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.

While collectively minor party support is very strong, individual minor parties will always struggle to win seats in lower house electorates where they need 50% of the vote in a preferential vote system.

This should not be interpreted as a failure – as it is the Upper Houses of Parliament where minor parties can and will continue to prosper under proportional representation voting systems.

The guest of honor? 

The South Australian state election result demonstrated very clearly the strength of the minor party vote in the Upper House, where the total minor party vote was 39%.  For all the criticism SA Best has received, Nick Xenophon’s party has won two Upper House seats (out of eleven) and will share the balance of power.

If SA Best were to replicate their State result at the next Federal election they would easily return at least one SA Best Senator, having polled 19%.

Similarly, in last year’s West Australian State election, One Nation was written off for its poor performance in the lower house.  However, they gained three seats in the WA Upper House and share the balance of power.

A recent report by the Grattan Institute titled, ‘A crisis of trust:  The rise of protest politics in Australia’ suggests that the rise in support for minor parties is not dissipating.

The report highlights, the vote for minor parties in the Senate has gone from 15% in 1987 to nearly 35% in 2016.  This is an all-time historic high and explains why there are now 20 crossbench Senators in a chamber of 76.

The Grattan Institute report also found that the further you go away from the CBD the stronger the vote for minor parties is, and this support is concentrated in rural and regional areas.

This is definitely the case for One Nation in Queensland, where at the last State election they polled over 20% in some regional areas.

There are several factors the Grattan Institute report singles out as the reason for the increasing support for minor parties.  Interestingly, one of the primary factors is economic insecurity.

Minor party voters tending to be more pessimistic about the economy than major party voters and are more likely to describe the state of the economy as poor.

For example, less than 10% of people who voted for One Nation in the Senate in 2016 expected their financial situation would be better in 12 months’ time.  This is despite the evidence that the economy overall is doing quite well.

When Malcolm Turnbull declared, “There has never been a better time to be an Australian”, minor party supporters appeared incredulous, as this was not their lived experience.  The average person saw no reason to celebrate, they were facing stagnant wage growth, rising household bills or in some cases the real prospect of losing their jobs.

This kind of rhetoric only seeks to convey to minor party voters that the major parties are out of touch with the concerns of everyday Australians. Policies like free trade and open markets don’t resonate with this group of voters.  Both major parties will struggle to win these voters back, as they are intrinsically seen as supporters of the status quo when it comes to policies like free trade.

How Does Business Operate in the Era of the Minor Party?

With many in the business community hoping that support for minor parties is nothing more than a ‘passing fad’, the evidence suggests the opposite.  Support for minor parties has continued to grow and shows no sign of abatement.

Witness the recent Government efforts to pass the second tranche of its $65 billion in business tax cuts.  Despite the strong business support, personal outreach by leading CEO’s to individual Senators and the Government offering varying sweeteners to individual Senators, the Government fell 1-2 votes short.

Senators Hinch and Storer held out, with reports Senator Storer who had only been in the Senate a week, being the crucial last vote the Government needed and went as far as locking his Parliament House office door so as to not be bombarded by both supporters and opponents of the tax cut.

If there was one issue that demonstrated the power of the Senate crossbench it was this.

Business tax cuts have been the signature economic policy objective of the Turnbull Government this term, yet not enough of the Senate crossbench has been persuaded to support them.

For those (small Government) minor parties on the right of politics, such as The Australian Conservatives and the Liberal Democratic Party, support for any tax cuts is a core belief.

What was interesting was One Nation support for the company tax cuts.  Many of their supporters are some of the most economically disadvantaged and anti-big business proponents there are.  That being said, One Nation did support the company tax cuts in return for 1,000 apprenticeships in regional Australia, so they felt they had some political cover to justify their support to One Nation voters.

If the political environment wasn’t already hard enough for business to navigate, minor parties are now more a permanent fixture of the political landscape.  At the federal level, this will continue to manifest itself in the Senate with a powerful crossbench.

Business needs to be mindful of engaging with minor parties on an ongoing basis and not just when they want them to support something.

Conclusion

Contrary to many reports post the South Australian election that the minor parties had peaked in popularity – the party has just gotten started!

While minor parties may fail to win many seats in the lower houses of Australia’s Parliaments, they are and will continue to remain influential players in the upper houses of both federal and state parliaments.

Minor parties benefit from the politics of grievance. With more and more of the population believing the major parties are failing to either hear their grievances and much less providing policy responses to them, then minor parties are well placed to continue to harness these feelings of discontent.

While the established parties and key stakeholders, like the business community may lament the rise of minor parties, business would be well advised to seek to understand what they stand for and why.

Alignment in politics is often sought but rarely achieved.  If business wants to achieve major outcomes such as business tax cuts – they need to think about how they can invite what they perceive to be the political fringe dwellers, to the party as welcome guests.

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 

IMAGE CREDIT: Zanetti’s View

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