At a Glance

As Malcolm Turnbull and his newly sworn in Ministry get down to work, the number one issue confronting the Government is budget repair.

The ALP committed during the campaign to support a number of savings measures they had previously opposed in the Senate, such as changes to the family payments system and research and development tax incentives.

The ALP has stated it is willing to work with the Government on its package of superannuation reforms which has the potential to save billions of dollars.

While the election is now over, the final Senate outcome still remains outstanding and won’t probably be finalised in all states until early next week.

The reality is the Government now has a relatively short period of time to tackle both budget repair and implement other major policy reforms.

After the nation endured the longest campaign since 1984, we will be back to the polls by May 2019 (at the latest).

Time is Against the Government

You might be curious to know that there are certain implications due to the holding of a double dissolution election?

Of the 12 Senators to be elected in each state, by tradition the first six Senators declared elected by the AEC receive a six-year term and the 2nd six elected receive a three term.  This is because the constitution does not specify which Senators are to be short term Senators versus long term Senators.

As this was a double dissolution election those Senators who will get a three-year short term as opposed to the usual six years in office, will see their terms expire on 30 June 2019.

As a consequence, the 2019 election will have to be called no later April 2019, for an election in May at the latest.

With the Parliament due to sit on 30 August it means this parliament will effectively have a term of just over two and a half years.

It raises the question what can the Government expect to achieve in this short period of time?

From a budget perspective, the Government still have to legislate measures from this year’s budget and confronts the prospect of bringing down only two budgets this parliamentary term.

With an election due to be called by April 2019, it only has 2017 and 2018 to bring down two budgets to address budget repair.

In addition, the 2019 budget can expected to be delayed as the nation may well be heading to the polls.

For a Government that has just faced a near death electoral experience – it now has a shortened electoral cycle in which to effect major budget repair and its’ major policy reforms.

How Close was It?

To put in context how close Malcolm Turnbull came to electoral defeat, he avoided a hung parliament by about 600 votes and if approximately 7,000 votes had fallen the other way in seven Government marginal seats, Bill Shorten would now be Prime Minister in his own right.

Coupled with the closeness of the election result, early problems have already begun to manifest for Malcolm Turnbull and the Parliament hasn’t even convened.

Disgruntled members of the LNP in Queensland, led by Senator MacDonald (a former Minister in the Howard Government) were reported to have been looking to form a separate Queensland based block of members within the Coalition.

While the move was quickly suppressed by wiser heads, early dissension like this is not a good sign for the Prime Minister when he has a bare majority in the lower house and an unruly Senate to placate.

It does not bode well for the Australian business community, looking for the Government to deliver major economic reform, policy certainty and political stability.


The Government face a shortened parliamentary term due to the need to call the next federal election by April 2019 at the latest.

With a focus on budget repair the Government still has to legislate the 2016 budget measures and will only be able to bring down two full budgets this term in 2017 and 2018.

There are early signs of internal disharmony within the Government.

With the declaration of the Queensland seat of Herbert for Labor, the Government has a one seat majority in the lower house and faces the most fractious Senate since Federation.  Its ability to legislate difficult and major reforms will be extremely challenging.

Business has a case to be concerned, as they face an environment of heightened political risk, where uncertainty is the new certainty.

For a Government and a Prime Minister with diminished authority, its appetite for big bold reform will be seriously tested.

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

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