Daley from the Grattan Institute.
But according to Gordon Mackenzie from UNSW, these cash refunds incentivise people to invest in Australian companies, and ending them could see super and self-managed super funds, in particular, pulling their investment from local companies.
Labor proposes to abolish cash refunds of unused franking credits for individuals and superannuation funds. Not for profits and universities, which do not pay income tax, will continue to receive cash refunds for franking credits.
A piecemeal move towards a fairer tax system
Danielle Wood, Brendan Coates and John Daley, Grattan Institute
Labor’s proposal is not comprehensive tax reform. But in the absence of that holy grail, it is a piecemeal move towards a more equitable tax system. The change will primarily affect wealthy retirees.
The wealthiest 20% of retirees own 86% of shares held by older Australians outside of super. And among self-managed superannuation funds (primarily held by wealthier retirees), half of the refunds are currently going to people with balances over A$2.4 million.
Abolishing cash refunds for individuals and superannuation funds will raise about A$5 billion a year in extra revenue. About 33% will be paid by individuals (mostly in high wealth households), 60% will be paid by self-managed superannuation funds (typically held by wealthier retirees), and the remaining 7% will be paid by Australian Prudential Regulation Authority regulated superannuation funds.
Cash refunds on franking credits were introduced in 2001 for shareholders who had more franking credits than the tax they owed. The theory was that people with no or low income should have the same incentives to invest in Australian companies as other investors.
At the time, the decision cost the budget little – around A$550 million a year – because very few people with low income also owned shares.
But new superannuation rules in 2006 relieved retirees from paying any tax on their superannuation withdrawals. Retirees also pay no tax on their super fund earnings. As more people with significant super balances retire, an increasing number qualify for cash refunds on unused franking credits.
And a series of changes to the Seniors and Pensioners Tax Offset increased the proportion of over-65s paying no tax on earnings outside of super.
The cash refund system now costs the federal budget more than A$5 billion a year. But abolishing cash refunds on dividends won’t be costless.
The franking credit regime was set up for a variety of good reasons. It aimed to bias Australians towards investing in Australia. In practice this appears to have led to Australian companies being funded more through equity and less through debt, improving financial stability.
In theory it would also lead to more physical investment in Australia, although there is less evidence that this has happened.
In practice, franking credits also encourage Australian companies to pay dividends rather than inefficiently hoard cash or invest in low-return projects.
So abolishing cash refunds, but keeping franking credits for those who do pay income tax, is probably not the ideal policy. It abandons the principle that all company profits should be taxed at an investor’s marginal rate of income tax. And it reduces the incentive for retirees to invest in companies from Australia rather than overseas.
On the other hand, the decisions not to tax superannuation withdrawals and to increase the effective tax-free threshold for older Australians have led to wealthy retirees contributing very little to government revenues relative to younger households.
In an ideal world the federal government would reintroduce a number of higher income and wealthy older Australians to the tax system by taxing superannuation earnings and abolishing age-based tax rates. But in the absence of the political will to make these changes, abolishing cash refunds provides a big boost to the budget bottom line from more or less the same group.
The changes could bring distortions to investors
Gordon Mackenzie, Senior Lecturer, University of New South Wales
Chasing franking credits is one of the few tax issues that super fund investment managers take into account when investing, and is a significant consideration for self-managed super funds, according to my research with Professor Margaret McKerchar.
As the previous authors mention, franking credits are intended as an incentive for certain investors to invest in Australian companies. Under the rules, super funds and self-managed super funds don’t pay tax when they are paying a retirement pension, if the account balance is below a certain level.
Since they pay no tax, it is worthwhile for these funds to invest in Australian companies that will pay franking credits. Doing so allows them to claim credits from the tax office.
But this also means that if cash refunds on franking credits are done away with, it is an implicit 30% tax increase on super and self-managed funds that invest in Australian companies. This creates an incentive for them to put their money elsewhere.
If these funds invest in something like a government bond then they will pay no tax on the profits. If they invest in an Australian company, the company will pay the corporate tax and there will be no way for super funds to claim the tax back.
Many self-managed super funds have accounts for paying a pension to the member and another account for accumulating funds, but not paying out anything. Self-managed super funds will likely replace Australian shares in their pension accounts with assets such as bonds or managed funds.
This is important, as data shows that Australian shares are one of the largest asset classes held by self-managed super funds, ranging between 21% and 30.8% of the entire portfolio, depending on the size of the fund.
The response of other types of superannuation funds will probably be more muted. While they do value imputation credits, they also care about diversifying their portfolios – there will still be benefits to holding some Australian shares.
Overall, then, imputation credits are important to superannuation funds, both big and small. The refund not only makes certain types of investment attractive, but also drives how much is invested in that type of investment.
An “old” government, an opposition leader many people find lacklustre, and a popular centrist player adept at exploiting discontent. That’s the confusing choice facing “soft” voters in next Saturday’s South Australian election.
In focus group research last week, participants were divided over whether South Australia – which often sees itself as the poor relation among states – is headed in the right or wrong direction.
On the positive side they noted the technology industries, renewable energy, and defence contracts. But then there is the pain – the decline of manufacturing, lack of jobs, low wages, high cost of living, and many young people leaving the state.
Four groups of nine to ten “soft” voters – people still to decide how they will vote – were run on March 7-8, two each in Adelaide and Murray Bridge, a regional city of some 20,000 population. The work was done by Landscape Research for the University of Canberra’s Institute for Governance and Policy Analysis.
There was a mix of gender, age and socioeconomic backgrounds. In Adelaide voters were drawn mainly from the marginal Liberal seat of Hartley (where SA-Best leader Nick Xenophon is running) and Dunstan (also marginal Liberal, held by Opposition Leader Steven Marshall). Both seats are within federal cabinet minister Christopher Pyne’s seat of Sturt.
Murray Bridge is within the state seat of Hammond (safe Liberal); it is located in the federal Liberal seat of Barker, which saw a strong Nick Xenophon Team vote in the 2016 federal election.
Among the election issues, health – including the cost and teething problems of the new Royal Adelaide Hospital – was a prominent concern for these soft voters, especially older ones.
The plight of the Murray River and the management of the Murray Darling Basin resonated in Adelaide as well as obviously in the river city. For the regional voters, inadequate public transport servicing Murray Bridge (cost and availability) was important.
Across all groups, a common catch-cry was that “the government should do more to keep young people here” in South Australia.
Premier Jay Weatherill was seen as the better performer during the campaign, when compared with Marshall.
Weatherill, premier since 2011, was perceived as the stronger leader of the two; he has to a degree escaped the blame for South Australia’s decline that is directed at the 16-year-old government.
“He speaks with more authority than Marshall,” said an older Adelaide voter, while an older participant in Murray Bridge thought “the current mob have given us a clearer idea of where they want to take the state than the Liberals”. But there was as well a strand of criticism from the older cohort – that Weatherill is “weak” and “insipid”.
Among the soft voters there was also a compelling sense of “change for change’s sake”, as one participant put it. “Labor has been in power long enough,” said a retiree; another wanted “new faces”.
Going against Weatherill is that, while he was seen as the better political performer, many of these soft voters had no great regard for him or his record in government. “Weatherill is just coasting along on what he thinks he has achieved and bullying tactics,” was the view of one Adelaide participant.
While many soft voters didn’t think Labor deserved re-election, they were hesitant about the Liberals under Marshall.
“If you look at Marshall, how can you ever call him a leader?” said an Adelaide real estate agent, while a retiree said: “He hasn’t imploded yet but that could happen any day given past experience with the Liberal Party”.
Xenophon was regarded widely as standing up for South Australia – several of these voters could spontaneously bring to mind examples of this.
He was seen to have run a “positive” campaign, in contrast to the major parties – this adds to his appeal when soft voters are disappointed with the sniping of the big parties, with which they are deeply disillusioned anyway. People judged the major parties were worried about Xenophon by the fact they were attacking him. “Both parties are seeing him as a real threat and are putting the boot in,” said one participant.
Xenophon, who started his political career as an anti-pokies campaigner, has adopted a pragmatic approach on the issue at this election. Some of these voters regarded this as selling out and becoming “just like the rest”, but for others it was a sign he understood “the need for compromise”.
The Hotels Association campaign against Xenophon has penetrated people’s awareness but also to a degree appears to have backfired, with some of these voters taking the view this was a “big lobby with deep pockets” targeting him for their own nefarious ends.
Soft voters, reacting against the major parties, are attracted to the idea of Xenophon’s party having the balance of power as an antidote to their disillusionment. For those leaning toward voting for SA-Best, it represented a genuine alternative to the majors.
On the other hand, there was some disappointment with Xenophon. His hokey election advertising had not impressed the critics, and they viewed him as superficial. “He’s been exposed when he’s tried to be serious,” said one; another said: “People are beginning to understand Nick is just a showman”.
In Adelaide, SA-Best was seen largely as something of a one-man show, with not much in the way of policies, its attraction being as a vehicle for a protest vote rather than for what it represents in positive terms.
There was also the issue that while Xenophon was a household name, outside the seat of Hartley his supporters would be voting for candidates who were often unknown quantities. As a young Adelaide voter put it, voting for SA-Best was “an awesome gamble”.
In Murray Bridge, a relatively small community, SA-Best has fielded a candidate described in the discussion as a “strong young woman” and the competition appears fierce, with Liberal incumbent Adrian Pederick facing a serious threat.
Participants acknowledged upsides and downsides in the prospect that SA-Best might hold the balance of power. An older Murray Bridge voter said it would “take the arrogance out of decision-making”. But another feared it would mean “South Australia will be stuck in quicksand, no movement, mired”.
Unlike quantitative polling, focus group research has no statistical validity. But for interest, here is the vote-leaning breakdown of these soft voters, in the penultimate week of the campaign.
Of 38 participants in total, eight remained firmly undecided. Of those who could say to which party they were leaning, the Liberals and SA-Best were neck and neck on 11 and 12 respectively, with five leaning to Labor and two thinking of voting for an independent or party other than these three. The Liberals fare more strongly in Adelaide seats, while SA-Best is the frontrunner in Hammond.
Notwithstanding their own leanings there was a feeling among some soft voters that Labor might win “by default” because Xenophon would split the Liberal vote and “people will forget the crap”.
Prime Minister Malcolm Turnbull handled the Barnaby Joyce affair badly and his ban on ministers having sex with members of their staff is risible, according to “soft voters” in focus groups held last week.
The research, done ahead of the South Australian election but canvassing views about the federal leaders as well as state issues, also found people critical of Bill Shorten, especially disdainful of what they saw as his “opportunistic” position on the Adani coal mine in Queensland.
Four focus groups each of nine or ten “soft” voters – those who had not decided who to vote for in next Saturday’s election – were conducted on March 7 and 8: two each in Adelaide and the regional city of Murray Bridge. The work was done by Landscape Research on behalf of the University of Canberra’s Institute for Governance and Policy Analysis.
These soft voters, meeting on the heels of Turnbull’s Newspoll slump in the wake of the Joyce affair, believed Turnbull misjudged the public mood on the issue, didn’t handle it well, and let it drag on to become much more of a distraction than it should have been.
“I didn’t think it was even any of his business to be quite frank,” a 61-year-old male real estate agent said. “He wasn’t even in the same party.”
Many soft voters wonder why Turnbull didn’t simply get Joyce to keep his mouth shut.
A retired man in Murray Bridge said that “publicly dissing Barnaby … was bad”, while a customer services manager from the town thought “he should have got rid of him quicker”.
As for the sex ban: “That rule about no bonking in parliament was an absolute joke,” an Adelaide male security office declared, while a social worker in Murray Bridge thought it “probably inflamed the situation”.
A young woman from retail was sceptical about implementation. “It’s going to happen. They can’t stop it.”
A retired female cook summed up the cynicism: “I mean, for goodness sake!”, while another woman said: “At the end of the day does it really matter? Just focus on what you need to focus on and stop focusing on people’s sex lives.”
When it comes to representing Australia on the world stage, these voters prefer Turnbull over Shorten. But more generally, many see Turnbull hamstrung by his party, weak and wishy-washy because he can’t free himself and be true to his own beliefs.
There is a strong sense that Turnbull’s perceived lack of leadership has let down many voters who expected big things from him.
“There’s no passion anymore,” said an Adelaide pensioner. A retired male teacher thought he was “not a conviction politician. You don’t feel he’s got a set of beliefs.”
An older Murray Bridge participant struggled with the gap between Turnbull’s words and actions, as shown by recent events.
“He comes across as a very decent sort of man. He made a statement at the beginning of the year about his aspiration for things to be better in parliament. And then we have Michaelia Cash getting out of her tree and he virtually starts making excuses for her, and then we’ve got Peter Dutton and a couple of other ministers being very, very personal about the marital affairs of others, and he lets all that happen in spite of what he’s already said.”
Given Turnbull is seen as still preferable to his opponent, soft voters would like him to improve and “act like a leader”, and especially to gag the voices behind him, who they regard as undermining him.
But there is doubt that he can break through. A young male factory worker thought “he’s had too many scandals in his party and it’s starting to take effect on how people see him. Like, he has no control over his party. And people are thinking, maybe he’s not cut out for the job.”
Shorten is seen as having sat back and gloated at the government’s troubles. But there was a surprisingly high unprompted awareness of his “opportunistic”, “two-faced” position on Adani. Shorten’s union association also lingers in people’s minds.
A young Adelaide bank worker observed: “Recently he went up to Queensland and said he was in favour of the Adani coal mine and then he was in Melbourne and said he was against the coal mine. Flip-flops.”
Another Adelaide voter parodied Shorten’s statements on the project: “Yeah but, yeah but … we won’t tear the contract up but …”
For both leaders, these soft voters have become an unforgiving lot – which in part explains the attraction of casting a protest vote.
The Victorian election will be held on November 24, and the New South Wales election in March next year. Newspolls have been conducted in these states in February and early March from samples of 1,268 in Victoria and 1,526 in New South Wales. Labor led by 52-48 in Victoria, and was tied 50-50 in New South Wales, a one-point gain for Labor since February to March 2017.
In Victoria, primary votes were 39% Coalition, 37% Labor, 11% Greens and 6% One Nation. The last Victorian Newspoll was conducted in 2016, so it is not useful for comparison. However, Galaxy polling had Labor slumping to a 53-47 deficit in June 2017, before recovering to a 50-50 tie in December, so this Newspoll suggests a continuing trend to Labor.
Premier Daniel Andrews’ ratings were 46% satisfied, 41% dissatisfied. Opposition Leader Matthew Guy’s ratings were 36% satisfied, 37% dissatisfied. Andrews led Guy 41-30 as better premier.
Labor led the Liberals 44-34 on party best to maintain energy supply and keep power prices lower, while the Liberals led 42-37 on law and order. 65% thought the Andrews government should be doing more to reduce gang violence, while just 25% thought it was doing enough.
This poll will be a major disappointment for right-wing media that have campaigned strongly against Labor on the gang violence issue. Despite this campaign, the Liberals only have a five-point lead over Labor on law and order, a conservative-leaning issue. Other issues are likely to be helping Labor.
In New South Wales, primary votes were 38% Coalition (down two), 34% Labor (steady), 11% Greens (up one) and 8% One Nation (steady). This Newspoll is the first since early 2008 that has not had a Coalition lead after preferences.
Premier Gladys Berejiklian’s ratings were 45% satisfied (up one since February to March 2017), 35% dissatisfied (up 14). Opposition Leader Luke Foley’s ratings were 37% satisfied (up five), 35% dissatisfied (down one). Berejiklian led Foley 43-25 as better premier (43-21 previously).
New South Wales is the only state that now uses optional preferential voting for single-member electorates. All other state and national elections use compulsory preferential voting (Queensland changed to compulsory preferential during the last parliamentary term).
Populists dominate Italian election
At the Italian election on March 4, the centre-right coalition won 37.0% of the vote, the populist left Five Star Movement won 32.7% and the centre-left coalition 22.9%. Within the right coalition, the anti-immigrant populist League won 17.4%, while former PM Silvio Berlusconi’s Forza Italia had just 14.0%.
37% of both chambers of the Italian Parliament were elected by “first past the post”, while the remainder used proportional representation. The right coalition’s narrow lead over the Five Star Movement did not allow them to win a large majority of the first past the post seats, and they were well short of an overall majority.
42-43% of both chambers went to the right coalition, 36% to the Five Star Movement and 18-19% to the left coalition. A governing coalition could be formed between Five Star and the Democratic Party, the main component of the left coalition. It is also possible that the League and Five Star could combine, or a new election may be needed.
More than five months after election, German government formed
On March 4, the Social Democrats’ members voted by 66-34 to join Angela Merkel’s Christian Democrats in a grand coalition – the same right/left coalition that had governed Germany from 2013-17.
At the September 2017 election, the Social Democrats’ vote had fallen to 20.5% – its lowest in a free election since 1932. Since the election, their vote has fallen to about 17%. It is difficult for a centre-left party in coalition with conservatives to differentiate itself.
By the next German election, due in 2021, it would be no surprise if the Social Democrats had fallen into single figures, and been overtaken by one or both of the more left-wing parties – the Greens and the Left.
Centre-left parties faltering in Europe, but UK Labour is performing much better
The German and Italian elections are examples of a Europe-wide problem for centre-left parties. The exception appears to be the UK, where Jeremy Corbyn’s Labour won 40% at the June 2017 election, and is now neck-and-neck with the Conservatives, with both parties in the 40’s.
I believe the most important cause of this disparity is that UK Labour has adopted many populist left policies, while European centre-left parties resist populist policies.
Putin set for crushing victory at March 18 Russian election
Incumbent Russian President Vladimir Putin is polling over 60%, and will win the first round of the Russian Presidential election on March 18 with an outright majority, avoiding a runoff. The other candidates all have under 10% support.
The South Australian election will be held on March 17. A Newspoll, conducted in the three days from February 27 to March 1 from a sample of 1,078, gave the Liberals 32% of the primary vote (up three since the October to December Newspoll), Labor 30% (up three), SA-BEST 21% (down 11), the Greens 7% (up one) and the Australian Conservatives 6%. No two-party figure was calculated.
About half of SA-BEST’s drop is because it is contesting 36 of the 47 lower house seats, and Newspoll did not offer SA-BEST as an option in the seats it is not contesting. In the seats SA-BEST is contesting, it averaged 27%.
On the three-way better premier question, 29% supported Nick Xenophon (down 17), 28% incumbent Jay Weatherill (up six) and 24% Opposition Leader Steven Marshall (up five). Weatherill led Marshall 38-31 head-to-head (37-32 previously).
Although SA-BEST and Xenophon’s support has slumped, neither of the two major party leaders is at all popular. Weatherill’s net approval is -21, down two points, and Marshall’s net approval is -26, down three points.
The Liberals led Labor 42-38 on best party for the South Australian economy, and led Labor 37-36 on best to maintain the energy supply and keep power prices lower. SA-BEST voters favoured the Liberals 37-33 on the economy and Labor 35-27 on energy.
Although SA-BEST is averaging 27% in seats it is contesting, the major parties are less vulnerable to losing seats to SA-BEST than it may appear from primary votes. Most Greens will preference Labor higher than SA-BEST, and most Conservatives will preference the Liberals higher.
Labor’s biggest problem in South Australia is that it has been in government since 2002. Old governments cannot blame problems on their predecessors, and there is an “It’s Time” factor.
14-to-16-year-old Labor governments in Queensland, New South Wales and Tasmania were smashed between 2011 and 2014, so Labor in South Australia is doing well to be competitive. Picking fights with the unpopular federal Coalition government probably explains Labor’s competitiveness.
Only once in the four elections since 2002 South Australian Labor won has the party received a majority of the two party vote (in 2006). At the 2014 election, despite losing the two-party vote 53.0-47.0, Labor won 23 of the 47 seats, and formed government with an independent’s support.
Unlike other Australian electoral commissions, the South Australian commission is required to create electorally fair boundaries. The 2018 boundaries were drawn so that, based on the last election’s results, a party that won a majority of the two-party vote should win a majority of the seats, ignoring independents.
The result of this requirement is that boundaries have been changed to favour the Liberals. According to the ABC’s Antony Green, the new boundaries notionally give the Liberals 27 seats out of 47, to Labor’s 20. Including independents, the Liberals have 24 seats, Labor has 19 and independents four. Ignoring independents, Labor needs a 3.1-point uniform swing to gain four seats from the Liberals and a majority.
The South Australian upper house has 22 members, with half up for election every four years. Statewide proportional representation is used to elect the upper house, with a similar system to the Senate. The South Australian parliament abolished group voting tickets last year.
The new system has optional preferential voting above the line; a single “1” vote above the line will expire within the chosen party, and will not be passed on as preferences to another party. Voters can direct preferences to other parties by marking “2”, “3”, and so on, above the line.
With 11 members to be elected, a quota is one-twelfth of the vote, or 8.3%. Overall, the upper house has eight Liberals, eight Labor, two Greens, two Conservatives, one Dignity and one Advance SA (formerly SA-BEST). At this election, the members up for election are four Liberals, four Labor, one Green, one Conservative and one Dignity.
Federal Newspoll: 53-47 to Labor
This week’s Newspoll, conducted March 1-4 from a sample of 1,660, gave federal Labor a 53-47 lead, unchanged on last fortnight. Primary votes were 38% Labor (up one), 37% Coalition (up one), 9% Greens (down one) and 7% One Nation (down one).
This is Malcolm Turnbull’s 28th successive Newspoll loss, just two short of Tony Abbott. If Newspoll sticks to its schedule, Turnbull will hit his 30th loss in April, but parliament will not be sitting until the May budget.
Despite the argument about Bill Shorten and Labor’s stance on the Adani coal mine, Labor gained a point at the expense of the Greens on primary votes. However, the overall Labor/Greens primary is still stuck at 47%, where it has been since August.
Turnbull’s ratings appear to have suffered further from the Barnaby Joyce and Michaelia Cash controversies. 32% were satisfied with Turnbull (down two), and 57% were dissatified (up three), for a net approval of -25. Shorten’s net approval was down three points to -23. Turnbull’s lead as better PM narrowed from 40-33 to 37-35, his equal lowest better PM lead.
In the first Newspoll of the year, in early February, Turnbull was at a net -13 approval, Shorten at a net -18, and Turnbull led Shorten by an emphatic 45-31 as better PM. That Newspoll came after a controversy-free summer holiday period. Since then, Turnbull has lost 12 points of net approval, Shorten has lost five, and Turnbull’s better PM lead has narrowed from 14 points to two.
In last week’s Essential, conducted February 22-25 from a sample of 1,028, Labor led by 53-47, a one-point gain for the Coalition. Primary votes were 35% Coalition (down one), 35% Labor (down two), 10% Greens (steady) and 8% One Nation (up two).
By 50-32, voters supported a ban on sex between ministers and their staff. Voters also supported a ban on politicians having extra-marital sex 44-36, and a ban on sex between managers and their staff in the workplace 48-35. However, voters were opposed to a ban on sex between workmates 55-22.
A total of 60% thought Barnaby Joyce should resign, with 26% saying he should remain in parliament, and 34% saying he should leave parliament. Only 19% thought he should remain deputy PM.
By 44-41, voters approved of the media reporting on politicians’ private affairs.
Only 23% thought Joyce’s sexual relationship with his staffer was a major concern. On the other hand, 60% thought alleged excessive use of travel entitlements a major concern, and 50% thought finding the staff member work in another minister’s office a major concern.
Essential asked whether four Indigenous-related issues, the republic and changing Australia Day were a high priority. Just 11% thought changing the date of Australia Day was a high priority, and 21% becoming a republic. All the Indigenous-related issues scored higher.
By 48-32, voters would support abolishing private health insurance subsidies, and using this money to include dental care within Medicare.
In an era of single-term governments and growing electoral volatility in Australia, the return of Will Hodgman’s Liberal government at Saturday’s Tasmanian election with more than 50% of the primary vote is significant – and will have national implications.
The Turnbull government will take comfort from a result that demonstrates voters – even in left-leaning Tasmania – are prepared to re-elect a competent Liberal government that has delivered strong economic and employment growth.
It was a strong result for the Liberals. However, the outcome was shaped as much by Tasmania’s distinctive political practices and local issues as it was by national trends.
Pokies, housing, hospitals, and – at the 11th hour – watering down gun laws might have been the specific issues that dominated the campaign, but the decisive factor was Tasmanians’ enduring apprehension about minority government.
The legacies of Labor-Green minority government of the early 1990s and between 2010 and 2014 cast a long shadow during the 2018 campaign. Both periods are associated with economic decline, rising unemployment, and budget cuts.
While there is little evidence to suggest minority government has been a cause of poor economic outcomes in Tasmania – it is more that these governments were unlucky and found themselves in charge after national downturns – the fact remains that Tasmanians have a strong preference for majority government.
Given this history, undecided Tasmanian voters tend to back the major party that’s most likely to form majority government. This was evident in both 2006 and 2014, and was always going to be a feature of the 2018 campaign given memories of the 2012-13 recession in Tasmania are still fresh in voters’ minds. And the Liberal government, which was elected in 2014, has delivered strong economic growth.
It is this bandwagon effect that helps explain why support for the government increased by ten points over the course of the campaign, rather than going to minor parties – as has been the case elsewhere.
The final result was an emphatic win for Hodgman. But it is also fair to say he lost a bit of skin along the way, due to the Liberals’ big-budget, brutally effective advertising campaign seeming to have been funded by gaming interests.
The reality is that Tasmania remains deeply divided on pokies and the means the gaming industry uses to protect its interests.
Tasmanians voted for political and economic stability on Saturday, but an overwhelming majority support Labor’s policy of phasing pokies out of pubs and clubs over a five-year period.
The pokies debate is far from over. Hodgman must commit to open and transparent government, and subject his gaming policies to full parliamentary scrutiny in an attempt to regain the electorate’s trust. Opposition parties also have a role to play, and must be willing to compromise to find some middle ground.
The election’s losers
The result wasn’t a disaster for Labor.
Rebecca White, after securing the Labor leadership only a year ago, performed strongly during the campaign and has consolidated her credentials as a future premier. That she will be leading a stronger opposition bolstered by handful of up-and-coming new MPs also bodes well for Labor’s future.
The real losers in the election were the Greens and Jacqui Lambie.
In contrast to their success in inner-Melbourne and Sydney, the Greens have been struggling in Tasmania in recent years. The explanation for their decline in their former heartland can be attributed to the legacies of the last government, the absence of a high-profile local environmental issue, and that Labor, under White, has championed many of their core progressive causes.
Lambie and her party could have been the wildcard of this election, but she has had a tough summer and will have to fight hard to salvage her political career. Had Lambie herself run as a candidate on Saturday, it’s likely she would have been elected – and could have held the balance of power in the lower house.
Strangely, given that personalities and name recognition are so important in Tasmanian elections, she ran a ticket of grassroots candidates under her Jacqui Lambie Network banner that, as expected, failed to secure any serious support.
Lessons for the future
As the dust settles, we can draw a few conclusions from the Tasmanian election result.
Above all else, Tasmanians are a pragmatic bunch and are prepared to reward a government that delivers political stability and good economic outcomes.
The campaign also highlighted the power of sectional interests – be they mining, gaming or other actors – in Australian politics. The collective health of our democracy depends on curbing the influence of these groups at both the state and federal level.
Given the distinctive dynamics of Tasmanian politics, not too much can be read into the swing away from minor and protest parties and back to the majors. Perhaps the real test of the national political mood will come in South Australia on Saturday week.
With 84% of votes counted at Saturday’s Tasmanian election, the ABC is calling 13 of the 25 seats (a majority) for the Liberals, eight for Labor, and one Green, with three in doubt.
Labor is very likely to win the final seat in Braddon, while the final seat in Bass is a Labor/Greens contest, and the final seat in Franklin is a Liberal/Greens contest.
Vote shares were 50.5% Liberals (down just 0.8% since the 2014 landslide), 32.8% Labor (up 5.4%), 10.0% Greens (down 3.8%), and 3.2% Jacqui Lambie Network (JLN) – which only contested three of the five electorates.
Tasmania uses the Hare Clark system for its lower house elections, with five five-member electorates. A quota is one-sixth of the vote, or 16.7%. For a vote to be formal, at least five candidates must be numbered. Unlike the federal Senate, there is no above-the-line party ticket box.
I will run through each electorate’s results from easiest to most complicated.
In Denison, Labor won 2.55 quotas, the Liberals 2.26, and the Greens 1.03. This is a clear two Labor, two Liberals, one Green result, unchanged from 2014.
In Lyons, the Liberals won 3.05 quotas, Labor 1.99, the Greens 0.38, and the JLN 0.32. This is a clear three Liberals, two Labor result, unchanged from 2014.
In Braddon, the Liberals won 3.38 quotas, Labor 1.64, the JLN 0.36, ungrouped candidates 0.26, and the Greens 0.20. Labor is well ahead of everyone else in the race for the last seat, and will benefit from Greens preferences. This will be a Labor gain from the Liberals.
In Bass, the Liberals won 3.53 quotas, Labor 1.59, the Greens 0.54, and the JLN 0.28. Labor is more exposed to within-ticket leakage than the Greens, but is likely to be helped by JLN preferences that do not exhaust.
There will be a crunch point where one candidate from the Liberals, Greens and Labor is left. If the Liberals are third at that point, their preferences probably exhaust. If either Labor or the Greens are third, their preferences should benefit the other left-wing candidate.
In Franklin, the Liberals won 2.91 quotas, Labor 2.07, the Greens 0.86, and the Shooters, Fishers and Farmers 0.16. Premier Will Hodgman won 2.30 quotas, and some of his surplus will leak out of the Liberal ticket. However, the Shooters, Fishers and Farmers ran just one candidate, so four further preferences were required for formal votes. These preferences are likely to assist the Liberals against the Greens.
Labor has gained a seat in Franklin at the expense of the loser of the Liberals/Greens contest.
I believe preferences will start to be distributed following the last day for receipt of postal votes, on March 13.
Why this result occurred
In December, an EMRS poll had the Liberals and Labor tied at 34%, the Greens on 17%, and the JLN on 8%. In the three months since that poll was taken, the Liberals went from a losing position to an emphatic victory – a bitterly disappointing outcome for Labor and the Greens.
EMRS does not usually provide favourable ratings for the leaders, but it did in its December poll. It found Labor leader Rebecca White at a net +40, and Hodgman at a net +13 rating.
There have been two recent state elections with first-term Coalition governments that won landslides at the preceding election, ending at least 14 years of continuous Labor government.
At the Queensland 2015 election, the Liberal National Party under Campbell Newman was defeated; Newman was very unpopular.
At the New South Wales 2015 election, the Coalition was comfortably re-elected; Premier Mike Baird was popular at the time.
Tasmania has now followed the NSW example. Labor was crushed in 2014 after 16 consecutive years in power, and the Liberals easily won Saturday’s election.
In Tasmania, White’s initial popularity may have inflated Labor’s position in the polls. However, people generally do not vote a certain way because they like the opposition leader; the premier’s performance is far more important. But popular opposition leaders can inflate their party’s vote until close to an election.
At the 2017 Western Australian election, which Labor won in a landslide, Opposition Leader Mark McGowan was popular, but Premier Colin Barnett was very unpopular. The perception of Barnett was probably far more important than that of McGowan.
The Tasmanian Liberals also benefited from anti-Greens sentiment. In the final week, ReachTEL gave the Liberals a 46-31 lead over Labor, and EMRS gave them a 46-34 lead. These polls may have pushed undecided voters into voting Liberal to ensure a majority government, and so they understated the Liberal vote.
It appears that, four years after one term of Labor/Greens minority government, Tasmanians do not want to return to the Greens holding the balance of power. In 2006, Labor easily won an election that was expected to be close because of the Greens factor.
Tasmanian analyst Kevin Bonham has written about why Labor’s anti-pokies policy was not a major vote winner.
On Friday, the last day of campaigning, the Liberals were embarrassed when it was revealed they had a policy to relax gun laws that had been hidden from the public. There have been other recent cases where issues that would be expected to have a last-minute impact on an election have fizzled. If the Liberals defeat the Greens on Shooters, Fishers and Farmers preferences in Franklin, the net impact will be positive for the Liberals.
At the 2016 federal election, Tasmania was easily Labor’s best state. On Saturday, Labor had its worst result in a state election since the 2014 Tasmanian election – federal and state results do not necessarily agree. A Liberal state government will probably help federal Labor retain its four Tasmanian federal seats.
The Greens’ pitch to voters at Saturday’s Tasmanian state election is not being couched in policy terms alone. It is also based on a vision of a more desirable governing context for Tasmania. But is minority government good for the Greens?
The likelihood of minority government
There is a high probability that the Greens will get their wish and a minority government will be returned at this election.
Tasmania elects its lower house using a form of proportional representation known as the Hare-Clark system, where parties are awarded seats roughly in accordance with their levels of support within the electorate. Unless a party can win an overall majority of votes, it will not attain the necessary majority of seats to form a government in its own right.
In recent decades, the two major parties have struggled to secure governing majorities. In the eight Tasmanian elections since 1989, majority governments have been elected on only five occasions.
There is general agreement among commentators that a majority government at this election is far from certain. The Liberal Party attained 51.22% of the vote in 2014, and lead Labor in most polls. However, according to analysis by Ben Raue, the Liberals polled above 40% in just one of five polls held in the last year. If these figures are translated into actual votes, minority government is inevitable.
One might think that the possibility of minority government would render the major parties open to working with the Greens to form government. Yet the incumbent premier, Will Hodgman, has already declared that the Liberals “will govern alone or not at all”.
Likewise, Labor leader Rebecca White has also confirmed that her party “will not govern in minority”.
Much of this talk should be taken seriously but not literally. The major parties will be under pressure to negotiate an agreement of some description in the likely event of a hung parliament.
Any party that seeks to govern without the support of opposition forces will be perpetually at risk of defeat on the floor of the lower house. This reality is likely to weaken the resolve of even the most stubborn party leader – even more so once Governor Kate Warner makes the necessary entreaties.
However, it is not certain that the Greens will be the only parliamentary grouping in the mix to form a minority government. The most recent polling data (based on a MediaReach internal poll commissioned by the Liberal Party) has the Greens’ statewide primary vote at under 13%, which may not prove sufficient to secure the all-important “hinge seat” in each of the five multi-member electorates.
One of the particular challenges the Greens are confronting in 2018 is Labor’s capacity to outmanoeuvre them. As psephologist Kevin Bonham has observed, the Greens are being squeezed by the appeal of Labor’s “left-wing leader”.
Labor has also stolen the Greens’ thunder on the pokies issue, and its energy policy – complete with 120% renewable energy target – is likely to find favour with environmentally concerned voters.
Adding to the uncertainty is the prospect – albeit faint given recent polling – of the Jacqui Lambie Network (JLN) electing one, possibly two candidates. The JLN might make more attractive legislative partners for the major parties than the Greens.
Is minority government good for the Greens?
There is a deeper question that the Greens must ask: whether it is prudent for them to enter into any kind of formal arrangement with either major party.
There are advantages in the short term, such as policy concessions and even the possibility of executive office. But the longer-term consequences are far less clear.
The Tasmanian Greens suffered swings against them following the three previous occasions that they entered into some form of agreement to support a minority government: -3.9% in 1992, -2.1% in 1996, and -7.8% in 2014.
Though there were unique circumstances surrounding each of these agreements, it is unclear if the benefits outweigh the costs for the Greens. One international study concluded that participation in government “is not necessarily bad for Green parties”, which falls well short of a ringing endorsement.
If, following this election, the Greens are needed to form a stable government, then the party will have to think strategically about the terms on which it does so. Is participation in executive office a higher prize than consistency of electoral performance?
If the Greens value the former, then securing a formal agreement is the best way forward. But if they value the latter, then a “confidence-and-supply agreement” is their best option. This would allow the Greens to demand additional parliamentary resources and to shape the fate of legislation, without having to shoulder responsibility for government failures at a critical time in the party’s development.