Labor National Secretary Noah Carroll has resigned and the party’s national executive has set up a review to examine its election campaign performance and the reasons for the unexpected loss.
The post mortem will be jointly headed by former South Australian Premier Jay Weatherill and former federal minister Craig Emerson.
Other members of the committee are Linda White, an official of the Australian Services Union; Queensland Senator Anthony Chisholm, a former state secretary; John Graham, a member of the NSW upper house and a former state assistant general secretary, and Lenda Oshalem, formerly an official in the Western Australian branch of the party.
The review will be wide-ranging but done quickly, reporting in October.
It will look at Labor’s campaign strategy and organisation, including digital campaigning, engagement with unions and third-party campaigns, fund-raising, policy, preference negotiations and strategy, polling, candidate selection, target seat campaigning, media strategy, gender diversity in the campaign, and the methods used by opponents that were particularly effective against the party.
After the party’s shock loss in May, stories emerged of tensions in the campaign, with a good deal of blame shifting over the result. Carroll, who is from the right and as Victorian secretary had run the successful 2014 state campaign, had both detractors and supporters.
One issue of controversy revolved around party research. John Utting, who had a long record running polling for the party, was replaced by YouGov Galaxy for quantitative polling. Utting did just the qualitative (focus group) research.
Assistant secretary Paul Erickson will become acting national secretary until a replacement for Carroll is decided.
The Friday executive meeting had been due to consider the expulsion of construction union official John Setka, but he has been given until July 15 to prepare his defence. Meanwhile, he has launched legal action to try to stymie his expulsion.
Labor leader Anthony Albanese said Setka would not succeed in heading off his ousting.
Albanese began his move against Setka on the ground he had denigrated anti-domestic violence campaigner Rosie Batty at a private union meeting – a claim that is contested. But Albanese has also said Setka should be thrown out of the party because of his general behaviour. He recently pleaded guilty to harassing his wife with a plethora of offensive text messages.
Albanese said on Friday he was not surprised Setka had started legal proceedings.
It always going to be the case given Mr Setka’s background in litigation. But the fact is that the Australian Labor Party has the right to determine who we want to be members, just like any organisation.
If a footy player, rugby league or AFL, had pleaded guilty essentially to two issues relating to harassment of a woman they’d be sacked by their club. We’ll sack John Setka and we’ll do it on July 15.
Australian elections have been won in outer metropolitan and regional electorates, but Labor did badly in swing terms in those types of seats at the May 18 election. In inner metropolitan areas, where Labor had swings in its favour, most seats are safe for one side or the other.
You can see this particularly in Queensland. The provincial seat of Capricornia blew out from a 0.6% LNP margin to 12.4%, the outer metropolitan seat of Forde from 0.6% to 8.6% and the rural seat of Flynn from 1.0% to 8.7%.
In NSW, the rural seat of Page went from a 2.3% to a 9.5% Nationals margin, and the provincial seat of Robertson from a 1.1% to 4.2% Liberal margin. Even in Victoria, the only state to swing to Labor in two party terms, the outer metropolitan seat of La Trobe, went from a 3.5% to a 4.5% Liberal margin.
Ignoring seats with strong independent challengers like Warringah and Wentworth, the biggest swings to Labor occurred in seats already held by Labor, or safe conservative seats. There was a 6.4% swing to Labor in Julie Bishop’s old seat of Curtin, but the Liberals still hold it by a 14.3% margin. The Liberals hold Higgins by a 3.9% margin despite a 6.1% swing to Labor.
After the election, the Coalition holds 77 of the 151 seats and Labor 68. Assuming there is no net change in the six crossbenchers, Labor will require a swing of 0.6% to gain the two seats needed to deprive the Coalition of a majority (Bass and Chisholm). To win more seats than the Coalition, Labor needs to gain five seats, a 3.1% swing. To win a majority (76 seats), Labor needs to gain eight seats, a 3.9% swing.
As Labor won 48.5% of the two-party vote at the election, it needs 49.1% to deprive the Coalition of a majority, 51.6% to win more seats than the Coalition, and 52.4% for a Labor majority. Mayo and Warringah were not counted in swings required as they are held by crossbenchers. Warringah is likely to be better for the Liberals in 2022 without Tony Abbott running.
It will be a bit harder for Labor than the 0.6% swing notionally needed to cost the Coalition a majority, as the Liberals now have a sitting member in Chisholm and defeated a Labor member in Bass. The Liberals will thus gain from personal vote effects in both seats.
There will be redistributions before the next election, which are likely to affect margins. But unless Labor improves markedly with the lower-educated, they risk losing the seat count while winning the popular vote at the next election.
Had the polls for this election been about right and Labor had won by 51.0-49.0 (2.5% better than their actual vote), they would have added just three seats – Bass, Chisholm and Boothby – and the Coalition would have had a 74-71 seat lead.
The Electoral Commission will eventually release details of how every minor party’s preferences flowed between Labor and the Coalition nationally and for each state, but this data is not available yet. However, we can make some deductions.
Nationally, Labor won 60.0% of all minor party preferences, down from 64.2% in 2016. This partly reflects the Greens share of all others falling from 44.0% in 2016 to 41.2%, but it also reflects more right-wing preference sources like One Nation and the United Australia Party (UAP). Had preferences from all parties flowed as they did in 2016, Labor would have won 49.2% of the two party vote, 0.7% higher than their actual vote.
In Queensland, Labor’s preference share dropped dramatically from 57.9% in 2016 to just 50.2%, even though the Greens share of all others rose slightly to 34.8% from 34.1% in 2016. Of the 29.6% who voted for a minor party in Queensland, the Greens won 10.3%, One Nation 8.9%, the UAP 3.5%, Katter’s Australian Party 2.5% and Fraser Anning’s party 1.8%. The flow of these right-wing preferences to the LNP almost compensated for Greens preferences to Labor.
Parties like One Nation and the UAP would have attracted most of their support from lower-educated voters who despised Labor and Bill Shorten. As I wrote in my previous article, there was a swing to the Coalition with lower-educated voters.
Final Senate results: Coalition has strong position
In the Senate that sits from July 1, the Coalition will hold 35 of the 76 senators, Labor 26, the Greens nine, One Nation two, Centre Alliance two, and one each for Cory Bernardi and Jacqui Lambie. The final Senate results were the same as in my June 3 preview of the likely Senate outcome.
The table below gives the senators elected for each state at this half-Senate election. A total of 40 of the 76 senators were up for election. The one “Other” senator is Jacqui Lambie in Tasmania. The table has been augmented with a percentage of seats won and a percentage of national Senate votes won at the election.
There was a small swing in late counting against the Coalition. When I wrote my previous Senate article, they had 38.3% of the national Senate vote (up 3.1%). They ended with 38.0% (up 2.8%).
The Senate results are not very proportional, but this is mostly a consequence of electing six senators per state. If all 40 senators were elected nationally, the outcome would be far more proportional to vote share.
The Coalition and Greens benefitted from having large fractions of quotas on primary votes, which Labor and One Nation did not have in most states. Lambie was the only “Other” to poll a large fraction of a quota, and so she is the only Other to win.
Changes in Senate seats since the pre-election parliament were Coalition up four, Lambie up one, Labor, Greens and One Nation steady, and the Liberal Democrats, Brian Burston, Derryn Hinch, Tim Storer and Fraser Anning all lost their seats.
Ignoring Bernardi’s defection from the Coalition, changes since the 2016 double-dissolution election were Coalition up six, Labor and Greens steady, One Nation down two, and Family First, Liberal Democrats, Hinch and Centre Alliance all down one.
Senate preference flows for each state
In the Senate, voters are asked to number six boxes above the line or 12 below, though only one above or six below is required for a formal vote. All preferences are now voter-directed.
With six senators to be elected in each state, a quota was one-seventh of the vote, or 14.3%. In no state was there a narrow margin between the sixth elected senator and the next closest candidate. Preference information is sourced from The Poll Bludger for Queensland, Victoria, WA and SA here, for NSW here and for Tasmania here.
In NSW, the Coalition had 2.69 quotas on primary votes, Labor 2.08, the Greens 0.61 and One Nation 0.34. Jim Molan won 2.9% or 0.20 quotas from fourth on the Coalition ticket on below the line votes, but was excluded a long way from the end. The Greens and third Coalition candidate each got almost a quota with One Nation trailing well behind.
In Victoria, the Coalition had 2.51 quotas, Labor 2.17, the Greens 0.74 and One Nation and Hinch both 0.19. Hinch finished seventh ahead of One Nation, but was unable to close on the Coalition, with the third Coalition candidate elected just short of a quota. The Greens crossed quota earlier on Labor preferences.
In Queensland, the LNP had 2.72 quotas, Labor 1.57, One Nation 0.71 and the Greens 0.69. One Nation and the LNP’s third candidate, in that order, crossed quota, and the Greens extended their lead over Labor’s second candidate from 1.8% to 2.7% after preferences.
In WA, the Liberals had 2.86 quotas, Labor 1.93, the Greens 0.82 and One Nation 0.41. The third Liberal, second Labor and Greens passed quota in that order with One Nation well behind. The Liberals beat Labor to quota on Nationals and Shooters preferences.
In SA, the Liberals had 2.64 quotas, Labor 2.12, the Greens 0.76 and One Nation 0.34. The Greens and third Liberal, in that order, reached quota well ahead of One Nation.
In Tasmania, the Liberals had 2.20 quotas, Labor 2.14, the Greens 0.87, Lambie 0.62 and One Nation 0.24. Lisa Singh, who won from sixth on Labor’s ticket on below the line votes in 2016, had 5.7% or 0.40 quotas this time in below the line votes. On her exclusion, Labor’s second candidate and Lambie were elected with quotas, well ahead of One Nation; the Greens had crossed quota earlier.
Analyst Kevin Bonham has a detailed review of the Senate system’s performance at this election, after it was introduced before the 2016 election. One thing that should be improved is the issue of preferences for “empty box” groups above the line. Such boxes without a name beside them confused voters, and these groups received far fewer preferences than they would have done with a name.
UK Conservative leadership: Johnson vs Hunt
On June 20, UK Conservative MPs finished winnowing the field of ten leadership candidates down to two. In the final round, Boris Johnson won 160 of the 313 Conservative MPs, Jeremy Hunt 77 and Michael Gove was eliminated with 75 votes.
Johnson and Hunt will now go to the full Conservative membership in a postal ballot expected to conclude by mid-July. Johnson is the heavy favourite to win, and become the next British PM. I will have a fuller report for The Poll Bludger by tomorrow.
As hissy fits go, it was a beauty. Pauline Hanson was very cross indeed. Senate leader Mathias Cormann hadn’t called her, even though he was reportedly negotiating on the government’s $158 billion package of income tax cuts.
Venting on Sky on Wednesday night, Hanson said: “I don’t think he’s got the guts to pick up the phone and actually talk to me. And to turn around and say that he’s negotiating with crossbenchers is not the truth, because he’s not negotiating with me”.
She went on to rail about the Liberals preferencing One Nation below Labor, doing “grubby deals” with Clive Palmer and trying to destroy her.
The three-stage 10-year package, which promises an extra tax offset for low and middle income earners, is the big game in town for the first days of the new parliament, which opens the week after next, and it’s causing some grief.
Despite the government’s confident words during the election campaign, the Tax Office has declined to pay the offset of up to $540 until the legislation is passed. This means the July 1 deadline from when the offset was supposed to be available will be missed. (Although people will get from July 1 the tax cut in the pipeline from last year’s budget.)
If the tax legislation is passed quickly, a few weeks’ delay for the offset is no big deal, especially as many people won’t be putting in their tax returns for a while. But the pressure on the government to deliver the first stage of its plan ASAP – not least because the economy needs the stimulus – reduces its ability to hold out indefinitely on its insistence it won’t split the package to accommodate objections to the later cuts.
Labor is in even more of a bind. It is happy to tick off the first stage – worth $15 billion – but has yet to decide its position on stages two (costing $48 billion and starting 2022-23) and three (costing $95 billion and commencing 2024-25).
Its objections are particularly to the last stage, which delivers cuts for higher income earners. Both the later stages come after the next election, due early 2022.
Those urging Labor should try to block at least stage three argue, apart from the equity issue, that mounting economic uncertainty makes it irresponsible to lock in such big tax cuts out in the “never never”.
On the other hand, a strong case can be made on grounds of principle and practicality for Labor to wave the whole package through.
The question of when a party or politician has a “mandate” is vexed.
On one view an opposition can claim it possesses a mandate to stay faithful to positions it advanced before an election even after it has lost that election.
But when the Morrison government went to the polls with the tax package as its prime policy, it does seem to have a strong case to say the parliament should pass it.
The same point would have applied if Bill Shorten had won. He would have had a mandate for his proposed changes to franking credits and negative gearing – both opposed by the Coalition.
It doesn’t help maintain faith in the political system, or in election promises, for parties to try to govern from opposition, despite the Senate’s voting system sometimes facilitating this. Voters should be able to expect that major election policies of the winning side are implemented (perhaps with some alterations at the edges by parliament).
It is another matter when, as happened with the Abbott government’s 2014 budget, big new controversial initiatives are brought in soon after the election campaign, during which they were not flagged.
The practical reason against Labor going to the barricades on the tax package is that as it regroups, there is little to be gained by taking on this particular battle, especially when it is trying to reposition itself as appealing better to “aspirational” voters and leaving behind language attacking the “top end of town”.
Labor might be right that the proposed long term tax cuts could look irresponsible later, but if so, that is a fight to be had at the next election, when the ALP could highlight doubts it had previously registered.
There are divisions in Labor about what to do. Victorian MP Peter Khalil this week said if the government won’t split the package, Labor should vote for it all. Anne Aly, a backbencher from Western Australia, expressed concern about the package’s implications against a darkening economic outlook. The ALP has asked the government for more information. Anthony Albanese is consulting within the party before shadow cabinet decides the position it takes to caucus.
While the government is focusing the rhetorical pressure on Labor, it has an eye to the alternative route – to get the package through via the crossbench.
For Cormann, the new Senate is easier than the last, partly because the non-Green crossbench has been slashed at the election.
To pass legislation opposed by Labor and the Greens the government needs four of the six non-Green crossbenchers. These include two from Pauline Hanson’s One Nation, two from Centre Alliance, South Australia’s Cory Bernardi, and Tasmania’s Jacqui Lambie.
Bernardi will vote with the Coalition. He has said he wants to help the Morrison government as much as possible, and on Thursday he announced he is winding up his Australian Conservatives party. It’s not clear whether he’ll seek to rejoin the Liberals, from whom he defected in 2017, or even stay in the parliament.
Cormann has been in discussion with Centre Alliance about their push for lower gas prices, and an agreement on some action appears likely. While this deal is formally separate from the tax package, he and they both have that front of mind.
This would leave one vote to be collected.
Lambie refuses to comment on her position. Hanson said earlier this month she was “not sold” on the current package and “therefore not likely to support the measures” – and proposed some of the funds be used for a coal-fired power station and a water security scheme.
After Wednesday’s outburst, Cormann was (of course) on the phone to her at crack of dawn Thursday. On her account, he said: “I’m not negotiating with crossbenchers with this at all. We have our three stages. We’re going to pass that no matter what”.
The government aims to keep the heat on Albanese. By the same token, if the crossbench has to come into play, Cormann won’t want a repeat of last term, when he couldn’t muster the numbers to deliver tax relief to big companies.
At the May 18 election, the size of the lower house was expanded from 150 to 151 seats. The Coalition parties won 77 seats (up one since the 2016 election), Labor 68 (down one) and the crossbench six (up one). The Coalition government holds a three-seat majority.
Owing to redistributions and the loss of Wentworth to independent Kerryn Phelps at an October 2018 byelection, the Coalition notionally had 73 seats before the election, a one-seat advantage over Labor. Using this measure, the Coalition gained a net four seats in the election.
The Coalition gained the Queensland seats of Herbert and Longman, the Tasmanian seats of Braddon and Bass, and the New South Wales seat of Lindsay. Labor’s only offsetting gain was the NSW seat of Gilmore. Corangamite and Dunkley are not counted as Labor gains as they were redistributed into notional Labor seats.
Four of the six pre-election crossbenchers easily held their seats – Adam Bandt (Melbourne), Andrew Wilkie (Clark), Rebekha Sharkie (Mayo) and Bob Katter (Kennedy). The Liberals narrowly regained Wentworth from Phelps, but independent Zali Steggall thrashed Tony Abbott 57%-43% in Warringah. In Indi, independent Helen Haines succeeded retiring independent Cathy McGowan, defeating the Liberals by 51.4%-48.6%.
The Coalition easily defeated independent challengers in Cowper and Farrer.
While Bandt was re-elected, the Greens went backwards in their other inner-Melbourne target seats of Wills and Cooper. Only in Kooyong did the Greens manage to beat Labor into second.
The final primary votes were 41.4% Coalition (down 0.6%), 33.3% Labor (down 1.4%), 10.4% Greens (up 0.2%), 3.4% United Australia Party (UAP) and 3.1% One Nation (up 1.8%).
The final two-party vote was 51.5% for the Coalition to 48.5% for Labor, a 1.2% swing in the Coalition’s favour from the 2016 election. It is the first pro-government swing since the 2004 election.
It was expected the Coalition would do better once the 15 “non-classic” seats were included; these are seats where the final two candidates were not Coalition and Labor. However, 11 of these seats swung to Labor, including a 9.0% swing in Warringah and a 7.9% swing in Wentworth. Eight non-classics were inner-city electorates that tended to swing to Labor.
The table below shows the number of seats in each state and territory, the Coalition’s number of seats, the Coalition’s percentage of seats, the gains for the Coalition compared to the redistribution, the Coalition’s two-party vote, the swing to the Coalition in two-party terms, and the number of Labor seats.
Four of the six states recorded swings to the Coalition in the range from 0.9% to 1.6%. Victoria was the only state that swung to Labor, by 1.3%. Queensland had a 4.3% swing to the Coalition, far larger than any other state. Labor did well to win a majority of NSW seats despite losing the two-party vote convincingly.
Official turnout in the election was 91.9%, up 0.9% from 2016. Analyst Ben Raue says 96.8% of eligible voters were enrolled, the highest ever. That means effective turnout was 89.0% of the population, up 2.6%.
Education divide explains Coalition’s win
Not only did Steggall thump Abbott in Warringah, the electorate’s 9.0% swing to Labor on a two-party basis was the largest swing to Labor in the country. Abbott’s two-party vote percentage of 52.1% was by far the lowest for a conservative candidate against Labor since Warringah’s creation in 1922; the next lowest was 59.5% in 2007.
While Abbott did badly, other divisive Coalition MPs performed well. Barnaby Joyce won 54.8% of the primary vote in New England and gained a 1.2% two-party swing against Labor. Peter Dutton had a 3.0% two-party swing to him in Dickson, and George Christensen had a massive 11.2% two-party swing to him in Dawson, the second-largest for the Coalition nationally.
According to the 2016 census, 42% of those aged 16 and over in Warringah had at least a bachelor’s degree, compared with 22% in Australia overall. Just 13.5% had at least a bachelor’s degree in New England, 19% in Dickson and 12% in Dawson.
In Victoria, which swung to Labor, 24.3% of the population had at least a bachelor’s degree in 2016, the highest of any state in the nation.
The Grattan Institute has charted swings to Labor and the Coalition, taking into account wealth and tertiary education. Only polling booths in the top-income quintile swung to Labor; the other four income quintiles swung to the Coalition.
Areas with low levels of tertiary education swung strongly to the Coalition in NSW and Queensland, but less so in Victoria. There were solid swings to Labor in areas with high levels of tertiary education.
Some of the swings are explained by contrary swings in 2016, when the Coalition under Malcolm Turnbull performed relatively worse in lower-educated areas and better in higher-educated areas. However, Queensland’s 58.4% two-party vote for the Coalition was 1.4% better than at the 2013 election, even though the national result is 2.0% worse. The large swings to the Coalition in regional Queensland are probably partly due to the Adani coal mine issue.
Morrison’s appeal to lower-educated voters
Since becoming prime minister, Scott Morrison’s Newspoll ratings have been roughly neutral, with about as many people saying they are satisfied with him as those dissatisfied. After Morrison became leader, I suggested on my personal website that the Coalition would struggle with educated voters, and this occurred in the election. However, Morrison’s appeal to those with a lower level of education more than compensated.
In my opinion, the most important reason for the Coalition’s upset victory was that Morrison was both liked and trusted by lower-educated voters, while they neither liked nor trusted Labor leader Bill Shorten.
Earlier this month, The Guardian published a long report on the social media “death tax” scare campaign. While this and other Coalition scare campaigns may have had an impact on the result, they did so by playing into lower-educated voters’ distrust of Shorten. Had these voters trusted Shorten, such scare campaigns would have had less influence.
Labor also ran scare campaign ads attacking Morrison for deals with Clive Palmer and Pauline Hanson. But I believe these ads failed to resonate because lower-educated voters liked Morrison better.
I think Morrison won support from the lower-educated because they are sceptical of “inner-city elites”. The Coalition leader emphasised his non-elite attributes during the campaign, such as by playing sport and going to church. Turnbull was perceived as a member of the elite, which could explain swings to Labor in lower-educated areas in 2016.
Parallels can be drawn to the 2017 election in the UK. Labour performed far better than expected in the election, reducing the Conservatives to a minority government when they were expected to win easily. Labour had adopted a pro-Brexit position, which may have sent a message to lower-educated voters that they could support the party.
This offers an option for Australian Labor to try to win back support from lower-educated voters: adopt a hardline immigration policy. Votes that Labor would lose to the Greens by doing this would likely be returned as preferences.
See also my similar article on how Donald Trump won the US 2016 presidential election.
The problem with the polls
The table below shows all national polls released in the final week compared to the election result. A poll estimate within 1% of the actual result is in bold.
The polls did well on the One Nation and UAP votes, and were a little low on the Greens. The major source of error was that Labor’s vote was overstated and the Coalition’s was understated. Only Ipsos had Labor’s vote right, but it overstated the Greens vote by about three points – a common occurrence for Ipsos.
No poll since July 2018 had given the Coalition a primary vote of at least 40%. In the election, the Coalition parties received 41.4% of the vote.
Seat polls during the campaign were almost all from YouGov Galaxy, which conducts Newspoll. The Poll Bludger says these polls were, like the national polls, biased against the Coalition.
Analyst Peter Brent has calculated the two-party vote for all election-day and early votes. The gap between election day and early votes increased to 5.0% in 2019 from 4.6% in 2016. This does not imply that polls missed because of a dramatic late swing to the Coalition in the final days; it is much more likely the polls have been wrong for a long time.
Boris Johnson very likely to be Britain’s next PM, and left wins Danish election
I wrote for The Poll Bludger on June 14 that, after winning the support of 114 of the 313 Conservative MPs in the first round of voting, Boris Johnson is virtually assured of becoming the next British PM. Polls suggest he will boost the Conservative vote.
I also wrote on my personal website on June 6 about the left’s win in the Danish election. Also covered: a new Israeli election, the German Greens’ surge, and the left gaining a seat in the May 4 Tasmanian upper house periodical elections.
There were a couple of big questions before the new Labor leader, Anthony Albanese, announced his shadow ministry on Sunday.
One of those was where would former leader Bill Shorten end up after the party’s humbling loss in last month’s federal election. (The answer: head of the NDIS and government services portfolio.)
One of the biggest beneficiaries of Albanese’s changes was Kristina Keneally, who was handed the powerful portfolio of home affairs – opposite an immediately dismissive Peter Dutton – in addition to immigration and citizenship. She will also be the deputy opposition leader in the Senate.
Our experts have already analysed the chief challenges faced by the new ministers in Prime Minister Scott Morrison’s cabinet – now, we’re asking them to look at Labor’s shadow ministers, as well.
In some cases, the shadow ministers hold more than one portfolio. To simplify the policy analysis, we’ve chosen a key policy area for which they’re responsible and asked our experts to analyse this.
Kristina Keneally is continuing her rise and rise, appointed to “shadow” Home Affairs minister Peter Dutton, in Anthony Albanese’s frontbench bench line up announced on Sunday.
After last week obtaining a place in the shadow ministry and becoming Labor’s deputy Senate leader, with two men standing aside to make way for her, Keneally now takes on one of the toughest players in the Coalition. She’ll also cover immigration, which comes under the home affairs portfolio but has a separate minister in the government’s ranks.
At Bill Shorten’s side all through the election campaign, Keneally didn’t recoil from the task of head kicking. She called Dutton a “thug” and “the most toxic man in Australian politics”.
Dutton is a head kicker from way back. On Sunday he was quickly out of the blocks. “Kristina Keneally I predict will be somebody who is very spiteful, very nasty and very personal in her attacks, that’s been her history,” he said, adding, “I’m not going to attack Kristina Keneally on a personal basis”.
They could make the perfect matchup for those into political blood sports.
Home Affairs to continue under Labor
The appointment does mean, and Albanese confirmed, that the opposition is committed to the home affairs portfolio long term, despite Labor’s platform providing for a review.
Asked “now that you have a home affairs shadow minister, does that mean you will preserve the portfolio if in power?” Albanese said: “Obviously the position we have as a shadow ministry is the one that we hope to take to an election and one that we hope to then implement if we were in government”.
Keneally tweeted:“@AlboMP’s decision to introduce a Shadow Home Affairs portfolio sends a clear message that Labor will ensure Australians are kept safe. Labor fully supports offshore processing, boat turnbacks where safe to do so, and regional resettlement”.
Another notable feature of the Albanese frontbench is Bill Shorten’s appointment as shadow for the National Disability Insurance Scheme and government services, where he will be up against minister Stuart Robert.
It brings Shorten (who wanted health) back to where he started on the ladder after arriving in parliament at the 2007 election, when he was appointed parliamentary secretary for disabilities and children’s services. His work in the disabilities area laid a foundation for the NDIS.
NDIS is now politically important
This is not a high profile post for Shorten but because both he and Robert will have a good deal to prove, it could further ensure the NDIS gets a lot of attention, which will be a good thing.
Albanese made a point of his shadow cabinet having equal numbers of men and women, 12 each, when shadow cabinet secretary Jenny McAllister is included.
The four new members of the shadow cabinet are all women: Keneally, Katy Gallagher, Terri Butler and Madeleine King.
At every opportunity Labor highlights that it does way better on the gender front than the government; frequently, Scott Morrison seeks to argue he is doing better than the Liberals did before.
Chalmers is Labor’s voice on economics
As expected, former finance spokesman and Queenslander Jim Chalmers becomes shadow treasurer. Chalmers has a formidable job in front of him, having simultaneously to carry the day-to-day economic argument while being at the centre of the overhaul of Labor’s most controversial election policies.
His colleagues and the public will have abundant opportunity to assess someone who aspires to be leader in the longer term.
Chalmers’ first task and Labor’s first test will be when the new parliament considers the income tax cuts legislation at the start of July. Finance Minister Mathias Cormann reiterated on Sunday that the government will not split the package, which includes tax relief for higher income earners in later years.
As part of the new economic team Gallagher, one-time ACT chief minister – who has returned to the Senate from her exile in the citizenship crisis – becomes shadow minister for finance.
Albanese performs a balancing act
Former shadow treasurer Chris Bowen will be health spokesman; the previous occupant of that post, Catherine King, moves to infrastructure, transport and regional development.
Tony Burke goes from environment to industrial relations, with Brendan O’Connor, who previously had employment and workplace relations, keeping the former but losing the latter and acquiring industry. This removes the conflict of interest he had, with his brother Michael being secretary of the Construction Forestry Maritime Mining and Energy Union.
A number of shadows remain in their old portfolio spots – one is the new deputy leader Richard Marles (defence). Others include Penny Wong (foreign affairs), Tanya Plibersek (education), Mark Butler (climate change and energy), and Michelle Rowland (communications). But Plibersek loses responsibility for women, which goes to Julie Collins. It remains to be seen how much refashioning Butler will have to do to Labor’s climate policy.
There will be the odd interesting balancing act, such as on coal issues. Queenslander Terri Butler, from the left, gets environment and water; Joel Fitzgibbon, from the right, who was concerned how the coal debate swung votes against him in his mining seat of Hunter, has resources added to his responsibility for agriculture.
Linda Burney will cover Indigenous Australians in addition to her previous responsibilities of families and social services. It will be important how she and the Minister for Indigenous Australians, Ken Wyatt, both themselves Indigenous, choose to balance conflict and consensus in this area.
Leigh gets looked after, Husic declines offer
Shayne Neumann has taken a big tumble, from immigration and border protection and a member of shadow cabinet, to veterans affairs and defence personnel in the outer shadow ministry.
Pat Dodson is shadow assistant minister for reconciliation, and Andrew Leigh, who lost his shadow ministry because he didn’t have a faction, has been awarded a position as shadow assistant minister for treasury.
But Ed Husic, who stood down so Keneally could get one of the right’s spots in the shadow ministry, is not even in a shadow assistant minister position. He could have had one – they were in the gift of Albanese – but declined. Which is rather a pity, given his talents.
The Coalition is likely to win 19 of the 40 Senate seats up for grabs at the 2019 election. As they hold 16 of the 36 that are not up for election, they will probably have 35 of the 76 total seats (up four since the pre-election Senate). The new Senate sits from July 1.
Labor is likely to have 26 total seats (no net change), the Greens nine (steady), One Nation two (steady), the Centre Alliance two (steady). Cory Bernardi was not up for election, and Jacqui Lambie regained her Tasmanian seat following her disqualification on Section 44 grounds. While One Nation lost a WA seat, they probably regain Malcolm Roberts after his disqualification.
The likely losers were Fraser Anning, Derryn Hinch, the Liberal Democrats, Brian Burston (who had shifted from One Nation to United Australia Party), and Tim Storer, who did not contest his SA seat.
The Coalition plus One Nation and Bernardi is 38 seats for the right. To pass legislation opposed by Labor and the Greens, the Coalition’s best path will be these 38 votes, plus either Lambie or the Centre Alliance.
With six senators to be elected in each state, a quota is one-seventh of the vote, or 14.3%. With two to be elected in each territory, a quota is one-third of the vote, or 33.3%. Voters are instructed to number at least six boxes above the line, or at least 12 below, though only one above or six below is required for a formal vote. All preferences are voter-directed.
The Senate count is now at 84% of enrolled voters, while the House count is at 91%. The last few percent in the house count have been good for the Greens and bad for the Coalition, but this is unlikely to make a difference to the Senate seat outcomes. Senate results will be finalised by a computer preference distribution, probably by late next week.
Here is the table of likely Senate results for each state and territory. The Coalition was defending just two seats in each state except SA, where it was defending three seats.
In NSW, the Coalition has 2.70 quotas, Labor 2.10, the Greens 0.60 and One Nation 0.34. Labor preferences should assist the Greens, with One Nation too far behind to catch either the Greens or Coalition. Both Labor and the Coalition gain at the expense of the Liberal Democrats and Burston.
In Victoria, the Coalition has 2.54 quotas, Labor 2.19, the Greens 0.73 and One Nation and Hinch Justice both on 0.19. The Coalition appears too far ahead of everyone else to be caught. The Coalition is likely to gain at the expense of Hinch.
In Queensland, the LNP has 2.75 quotas, Labor 1.59, One Nation (Roberts) 0.71 and the Greens 0.68. Whoever finishes last out of the final four after preferences misses out, and that is likely to be Labor. The LNP and One Nation are likely to gain at the expense of Labor and Anning.
In WA, the Liberals have 2.90 quotas, Labor 1.93, the Greens 0.82 and One Nation 0.39. The top three are too far ahead. The Liberals gain at the expense of One Nation.
In SA, the Liberals have 2.65 quotas, Labor 2.13, the Greens 0.75 and One Nation 0.33. The Liberals and Greens are too far ahead. Labor gains at the expense of Storer.
In Tasmania, the Liberals have 2.21 quotas, Labor 2.15, the Greens 0.88, Lambie 0.61 and One Nation 0.24. The Greens and Lambie are too far ahead. Lambie gains at Labor’s expense.
In the ACT, Labor has 1.18 quotas, the Liberals 0.97 and the Greens 0.52. The Liberals will win the second seat. There will be no change.
In the NT, Labor has 1.11 quotas and the Country Liberals 1.10. Preferences are not required for either seat. There will be no change.
The reason for the right’s three-seat lead over the left is Queensland, where six of the 12 senators are likely to be LNP, One Nation two, Labor just three and the Greens one. All other states are likely to split evenly between the right and left, except for Tasmania (6-5 to the left plus Lambie). SA is tied 5-5 with two Centre Alliance.
The table below shows the seats up for election at the next half-Senate election, due by early 2022. While state senators have six-year terms, territory senators are tied to the term of the House.
The Coalition will be defending three seats in every state except SA, where they are defending just one seat. A bad Coalition performance would put their third seat in some states at risk. However, if the Coalition does as well as they did in 2019 in the mainland states, and wins a third Tasmanian seat, the Coalition and One Nation combined would have a Senate majority (39 of 76 seats).
The three senators most likely to lose at the next election are Bernardi and the two Centre Alliance senators, all in SA. At this election, Centre Alliance won just 2.6% or 0.18 quotas and Bernardi’s Conservatives had 1.5% or 0.10 quotas.
The Greens will be happy with their defence of the six senators they had up for election. A similar performance in 2022 would give the Greens 12 senators – the most they have had. But Labor needs to improve greatly to give the left a chance to gain the four senators they would need in 2022 to control the Senate.
Coalition’s national Senate vote increased over 3%
Senate vote shares are currently 38.3% Coalition (up 3.1%), 28.9% Labor (down 0.9%), 10.1% Greens (up 1.5%), 5.4% One Nation (up 1.1%), 2.4% UAP, 1.8% Help End Marijuana Prohibition, 1.7% Shooters, 1.2% Animal Justice and 1.1% Liberal Democrats. Vote shares in the House are 41.5% Coalition (down 0.5%), 33.3% Labor (down 1.4%), 10.3% Greens (up 0.1%), 3.4% UAP and 3.1% One Nation (up 1.8%). One Nation contested 59 of the 151 House seats.
One reason for the increase in the Coalition’s Senate vote is a favourable ballot paper draw. In all states and territories, the Coalition was placed to the left of the Liberal Democrats, so they were not hurt by name confusion. In 2016, the Coalition was to the right of the Liberal Democrats in NSW, Queensland and the ACT.
By state, the Coalition’s vote was up 2.8% in NSW, 3.2% in Victoria, 4.2% in Queensland, 1.7% in WA, 5.3% in SA (helped by the collapse of Centre Alliance since 2016) and up 0.2% in Tasmania. The Coalition’s gain in Victoria could be due to a 3.3% drop for Hinch Justice and a 9.7% drop for Senate groups that stood in 2016, but not 2019.
Another explanation for the Coalition’s vote jump in the Senate is that those with a lower level of educational attainment disliked both Malcolm Turnbull and Bill Shorten in 2016, and were thus likely to vote for other right-wing parties. In 2019, these people liked Scott Morrison. There are many parties to choose from in the Senate, so the Coalition’s higher vote should be seen as an endorsement of Morrison.
In the House, the Coalition’s vote is down 0.5% from 2016. Far fewer right-wing parties stood for the House in 2016 than in 2019, so voters’ choices were more limited in 2016. If the same sorts of candidates had stood in the same seats at both elections, the Coalition’s primary vote would probably have increased in the House too.
Turnout for House increases on 2016
Contrary to this article in Nine newspapers that suggested turnout had fallen to its lowest level since compulsory voting was introduced, official turnout for the May 18 election is currently 91.07%, up 0.06% from 2016. There are many votes outstanding, so turnout will increase further.
As the electoral roll is more complete than it has ever been, this increase in turnout is more impressive than it seems.
It is likely that Labor will hold Macquarie, the last seat in any doubt. That will give the Coalition 77 of the 151 seats, Labor 68 and six crossbenchers.
The national two party count is currently at 51.63-48.37 to the Coalition; the Coalition’s peak was 51.77% on May 30. There are 15 “non-classic” seats that are excluded from this count – ten are likely to favour the Coalition and five Labor. The current two party count therefore understates the Coalition.
Conservatives and Labour smashed at UK’s European elections
I wrote for The Poll Bludger that at the UK’s European Union elections held on May 23, the Brexit party won 32% of the vote and 29 of 73 seats, the Liberal Democrats 20% and 16 seats, Labour just 14% and ten seats, the Greens 12% and seven seats, and the Conservatives 9% and four seats.
Theresa May will resign as Conservative leader on June 7, and the next PM is likely to be a hard Brexiteer.
In the European Union overall, the Liberals and the Greens performed well.
In his first excursion as leader, Anthony Albanese this week visited the Queensland electorate of Longman. This seat tells, in microcosm, the story of Labor’s success and failure, hopes and disappointment between 2016 and May 18 2019.
The ALP wrested Longman from the Liberals’ Wyatt Roy in the election in which Bill Shorten became a Labor hero by bringing Malcolm Turnbull within a whisker of defeat. Then on Super Saturday last July, Shorten held the seat, reinforcing his own leadership and undermining Turnbull’s. But on May 18, Longman went back to the government, as part of Queensland’s rejection of the ALP.
Labor this week has looked like a routed army forced to regroup while it is still bandaging wounds and burying its dead.
The leadership transition was the easy part, with Albanese the only candidate, after the party’s right couldn’t muster support for an alternative. But installing a new frontbench has been a messy process, exposing the downside of factionalism.
The factions are devotees of the “iron law of arithmetic”, so when Albanese demanded Kristina Keneally be given a place, someone in her NSW right faction had to bite the dust. It was especially unfortunate that this was Ed Husic, widely seen as a talented performer, who incidentally is one of only two Muslims in the caucus.
“It seems right that a man should step aside for a stellar woman to take over,” Husic told the ABC.
At the same time, a Muslim friend texted me, “What kind of ‘diversity’ is Albo’s ALP presiding over, when a Muslim-background MP is elbowed out from the frontbench in deeply Islamophobic times? Husic has been very supportive of Muslim communities.”
There were, one would have thought, better candidates than Husic for the sacrifice.
In the Senate, right faction player Don Farrell has also made room for Keneally, who has replaced him as deputy Labor leader there. She was able to mount a claim to this position on gender balance grounds – with Tanya Plibersek replaced by Richard Marles in the deputyship, the two top opposition posts are in male hands.
All in all, the path of the one-time NSW premier has been much smoothed. Keneally only entered the Senate at the start of last year, after a middling performance in the Bennelong byelection. Shorten made her his “bus captain” in the campaign, and planned to ensure she was in a Labor ministry. Albanese has gone out of his way to back her. Not all in caucus are impressed and she’ll have a good deal to live up to in the next three years.
Apart from the loss of Husic from the shadow ministry, the other bad outcome was the dropping of Andrew Leigh. He was shadow assistant treasurer but is non-factional, so he lacked muscle men to preserve his place. Leigh, a former economics professor, did a solid job, and Labor could always benefit from more rather than less economic talent.
And in the week when Ken Wyatt became the first indigenous federal cabinet minister,
Indigenous senator Pat Dodson did not run for the frontbench. Wyatt is minister for Indigenous Australians, the post Shorten had foreshadowed Dodson would have. Dodson is likely, however, to be given some role on reconciliation.
Albanese will allocate portfolios, to be unveiled Sunday, and also announce parliamentary secretaries (the leader chooses these and this could, and should, provide an opportunity to use Husic).
Jim Chalmers, former finance spokesman, is set to be shadow treasurer. He’ll replace Chris Bowen, the architect of some controversial policies, notably the clampdown on franking cash refunds; in the pain of defeat, Bowen is being scapegoated by many. Chalmers, whom some wanted as a “new generation” leader, should be a credible economic face for the party.
Of particular interest will be what portfolio Shorten has. Of more concern, however, will be how the former leader sees his broad post-leadership role.
At this point, Shorten is not showing signs of taking much personal responsibility for the election disaster, although to be fair, he would still be in shock, and it is early days.
In the “grab” from his Thursday speech to caucus, Shorten lashed out. “We were up against corporate leviathans, a financial behemoth, spending unprecedented hundreds of millions of dollars advertising, telling lies, spreading fear.
“Powerful vested interests campaigned against us through sections of the media itself, and they got what they wanted,” he said.
“And I understand that neither of these challenges disappeared on election night. They’re still out there for us to face”.
To Labor voters he just offered “my regrets we did not win”.
Albanese, in his speech to caucus, struck a different note. “I accept my share as a senior shadow minister in the show, for the fact that we weren’t successful”.
Later at a news conference, he was open (as he has been since the election) in acknowledging the flaws in the franking policy, and the problem with “some of the language that was used” in the election (when Shorten targeted “the top end of town”).
More generally, Albanese’s emphasis before the election was different to Shorten’s and that’s also coming out in his early remarks as leader. He stresses his relationships with the business sector, the centrality of economic growth and jobs – and the importance of “aspiration”.
“ Labor will be seen, by all of us, our entire team, as being pro-business as well as pro-worker and I believe that’s exactly where Labor is and where we need to be,” he said.
Given Shorten has chosen to stay in parliament, it’s appropriate he has a shadow ministry and a substantial one at that.
But whether it is sensible for him, or good for Labor, that he remain in politics is another question.
He’s always been a factional player and he and Albanese have long been rivals. Adjusting to a diminished position, avoiding the temptation to criticise his successor even in private, being part of a team that has to move on from the Shorten-era policies – all that will be very hard.
If after a few months he feels he can’t do these things, Shorten should find another career.
The high tide of analysis concerning the Australian Labor Party’s shock 2019 federal election loss has been reached. It looks like so much flotsam and jetsam with the odd big log – leadership popularity, Queensland – prominent among the debris. Sorting through it, making sense of it, and weighting the factors driving the result really matters. It matters because decisions influencing the outcome of the next federal election will flow from it.
The learner’s error is to grasp onto a couple of factors without considering the full suite, weighting them and seeing the connections between them. What does the full suite look like?
Labor’s Bill Shorten was an unpopular leader, neither liked nor trusted by voters. The shift from Shorten in private to Shorten in leadership mode in the media was comparable to the shift in Julia Gillard when she moved from the deputy prime ministership to prime minister: the charm and wit went missing, replaced by woodenness and lack of relatability.
Shorten accepted advice to appear “leader-like”, creating a barrier Prime Minister Scott Morrison, who sought to directly connect with voters, was not hampered by. “It is often said of democratic politics,” historian David Runciman has said, “that the question voters ask of any leader is: ‘Do I like this person?’ But it seems more likely that the question at the back of their minds is: ‘Would this person like me?’” Morrison passed and Shorten flunked that test.
Shorten generally failed the “theatre of politics”. His suits often looked too big, making him look small. Television footage of him jogging in oversized athletic clothes during the campaign made him look small. Poor production of Shorten in these ways diminished perceptions of him as an alternative prime minister – a professionalism fail that could have easily been fixed but was not.
Lesson: Leadership unpopularity costs votes. Successful “theatre of politics” matters.
2.Supporting players’ unpopularity
Shorten was weighed down by frontbenchers in the key economic and environment portfolios who fell well short in the performativity stakes too. The camera is not kind to shadow treasurer Chris Bowen. While he developed serious policy chops, partly through sustained study of Paul Keating’s history as a reforming treasurer of historic stature, he also picked up Keating’s hauteur, but without actually being Keating and able to pull it off.
The arrogance of Bowen’s franking credits policy comment that “if people very strongly feel that they don’t want this to happen they are perfectly entitled to vote against us” was a defining misstep of the Shorten opposition. It made the leader’s job that much harder.
Shadow environment minister Mark Butler is another to whom the camera is unkind. He embodied the soft, urban environmentalist persona that is poison in those parts of Australia where Labor needed to pick up seats. An equally knowledgeable but more knockabout environment spokesperson – Tony Burke, for example – would have been the cannier choice in a “climate election” where regional voters had to be persuaded to Labor’s greener policy agenda.
Lesson: Appoint frontbenchers capable of winning public support in their portfolios.
The maths wasn’t wrong but the models on which the two-party-preferred vote is calculated have been blown up by this election, an event foreshadowed by recent polling miscalls in Britain.
Long-time conservative political consultant Lynton Crosby’s presence in the Coalition campaign has been invisible except for the tiny but crucial, and completely overlooked, detail that the Liberals’ polling “was conducted by Michael Brooks, a London-based pollster with Crosby Textor who was brought out from the United Kingdom for the campaign”.
The Coalition had better polling. Labor and everyone else were relying on faulty polling that misallocated preferences and uniformly predicted a Labor win – false comfort to Labor, which stayed a flawed course instead of making necessary changes to avoid defeat.
Lesson: Focus on the primary vote, the polling figure least vulnerable to modelling assumptions.
4.Media hostile to Labor
The Murdoch media have created an atmospheric so pervasively hostile to Labor that it has become normalised. It contributed significantly to Shorten’s unpopularity and Labor’s loss. Its impact is only going to get worse with Australia’s nakedly partisan Fox News-equivalent, “Sky After Dark”, extending from pay-TV to free-to-air channels in regional areas.
Lesson: Have brilliant ads in a sharply focused campaign that doesn’t fail to hit your opponents’ weaknesses.
7.Massive advertising spending gap
Along with the hostile media environment created by the Murdoch press, the unprecedented spending gap between the Labor and anti-Labor sides of politics and its role in the Coalition win has passed largely unremarked.
The previous election was bought by Prime Minister Malcolm Turnbull with a $1.7 million personal donation that boosted Coalition election advertising in the campaign’s crucial last fortnight. That now looks like small beer next to the 2019 election’s anti-Labor advertising spending (approximately $80 million when one adds the Coalition’s $20 million spend to the Clive Palmer-United Australia Party spend of $60 million-plus). This is four times the size of Labor’s $20 million ad budget – a huge disparity.
Lesson: Australia already needed campaign finance laws to stop the purchasing of elections. It needs them even more urgently now.
8.Large policy target
Misleading polling showing it was persistently ahead gave Labor false comfort pursuing a “big” policy agenda – that is, making policy offerings normally done from government rather than opposition. If everything else goes right in an election, and with a popular leader and effective key supporting frontbenchers, this may be possible. That was not the case in the 2019 election.
Lesson: When in opposition, don’t go to an election promising tax changes that make some people worse off. Save it for government.
9.Green cannibalisation of the Labor vote
The primary vote of the Labor Party (33.5%) and the Greens (9.9%) adds up to 43.4% – a long way off the 50%-plus required to beat the conservatives. For a climate-action-oriented government to be elected in Australia, Labor and the Greens are going to have to find a better modus vivendi.
They don’t have to like each other; after all, the mutual hatred of the Liberals and Nationals within the Coalition is long-standing and well-known. But like the Liberals and Nationals, though without a formal agreement, Labor and the Greens are going to have to craft a way forward that forestalls indulgent bus tours by Green icons through Queensland coal seats and stops prioritising cannibalisation of the Labor vote over beating conservatives.
Lesson: For climate policy to change in Australia, Labor and the Greens need to strategise constructively, if informally, to get Labor elected to office.
10.Every election is winnable
Paul Keating won an “unwinnable” election in 1993 and pundits spoke of the Keating decade ahead. John Howard beat Keating in a landslide three years later, despite being the third Coalition leader in a single tumultuous parliamentary term.
Morrison won the 2019 election despite internal Coalition leadership turmoil, political scandals and a revolt of the party’s women MPs against the Liberals’ bullying internal culture.
Lesson: Every election is there to be won or lost. Take note of Lessons 1 to 9 to do so.
The government’s tax relief package is shaping up as the first test of incoming opposition leader Anthony Albanese, with Treasurer Josh Frydenberg declaring on Friday it must be supported “in its entirety” when put to the new parliament.
But Albanese has only guaranteed support for the first tranche. As for the later cuts for higher income earners, “we will consider that,” he said on Friday.
But let me tell you, it is a triumph of hope over experience and reality that the government knows […] what the economic circumstances are in 2025 or 2023, in the middle of the next decade.
Appearing with Albanese on the Nine Network, Trade Minister Simon Birmingham said:
Albo, it would be remarkable if your first act as leader of the opposition was […] to oppose a long term package of tax relief – that would show a real tin ear for the Australian people”.
In an interview with The Conversation, Frydenberg refused to be drawn on what the government would do if unable to get the whole bill through.
It would, however, be hard for it to avoid splitting the bill – to hold out would deny the immediate relief pledged in the April budget.
All or nothing
Nor could Frydenberg say when parliament will meet to consider the legislation, although the government has effectively conceded it will not be in time for the promised July 1 start of the additional tax offset promised in the budget. (A smaller offset from last year’s budget will be paid from then.)
But Albanese said the tax cuts could be passed in time for July 1, because it would only need a couple of hours of sitting. “We’ll do a deal. I can do that. One speaker a side, and Bob’s your uncle.”
Frydenberg said Reserve Bank Governor Philip Lowe had highlighted the positive impact the tax cuts would have on household incomes.
“Let’s too not forget that $7.5 billion will flow to households in the coming financial year, as a result of these tax cuts,” Frydenberg said.
Tax cuts as good as rate cuts
“This benefit to households and the economy is equivalent to two 25 basis point interest rate cuts and is one reason why growth and household consumption is projected to pick up,” he said.
“The tax reforms we are putting to parliament are not just providing immediate relief, but leading to long term structural change. This will tackle bracket creep and reward aspiration.
“Earning more is nothing to be ashamed of and should be encouraged not punished. Rewarding aspiration is in the Coalition’s DNA and will be a fundamental driver of our policies in government.”
In his assessment of the economic outlook, Frydenberg had two messages.
He said in his discussions with some of Australia’s biggest employers, “I’ve been buoyed by their confidence and their desire to work with the government, to support continued economic growth and job creation”.
But the economy “faces significant headwinds. Trade tensions between the United States and China have increased, with the potential to negatively impact global growth.
“Were there to be another round of US tariff increases, the potential for which has been flagged publicly, the proportion of global trade covered by recent trade actions would double from 2% to 4%.”
Also, flood, drought and fires had taken a toll and the housing market slowdown was hitting dwelling investment and having an impact on consumption.
The challenges made the government’s agenda for growth, including tax relief, so important and time critical.
Asked whether the “headwinds” faced by the Australian economy were stronger than at budget time, when he also spoke of headwinds, Frydenberg said: “I think the tensions between China and the US have increased”.
Frydenberg spoke with the US Treasury Secretary Steve Mnuchin this week and the two will meet in Japan at the G20 finance ministers meeting in a few weeks. Frydenberg stressed in the conversation the importance of free trade to Australia and its wish to see disputes resolved as amicably as possible.
Asked whether, if the economy deteriorated further, the government would be willing to live with a smaller surplus next financial year than the $7.1 billion projected in the budget, Frydenberg said, “that’s the amount that we’re committed to”.
He would not be drawn on the signal this week from Lowe that an interest rate cut was coming.
The Treasurer said the current unemployment rate of 5.2% reflected “strong labour market performance”.
While there are no plans for an overhaul of federal-state relations by the re-elected government, Frydenberg said he would work closely with the states on infrastructure and managing population.