IT STARTS WITH SUPER SATURDAY

At a Glance

With the budget done and dusted, the Super Saturday of five by-elections on its way –  Australia has now entered the 12-month countdown to the next federal election.

The Prime Minister has consistently stated the election will not be held until the first half of 2019.  There have been some early mutterings that the election could take place as early as September, but the smart money is on a May 2019 election.

The Government has handed down a budget that was generally well received and did not appear to upset any major segment of the Australian community. Potentially a vote-winning budget?

The Government is positioning itself as the party of lower taxes and budget repair, against an Opposition they are seeking to frame as being addicted to higher taxes and higher spending.

With the Opposition pledging even larger income tax cuts for lower to middle-income earners, (paid for by tax changes elsewhere, such as the abolition of franking credit refunds for self-funded retirees), the battle of the tax plans has well and truly begun.

The Government’s mantra has now become clear.  Their messaging will be all about who can you trust, with the refrain being… you can’t believe anything Bill Shorten says,  personified in the LNP ‘unbelieve-a-bill’ slogan.

Is it time?

One of the golden rules of politics is that you go to an election when your chances of winning are best.

Federally, the system allows Malcolm Turnbull a great deal of flexibility as to when to call the election. For a Government that has lost 32 Newspolls in a row, they will definitely be looking not only for a budget bounce but a sustained bounce over a number of polls.

The Government will be hoping that the budget delivers them a recovery in their electoral standing.  If the polls begin to show them neck or in front of Labor, then an election in August or September may well become a consideration.

The question the Government will be asking itself is…….”are they better off going to an early poll or will their electoral standing be even better heading into 2019?”

What is clear, is that the budget is at the core of the Governments narrative for re-election.

Super Saturday

The High Court ruled that Labor Senator Katy Gallagher was ineligible to be elected as an ACT Senator on the grounds of dual citizenship.  This triggered the resignations of four other Federal MPs – three Labor, one Centre Alliance MP.

Labor faces by-elections in the seats of Braddon (TAS), Fremantle (WA) and Longman (Qld) not to mention a by-election in the seat of Perth following the unexpected resignation of Labor’s Tim Hammond.

These by-elections will be held in late June to early July.  They will prove to be a strong litmus test for both Bill Shorten’s and Malcolm Turnbull’s leadership and their respective tax plans.

The seat of Braddon is held by 2.2%, Perth 3.3% and Longman 0.8%, all would be considered marginal whereas Fremantle is held by a safe 7.5%.

The Government will be hoping for a good result in Longman, in particular.  Given they hold 5 seats in Queensland on a margin of 1.7% or less. Longman will have significant implications for their re-election chances.

If the LNP win Longman, they will take great comfort and it might provide the impetus to consider seriously going to an early poll.

Alternatively, if Labor retains Longman and receives a swing in its favour – it’s unlikely we will see an early election and marginal seat Queensland Government MPs will become increasingly nervous.

Bear this in mind, if Labor wins the 5 key marginal seats at the next election – that alone could win them Government.

If Labor receives a swing of 2% or more in Longman, they would consider this a signal they are well placed to win the next federal election. A loss for Labor in Longman could see some in the Opposition questioning Shorten’s leadership.  Some may ask…”if he can’t win Longman… then how can he win Government?”

It is historically unprecedented to have 5 by-elections on one day.  The results on Super Saturday will provide a very clear insight into the electorate’s frame of mind.

Think of it this way, approximately up to 450,000 people will be going to the polls.  That’s a substantial sample of the electorate.

Could Labor be Punished?

Voter’s might consider Bill Shorten’s adamant statements, on more than one occasion, that no Labor MP or Senator would get caught up in the dual citizenship fiasco as somewhat underhanded.

This plays directly into the Coalitions “unbelieve-a-Bill” narrative.

In his effort to keep maximum pressure on the Government over this issue which engulfed them for the second half of 2017, Bill Shorten has been caught short. The risk for Labor going into these by-elections is that Bill Shorten’s credibility and character will also be on the ballot paper.

For a leader already struggling to connect with the electorate in the popularity stakes, the Government will be looking to use these by-elections as a test of Bill Shorten’s credibility and leadership.

Conclusion

It’s the final count-down into the next federal election.

Let’s consider the 5 by-elections on Super Saturday to be a ‘mini election‘ in themselves.  The results will provide a revealing insight into the mood of the nation.

Super Saturday presents more risk and perhaps more opportunity for Bill Shorten than it does for Malcolm Turnbull.  Primarily because Labor currently holds 4 of the 5 seats in which the by-elections will be held.

Queensland will hold the key to success at the next federal election and the Longman by-election will be the key seat to watch on Super Saturday.

A good result for Labor will bode well for their chances of winning Government.  A bad result will prompt questions about Bill Shorten’s leadership and his capacity to lead Labor to victory in the federal election.

It is now clear that the federal election will be a battle of the competing tax plans.  The last time tax policy centerpiece of the election battlefield was the GST election of 1998.

With large sections of the community doing it tough on the back of stagnant wage growth and with the rising cost of living, both sides of politics see the opportunity in offering household relief through tax cuts.

Whoever wins the battle of the competing tax plans, will probably win Government.

For a Government that has struggled to implement major tax reform, it is somewhat ironic that the next election will be won or lost by who the electorate believes has the best personal income tax plan.

For more information, regarding this or any other public affairs issue you may require assistance with please don’t hesitate to contact me or visit the Insight Strategy website at www.insightstrategy.com.au

IS THE PARTY OVER?

At a Glance

March was not a good month for minor parties, but as Mark Twain once said….“the reports of my death are greatly exaggerated”.

Nick Xenophon’s SA Best Party, misfired in the South Australian state election, failing to win a single lower house seat. The Greens failed in their bid to win the Batman by-election in Victoria.  In their heartland, Tasmania, the party lost a seat and went from three to two MPs.

From these March results, it’s clear that the success of minor parties is not universal. Continue reading “IS THE PARTY OVER?”

AND THEY ALL FALL DOWN

At a Glance

The citizenship crisis continues to swing like a wrecking ball through the Federal Parliament – with ancestory.com no doubt the most popular website in recent times.

Despite months of denials by Bill Shorten, it would now appear up to 5 Labor members could be referred to the High Court.  Already Labor Senator Katie Gallagher has resigned from the frontbench and has been referred to the High Court. Continue reading “AND THEY ALL FALL DOWN”

DON’T LET THE SUN GO DOWN ON ME

At a Glance

These are indeed challenging days for the Prime Minister.

With the publication of the latest Newspoll showing the Government behind Labor for the 21st time in succession, political pundits will be musing about the implications of 30 Newspoll losses in a row.   Remember, this was a key trigger for Malcolm Turnbull to challenge Tony Abbott to become Prime Minister. Continue reading “DON’T LET THE SUN GO DOWN ON ME”

DUAL CITIZENSHIP DEJA VU

What’s the deal with Dual Citizenship

With the Government having floundered through the same sex marriage debate –  the last thing Malcolm Turnbull needed was the legitimacy of his Deputy Prime Minister, Barnaby Joyce being questioned under section 44(i) of the Constitution.

The current political debate regarding the dual citizenship of a number of MPs has taken off like a bush fire on a hot dry summers day. Just as the Opposition questions the legitimacy of the Government, the Government is now questioning Bill Shortens citizenship. Continue reading “DUAL CITIZENSHIP DEJA VU”

HISTORY REPEATS

At a Glance

As they say, ‘the trend is your friend’ and with the latest Newspoll showing Labor leading the Government by 53 to 47, on a two-party preferred basis, this poll is the 16th one in a row showing Labor in the lead.

In the last few weeks I’ve often been asked…. “why is Labor leading when their primary vote is still low and Bill Shorten continues to lag Malcolm Turnbull as preferred Prime Minister?”

The answer is, it all comes down to minor party preferences.  That is why we see Labor in front in the polls.

So, what is going on?

Political Disruption is the New Norm

There is no doubt that the Australian electorate is basically sick and tired of politics as usual and people are increasingly rejecting both major political parties.

The latest Newspoll has the Greens on 9%, One Nation on 9% and ‘others’ on 9%.  So more than 1 in 4 Australians are basically voting for anybody other than Labor or Liberal.

We see Labors primary vote at 37% and the Liberals at 36%.

Traditionally, Labor receives strong support via Greens preferences, however unusually, Labor is getting strong support from parties on the right such as One Nation, to put it in front of the Government.

What is happening on the right of Australian politics is a phenomenon that the left went through many years ago.  It resulted in a permanent cannibalisation of Labors left wing vote and the rise of the Greens.

The Greens now consistently poll around 10% of the Federal vote, votes that traditionally would have been received by Labor.

This institutionalised Green vote also sees on average 70% flow back to the ALP via preferences and in some cases, it can be around 80% depending upon the federal seat.

Currently on the right this same process of cannibalisation is taking place.

It is a process in transition and therefore many right-wing votes that would traditionally be the home of the Liberal party, are leaking to the ALP via preferences.

With One Nation currently capturing a large chunk of traditional liberal party voters and other parties like Cory Bernardi’s Australian Conservatives and David Leyonhjelms Liberal Democrat Party, eating away at the Liberal Party base, the Liberal Party vote has falling from 42% at the last federal election to its current 36%.

This has become as problem for the Government.

It is yet to become an institutionalised block of voters on the right of the political spectrum, therefore the Coalition are seeing multiple parties vying for their supporters with a sufficient number of these votes leaking to the ALP giving them a lead in the polls.

The Point in Question

The Queensland Federal seat of Herbert stands as a good example of this phenomenon.

At the 2016 election, Labor won the seat by 37 votes with only 30.5% of the primary vote versus the sitting Liberal member who polled 35.5% of the primary vote.

Labor won, because they did exceptionally well with Green preferences as would be expected, but also because of right wing preferences.

Labor received 65% of Green preferences to the Liberals 12%, and the remainder went to other minor parties.  When One Nation preferences were distributed (representing a total of 21% of votes cast), Labor secured 53% versus 47% for the Liberals.

All in all, this is problematic for the Government.  For while Labor on the left, will always receive a block of preferences from the Greens, on the right, that vote is fragmenting across multiple right-wing parties and not flowing back to the Government sufficiently in preferences.

What Does this mean for the Coalition?

 Currently One Nation is the main beneficiary of the drop-in support for the Government.

This does not mean that all of One Nations support has come from the Liberal Party, it is eating into Labors vote as well, but not to the same degree.

But unlike for the ALP where the Greens have become institutionalised on the left of the political spectrum, on the right of the political spectrum it is still in a state of flux.

There are many minor parties competing to become the institutionalised party on the right of the political spectrum.

For the Coalition, this means until a party emerges on the right to solidify and capture permanently that element of right wing voters who want another political home other than the Liberal Party – it will most likely continue to struggle in the polls.

This is the challenge for the Government.  If it can’t get those right-wing voters back to directly supporting the Coalition, how does it get them back via preferences, like Labor does via the Greens to bolster its overall vote?

Now, those voters supporting right wing minor parties, led currently by One Nation, are effectively spraying their preferences, which is why Labor is ahead in the polls, despite Malcolm Turnbulls’ consistent lead over Bill Shorten as preferred Prime Minister.

Conclusion

The Liberal party primary vote is depressed because a plethora of right wing minor parties are eating away at the Liberal party vote.

These right wing minor parties are all seeking to claim the mantle as being the true representative of conservative voters in Australia.  At a minimum, they are giving disgruntled traditional Coalition voters, a multitude of choices of where they can now park their vote.

In do so, with multiple choices, it also gives multiple opportunities for a sufficient number of these votes to leak to the ALP and put them in front.

Until a party on the right emerges like the Greens did on the left, to capture and institutionalise right wing voters which can then be directed back to the Liberal party via preferences, the Coalitions overall two-party preferred vote will continue to struggle.

For more information, in regard to this or any other public affairs issue you may require assistance with please don’t hesitate to contact me or visit the Insight Strategy website at www.insightstrategy.com.au

Image credit: Herald Sun

 

 

 

 

WITH FRIENDS LIKE THESE…

At a Glance

Post budget, the desired ‘bounce in the polls’ seems to have eluded the Turnbull Government.

In my 25 years-experience it’s rare to see a budget, even one that was generally well received, turn around a Governments electoral fortunes immediately. The political success or otherwise of the budget, will be clearer in 6 months and not just 4 weeks after it was handed down.

One would imagine a continuing concern for the Government would be that their primary vote continues to languish around 36%.  Malcolm Turnbull cannot be re-elected on a primary vote this low.

At the July 2016 Federal election, the Government scrapped over the line with a one seat majority with 42% of the vote. in the 17/18 budget, there was one proposal designed to capture votes – the $6 billion bank levy.

A Liberal Government is always seen as a natural ally of big business, but this one measure in itself led by the Prime Minister, a former banker, shows that for big business in particular, all bets are off when it comes to natural allies in Canberra.

Low Hanging Fruit

The announcement of the bank levy, while taking the banks by surprise has certainly been strongly welcomed by the community.

In his post speech, the Treasurer warned the banks not to pass the levy onto consumers in saying, “They really don’t like you”, in referring to ‘they’ , he was speaking on behalf of the community.

The imposition of the bank levy offers several lessons for business to heed more generally.

Firstly, if the Government can impose a $6 billion tax on the banks then it can similarly act at will in regard to any other industry that has lost both community and political support.

The banks were completely blind-sided, there was no consultation with them by the Government.  If there ever was a single demonstration of what political risk looks like, this was it.

Secondly, while banks have never been popular, after years of numerous inquiries, consumer complaints, warnings from politicians, regulators and consumer bodies, banks have learnt what ignoring those warnings now costs – $6 billion and a near permanent stain on their reputation.

With the Coalition, more than willing to throw what would have been considered a natural business ally under the bus, it would be foolish for other industries to sit back and say ‘this couldn’t happen to us’.

Any large industry, with a major consumer presence, has to be alert to the concerns of its customers, the community and politicians.  It about managing and constantly improving their social licence to operate.

It’s clear that politicians, regardless of their political persuasion are not going to go into bat for big business.  Quite simply, there are no votes in doing so.

Politically, the banks have managed to effectively unite both major parties against them – that in itself is quite a feat.

In this environment, big business is facing heightened political risk and needs to be actively managing their political risk profile in their engagement with Canberra.  Not to do so puts them at risk of being the next piece of low hanging fruit that the Government may choose to target in their desire for votes.

Start Planning for the Next Federal Election

If you cast your mind back to October last year Insight Strategy predicted that the next Federal election was most likely to be held in the latter half of 2018.

Essentially, there are three key reasons for this:

  • The Senate
  • The Victorian State election
  • The NSW State election

Last year’s double dissolution election meant that half the Senate was elected for three year terms, which expire on 30 June 2019.

As a consequence, the latest a simultaneous House and Senate election can be held is the 18th May 2019, in order to meet both constitutional and electoral law requirements.

The Victorian state election is fixed at the end of November 2018, as is the NSW state election at the end of March 2019.  This gives the Turnbull Government a limited window in which to hold a federal election.

The Prime Minister needs to be able to engage the electorate in which to articulate his policies and vision for the nation’s future and this requires time.

Remember as well, a minimum 33 days is required to pass from the calling of the election to holding the election.

Hypothetically, if the Prime Minister wanted to call the Federal election after the NSW election, it would mean calling the election around mid-April 2019.  This would also overlap with both Easter and Anzac Day limiting their campaign opportunities.

Most Governments want a minimum of 6 months without other events (such as state elections) interfering with their campaign strategy in which to ‘sell its message’ and persuade the electorate.

For these reasons, Insight Strategy is predicting the next federal poll will be in August/September 2018.

Business needs to be factoring this into their forward planning and also begin considering what a change in Government might mean for their business objectives given the current state of the polls.

2018 will be a busy election year all round.  State elections are due in Tasmania, South Australia and Queensland in early 2018, and the Victorian election in late November.

It’s going to be a challenging year for business, as they to prepare for 5 elections in one year. Businesses need to build this into their forward strategic planning and their approach to political risk management and Government engagement strategies.

Conclusion

Let the $6 billion bank levy serve as warning to all businesses of what the implications can be if they don’t listen to consumer, customer and political concerns.

It is unprecedented for one industry sector to be hit with a $6 billion levy and not be part of the dialogue.  A good conversation with Canberra, requires business to be an equally good listener. There is no point going to Canberra just to broadcast your message, if you also don’t plan on addressing concerns political stakeholders have raised.

In the current political environment being ‘big’ is almost synonymous with being ‘bad’.  The community will automatically look to any ‘big’ business with a degree of cynicism and suspicion.

Any business that falls into this category needs to make sure they are carefully managing their message with Canberra and consumers.

As the banks have discovered,  these are interesting political times .  The question is who could be next, as both parties seek votes in time for the 2018 election?

For more information, in regards to this or any other public affairs issue you may require assistance with please don’t hesitate to contact me or visit the Insight Strategy website at www.insightstrategy.com.au

Image credit: Financial Review