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.

What seems to be forgotten in the current debate is that this issue is not without precedent.

When Paul Keating was Prime Minister in the early 90’s, several MPs and Senators also faced the question of their eligibility to sit in the Parliament, with the focus back then being on foreign born members. It’s fascinating to see how differently the issue is playing out in the current political environment.

Back then the community didn’t witness the outrage we are seeing today. The MP’s and Senators impacted simply renounced their dual citizenship and got on with their careers unchallenged.

In the current chaotic political environment, the Parliament has already lost two Green Senators and others led by the Deputy Prime Minister, Barnaby Joyce are about to have their eligibility to sit in the Parliament tested in the High Court.

The biggest concern for the Government is that of Barnaby Joyce.  If he is found to be ineligible, then the Government will technically be a minority Government until a by-election can be held in his seat of New England.

So why has this become such a hot political potato?

Today’s political climate is vastly different for the following reasons;

  • The stakes are higher due to the Government’s one seat majority;
  • Keating was a strong leader, leading a united Government, whereas Turnbull has been constantly undermined from within – projecting a perception of disharmony to the community.
  • The current Opposition has ruthlessly exploited this issue, whereas the Hewson Opposition, in the 90’s didn’t see the matter as a political weapon.
  • It was an era of political stability, whereas today we see an inherently unstable political environment with the influence of the minor parties.
  • The 24/7 media feeding frenzy didn’t exist back then

What Happened in the 90s?

At the time, several MPs faced similar questions to their right to sit in the Parliament.The focus was on those MPs who were foreign born, unlike the current focus on those having an eligibility to foreign citizenship due to the place of birth of their parents or grandparents.

The catalyst in 1992 was the famous Cleary case. In this case Phil Cleary (who won Bob Hawke’s) old seat in a by-election was ruled to be ineligible by the High Court under the office of profit under the crown provisions in section 44 because he was a school teacher.

Two other candidates in the by-election were Mr Kardamitsis and Mr Delacretaz. In the course of the challenge it was found they were also ineligible to have been candidates for election, under the dual citizenship provision section 44(i) because they had not taken all reasonable steps to renounce their other citizenship, which they both failed to do.

At the time I was working as a senior staffer to the then Tasmanian Senator Nick Sherry. It is instructive to see what former Senator Sherry had to say on the matter in a speech he gave to the Senate in 1998.

“It is fair to say that at the end of 1992 this did cause some major concerns for members of parliament. I was one of them. I do not recall the exact number, but there were certainly double figures of members of the House of Representatives and the Senate for whom there was an arguable case over whether they had failed to renounce the country of their home of birth.”  (emphasis added)

From memory, there were between 10 and 15 members and senators who could have been challenged under section 44(i).  At the time, no challenges were made and no referrals from the Parliament to the High Court eventuated.  How times have changed.

MPs simply paid a fee to renounce their citizenship and got on with their parliamentary careers and the Government with governing.

In the words of former Senator Sherry:

“If there was a formal procedure, even if they had Australian citizenship, as a consequence of the High Court decision they were open to challenge—let us put it that way. I was one of those who, in a flurry of activity, dashed down to the British High Commission, sought out the details for renunciation of citizenship from Britain, paid the appropriate fee—which at that time was $50, I think—and lodged renunciation forms. There were quite a number of members of parliament at that time who had to go through that procedure.” (emphasis added).

The significant difference is there has been seismic shift from 25 years ago where both major parties had a fundamental commitment to strong and stable government.

What difference a mere 25 years makes!

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

POLITICAL TARGETS

At a Glance

The Federal Parliament is now in recess until the May Budget, with the Government looking to ‘lock down’ it down. The budget remains a major issue for the Government facing the ongoing challenge of ‘debt and deficit’.

Scott Morrison is seeking the political kudos that comes from being perceived as ‘a superior economic manager’, but budget repair is proving ever more elusive. Continue reading “POLITICAL TARGETS”

HAPPY NEW YEAR MR. TURNBULL?

At a Glance

It’s been a challenging start to the year for the Government.

In January, the then Minister for Health was caught up in a travel rorts scandal that led to her resignation.  Senator Bernardi jumped ship to the Senate crossbench and George Christensen MP is looking ever more likely to join the crossbenchers in the House of Representatives, having announced his resignation as a parliamentary whip.

Couple this with the latest Newspoll showing the Government trailing the Opposition by 45-55 on a two-party preferred basis.

If the first two months are any indication, the Prime Minister is in for a rough ride for the rest of 2017. Continue reading “HAPPY NEW YEAR MR. TURNBULL?”

LESSONS FROM THE TRUMP VICTORY

At a Glance

Wow!  What an outcome.  Donald Trump is President-elect of the USA – a result no one saw coming accept his die-hard supporters and very few political pundits.

The Trump victory has proved that in politics never count your chickens until they are hatched.

What might the lessons be for Australian politics?  What messages can we take away and what might business learn from what is widely seen as an upset victory.

First and foremost, never presume.  Never presume that the Government of the day can’t lose and the Opposition can’t win.

Never presume that the policy environment you and your industry currently operate in will be the same policy environment tomorrow.

The one key message from the Trump victory is that presumption, in politics, is risky.

We Have Seen it Before

There are two events in recent Australian political history that prove business should never presume.

Cast your mind back to 2009 when Tony Abbott became Opposition Leader. Keven Rudd was Prime Minister and the prevailing view was that Tony Abbott was, in effect a ‘stop gap’ leader.  At the time, very few believed he would go on to be Prime Minister.

Here, history has shown us never to presume.

In 2012 Campbell Newman became Premier of Queensland winning with the largest electoral landslide in Australian political history.  Holding a 67-seat majority, many in business had pencilled in a decade of LNP rule.  A short 3 years later, at the 2015 election both the Government was gone and so was Campbell Newman (who unbelievably lost his own seat).

It is worth noting that prior to the election, the Queensland Government had made a major commitment to a privatisation program, the proposed asset sales would have raised billions of dollars.

Business quite rationally started to prepare for the sales program on the basis the Campbell Government would be re-elected.  This turned out to be a false presumption.

These two examples alone demonstrate that in the current environment politics is both fickle, fluid and constantly changing.

It means that business need to be constantly assessing and evolving their political risk management strategy.

 Food for Thought

Another example of an industry facing heightened political risk is currently playing out in the Parliament.

The Government currently has before the Federal Parliament a package of Bills to reform the vocational education and training sector.  This follows a litany of complaints and publicity in regards to unscrupulous operators in the sector.

This industry was put on notice that reform was coming, having been flagged earlier this year by the Government.

What has taken many by surprise is the speed with which the government is now seeking to implement these reforms.

The package of Bills was only introduced into the Parliament in mid-October and will most likely be passed by the Senate this week, with the changes due to take effect on 1 January 2017.

This is a very short period for the industry to adjust and implement major structural changes.

It is a tangible example of political risk in action. A major industry sector has become defined by the bad operators.  The Government and Opposition are united in their support for a crackdown in this sector.  This will have a major impact on the reputable operators that will remain.

This example, highlights the stark reality of how the actions of Government can and will have a major impact on an industry sector, where the disruption and cost will be significant.

Business as Usual?

 After the Trump victory, can we truly say that it’s “business as usual”?

Business can no longer take for granted that the community will accept that, what is good for business, is good for the community, in terms of their individual economic outcomes.

Politicians are ultimately representatives of the community.  In this political environment politicians, will be increasingly wary of being seen to support policies that just benefit business to the exclusion of individual voters and the community at large.

That is why the Government’s ability to pass large scale tax cuts for big business is proving so difficult.

The term “big” in itself has become a term of derision when it relates to business.

Last week, the ABS reported that wages growth for the July-September quarter was the lowest on record at 0.4% and annual wages growth was only 1.9%.  The legions of people experiencing stagnating or marginal wages growth will be asking themselves… how will a corporate tax cut for big business be of benefit to them?

The electorate is sceptical that a corporate tax cut will lead to increased wages.  They are more of the opinion that these benefits will be passed onto shareholders or perhaps even higher salaries for CEOs.

This is the challenge that the major political parties face and it is the strain of resentment and anger that Donald Trump tapped into.

Australia is Not Immune

‘The Trump Phenomenon’ has already played out in Australia in several ways.

  1. Firstly, at the recent federal election, Pauline Hanson’s One Nation Party received 500,000 votes and won 4 Senators.
  2. In the Senate, there are now 20 crossbenchers, (an all-time high), where 1 in 3 voters now refuse to vote for the major political parties.
  3. In the House of Representatives, approximately 1 in 4 voters now vote for minor parties.

This fracturing of the vote is a manifestation of a reaction against the established parties.  The community are sending a very clear message they will vote with their heart, not their head –  no matter how illogical or impracticable the alternative parties policies may be.

This phenomenon, at its core, means that political risk is heightened and will continue to be so for quite some time to come.  Businesses who ignore this message leave themselves exposed to significant commercial risk.

Conclusion

The Trump victory has proven that in politics and policy, the only certainty is uncertainty.

For businesses to prosper they usuallly require both policy and political certainty.  While this is not an unrealistic expectation, it’s not necessarily realistic in the current political setting.

The political environment is challenging and this means political risk is ever present and business needs to manage, mitigate and minimise political risk like never before.

Be it Trump in the US, Brexit in the UK, One Nation in Australia or 20 crossbenchers in the Senate.

It’s a new world order for business when it comes to politics.

Political disruption is here to stay.  Business needs to take this seriously and plan accordingly.

With the Trump victory, fresh in our minds, be sure to watch out for the French Presidential election in April 2017 (where Marine Le Pen of the right wing National Front is doing very well in the polls).

It will be fascinating to observe how this “phenomenon” plays out in the Australian Parliament in 2017 in regards to policy positions parties seek to adopt.

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 http://www.insightstrategy.com.au