MY INSIGHTS FOR 2016

At a Glance

At the start of the year when I gazed into my political crystal ball I made a few predictions.

Even the most seasoned political pundit would have had difficulty predicting the global political outcomes we have all witnessed in 2016.

Australia had the longest federal campaign since 1984.  The Turnbull Government was returned by the skin of its teeth, and a record number of Senators were elected to the crossbench.

Two of Australia’s greatest allies, the UK and USA have undergone major political upheaval.

The UK have said goodbye to the European Union.  Meanwhile, the USA elected a political novice, entertainer and showman, Donald Trump as President.

Who ever said politics was boring!

Looking into my Crystal Ball

For those that regularly read my blog, I thought you might be interested to know the crystal ball predictions that proved to be accurate.

  1. The Federal Election – I accurately predicted the rise of micro parties and predicted there would be between 15 and 21 Senate crossbenchers.  (the final number was 20).
  1. I predicted that One Nation would split within 12 months. It would appear I was too generous in this prediction.  From Senator Culleton’s recent comments, it would appear that Pauline Hanson is on her way to losing a Senator.
  1. In July I predicted – “The one certainty in the new Senate is that there will be a long and extensive inquiry into the banking industry with the broader financial services industry not immune from potential scrutiny.”

Only last month the Senate, established a wide-ranging banking and financial services inquiry.

What Can We Take Away From 2016?

It is an increasingly uncertain time for the business community.

This means businesses, industry bodies and other stakeholders need to be constantly engaging with Canberra to keep their finger on the political pulse.

Those that fail to do this expose their business to significant business risk.

This year we found that the difference between remaining Prime Minister and being relegated to Opposition was a mere 7,000 votes.

The Turnbull Governments threadbare one seat majority also means the Prime Ministers ability to implement bold policy reforms is hampered.

In this environment, the Governments agenda could quickly be hijacked by any one disgruntled member of the Government.

Given the Governments one seat majority, at any time an unhappy Government MP could impact the balance of power in the House of Representatives.

In these challenging political times, business needs to calibrate and consider the inherent political risk posed by the political environment.

For an example of this, cast your mind back to the last week of Parliament and the debate over the backpacker tax.  In the space of a week, four different tax rates were discussed before a deal was done to set the rate at 15%.

The uncertainty this caused for Australia’s agricultural sector, reliant upon backpackers was immense.

The backpacker tax debate was also reflective of an activist Senate crossbench.  Any Government legislation that Labor opposes, requires the support from 9 of the 20 crossbench Senators to become law. The Government has no choice then but to negotiate with a fractured Senate crossbench to pass legislation.

How Did the Opposition Fare?

The Opposition ended the political year emboldened. At the end of 2015, the live question was, would Bill Shorten survive into the new year?

A mere six months later in July, Bill Shorten came very close to becoming Prime Minister and nearly turned the Turnbull Government into a minority Government.

Since the election, Bill Shorten leads in the polls, but this would appear more by default than design.

With the Government facing the major challenge of budget repair, it is fairly certain that the Opposition will continue to make life difficult for the Government. While the Opposition supported $6b in savings measures, rest assured, come budget time the Opposition will seek to inflict maximum political pain on the Government.

The Opposition will enter 2017 feeling very content, being ahead in the polls and watching the Prime Minister being under pressure from the right wing of his party.

2016 – Minority Rules

2016 certainly confirmed the rise and influence of the minor parties.  The standout performer was without a doubt Pauline Hanson’s One Nation Party.

It was no surprise to see Hanson win her Senate seat.  It was a shock to see One Nation secure a further three Senate seats and come within 70 votes of winning a fifth Senator in Tasmania.  This was truly a stunning result for Pauline Hanson.

The fact that One Nation, with its populist pitch, garnered over 500,000 votes is testament to a large section of the community that has given up on the two major parties.

Is Pauline Hanson the Australian equivalent of Donald Trump?  Potentially, but one thing is for sure, the major parties ignore her populist call at their peril.  If anything, her support has only increased post-election.

Along with One Nation, Nick Xenophon with 3 Senators and the other crossbench Senators, the Greens, Jacque Lambie, Derryn Hinch, Bob Day (since resigned) and David Leyonhjelm, is testament to the fact that 2016 was the year of the minor party.

The rise of the minor party is not a political aberration either, they are here to stay as a permanent fixture on the Australia political landscape.

Their assertiveness will only grow stronger in 2017 as they have now settled into their new roles, and now fully understand the power they wield.

Conclusion

2016 was without a doubt a defining political year both in Australia and internationally.

Looking at the results in Australia, the UK and the USA the ‘average Joe’ is discontent with the political establishment.

With the major political parties, increasingly out of favour with the electorate, we have seen a fertile breeding ground for political populists to flourish.  Established political parties need to take note or see their support recede even further.

In Australia, this has manifested itself in the election of a record 20 crossbenchers to the Senate exemplified by Pauline Hanson’s One Nation Party.

For business, this means the political environment is increasingly volatile, certainty of policy outcomes increasingly unpredictable and political risk at an all-time high.

2017 will be no different and against this populist backdrop the Government faces the increasing challenge of budget repair. This is made even harder by the rise of these populist minor parties.

Put on your political safety helmet for 2017 – it’s going to be a hell of a ride!!

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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s