Politics
Our political parties are rearranging themselves
The two-party system has ended. Expect some instability before a relatively stable multi-party order emerges.
A political history book, written 50 years from now, will probably include something resembling the following:
From 1944 Australia developed a two-party system that held together for 80 years. There were breakaway movements from the main parties – the Democratic Labour Party in the 1950s, the Democrats in the 1970s, the Greens in the 1980s – but they were largely accommodated within the two-party order. All the time, however, support for the two main parties was slowly slipping. In 2010 Australians elected their first minority government at the Commonwealth level.
Five subsequent elections saw a return to majority government, but established parties were continuing to lose support to smaller parties and to centrist independents. In the 2025 election only two-thirds of votes were for the two established parties. By the mid 2020s growing support for an insurgent populist party precipitated a political re-arrangement that was disruptive for a time, but soon developed into a stable multi-party system, and there was a succession of centrist governments for an extended period.
This transition was facilitated by Australia’s established voting system, involving ranked-choice voting (known in Australia as “preferential” voting), compulsory voting, and an independent electoral commission.
That’s the optimistic version. There are other versions of that imagined future, written by people who draw on comparisons with Germany in the 1930s.
Malcolm Turnbull picks up elements of that optimistic version in a nine-minute interview with Sally Sara on Radio National: Malcolm Turnbull not aware of “concrete” plans to start new political party. Don’t be fooled by the title – there may not be written plans, but there are movements afoot to fill a vacant space on our ideological spectrum. On the same program is an interview with Independent Zali Steggall confirming that some independents are discussing the idea of forming a political party. ABC political reporter Holly Tregenza has a post confirming that independents – some of them at least – are in talks to form an alternative party.
Steggall and her companions are well aware of the conflict between representing constituents as independents and as members of a political party. They are also aware, however, that collectively they cover a centre-right ground that the Liberal Party has neglected and that never was of interest to the National Party, or to the mongrel LNP in Queensland. Also, changes to the electoral legislation pushed through Parliament by the traditional parties have made it comparatively harder for independents to secure electoral funding.
To put the situation simply, Labor in government (described by Turnbull as the only surviving centrist party) has made some baby steps to the left with its tax changes, while the Liberal Party has headed off to the land of the populist right. Consequently a widening gap has been opening up on the political spectrum, waiting for a party to fill it.
For a time after the election last year a breakup of the coalition agreement gave the Liberal Party a chance to move into that space – a space the party had once occupied – but it chose not to. Turnbull describes the problem the Liberal Party has gotten itself into:
The more the Liberal Party tries to chase and emulate and copy One Nation, the more it builds up the vote for One Nation.
That’s because when the Liberal Party adopts those policies, people go for the “real deal”, he points out. He goes on to describe a general dynamic which he also observes in the UK:
If centre-right parties abandon the centre they will get overwhelmed by the party that is to their right.
These developments seem to be very sudden, as if they have arisen only since Labor won 95 of the 150 seats in the House of Representatives last year, leaving the Liberal Party with only 43 seats (42 after Farrer). But just as Ernest Hemingway described going bankrupt, “gradually then suddenly”, and as has been pointed out in these roundups, support for the Coalition has been eroding for a long time. Support for the two main parties has been falling for fifty years – more rapidly for the Coalition than for Labor.
More recently in 25 of the 29 state and Commonwealth elections held over the last 12 years the Coalition’s primary vote has fallen. On average the Coalition’s primary vote has fallen by more than three percent between elections, or almost one percent a year.
It is easy to blame individuals – John Howard, Tony Abbott, Scott Morrison – for this decline. They did, indeed, come to stand for values that were moving in a direction opposite to those of the electorate. But the dynamic was almost inevitable, in line with Thomas Schelling’s tipping model that describes how organizations slowly die. Once the first few “moderates” lost their preselection or their seats in the early days of the Howard administration, the remaining members of the Parliamentary party came to be more representative of the right. That process, repeated over several elections, led to the party having only a few hard right stalwarts. That’s the way tipping works: the tipping point was early in Howard’s time, but its manifestation has been becoming obvious only in recent years.
This leads to a serious question about political parties: should their policies be determined by their parliamentary members, or by some larger party gathering? It’s an old problem in democracies, with defensible arguments in both directions. In Australia we have gone for the former, and in a process of creative destruction that process seems to have destroyed the Liberal and National parties – helped along by the Liberal Party’s adherence to a formal and secret coalition deal with a party representing an entirely different constituency.
Two polls, one by Redbridge and the other by DemosAU, summarized on William Bowe’s Poll Bludger, suggest that if a federal election were held today Labor would hold around 75 seats – perhaps enough to form a narrow majority government, or enough to govern in a minority, with One Nation forming the second-largest number of seats, the National Party disappearing, and the Liberals holding perhaps around 12 seats. (The DemosAU poll, with a large amount of data broken down by age, gender, income and education, is available on its own site, and is subject to another post on this roundup.) The ABC’s Evelyn Mayfield writes about some reactions to that poll: it appears that the Liberal Party’s reaction is to double down on what it is already doing .
Writing in the Saturday Paper – “Not waiting for the wrecking ball”: Inside Labor’s One Nation strategy – Karen Barlow suggests that in response to One Nation’s resurgence Labor now sees itself in a competition with One Nation for the working-class vote, and will focus on One Nation’s Senate record in voting against measures that would be in the interests of wage-earners. As for the Liberal and National parties, Labor seems to see them as minor irritants, in the same category as the Animal Justice Party perhaps.
But they may have to change that strategy if One Nation collapses (unlikely before the Victorian election in November), or if a strong centre-right party arises.
The latter outcome is a strong possibility, but there are many pathways for it to develop.
One, as mentioned above, is the development of independents. That’s not as contradictory as it sounds when one considers many independents’ shared views on gambling, climate change and government integrity, and their general support for economic structural reform. If they were to come together they would have to work out governance arrangements, but there is no need for them to have an authority figure carrying the title “leader”. (That term “leader” is over-used by those who don’t understand the difference between leadership and the exercise of authority.) He or she (probably she) could be the convenor, or even the spokesperson, but there is no reason she should have the authority within the party assumed by Albanese, Waters, Taylor or Canavan. They would do well to avoid anything as inimical to representative democracy as Labor’s strict voting loyalty code.
Another possibility is for a party to emerge organically, such as Something Better Australia, to name one hopeful group. It’s difficult. Experience counts, which is why new parties are often formed around existing politicians. A party needs the infrastructure of address lists, a network of like-minded people in different locations, and donors who not only share values, but who also are reasonably confident that their contributions will not be wasted on a movement that cannot hold together.
Turnbull hints that the Liberal Party could fill that role. Perhaps he’s just being polite. Or he may have in mind something like the Liberal Movement in South Australia. It was a well-identified progressive faction within the parliamentary Liberal Party which was in opposition during the 1973 to 1976 parliamentary term, led by a former premier, Raymond Steele Hall – an opposition within the opposition. The Liberal Party failed to dislodge the Labor government, but the Liberal Movement did manage in the following term to bring the Liberal Party back towards the liberal centre. Might Turnbull offer himself to do for the federal Liberal Party what Steele-Hall did for the South Australian Liberal Party, or does he really mean it when he says he’s “not actively involved in politics at all”?
The gentle art of explaining public policy
The government would have expected its modest tax reforms to be met with a torrent of lies. As Howard did with the GST, it needs to put more effort into explaining them.
The story getting around is that the government is struggling to explain its taxation reforms, and that the struggle is costing the government political capital. One meme that captures the idea, repeated by some otherwise non-partisan journalists, is “if you’re explaining, your losing”.
That saying was brought into the political vocabulary by Ronald Reagan. Like so many of his utterances it’s catchy, but it is not backed by any serious study of the way governments achieve structural change.
As a public idea it’s destructive, because it takes only a few logical steps to go on to assert that governments should stick to policies easily embraced and understood by the public. That’s close to a surrender to populism, and a warning to governments never to introduce complex reform.
Memories are short. When the Howard government introduced the GST in 2000 it put significant resources into explaining it – explaining why the government was replacing the clunky and arbitrary wholesale tax system, and explaining how the new indirect tax system would work.
Although there were strong protests at the time, the GST cost his government no political capital. Once the system was working the fuss died down and by the time the election rolled around 16 months later the GST had become part of the furniture. (Howard had worked out that he could win the election with a Farage-style scare campaign about the country at threat of being overrun by refugees.)
Howard’s GST was complicated. The previous indirect tax system had been collected from a few wholesalers and importers. The GST, however, applies to almost everyone with some non-wage income. There were complex exemptions for certain foods: for example the Tax Office’s detailed food list makes any possible carve-out for startups under the present changes look like a very simple exercise.
In fact ABC economics reporter Tom Crowley has managed to capture the changes entailed in the government’s CGT measures in a single post, rich with graphs, explaining the before and after effects: Shares, start-ups, small businesses and ETFs: What Labor's capital gains tax changes mean in practice.
As pointed out in last week’s roundup, the claim that investors in shares will be disadvantaged is quite wrong. Reversion to indexation favours those who invest in companies with modest, steady growth – the companies of choice for small risk-averse investors and for older investors who seek a balanced mix of dividends and capital gain. The only losers will be those who hit on a big gain when they sell, who will be expected to share some of their windfall with other Australians.
Paul Keating is urging the government not to yield to the voices of greed. If the government does anything more than make a few tweaks – which it has already foreshadowed – it will start to look like Trump in his negotiations with Iran.
A social-democratic government should be able to bolster its political capital if it frames the conflict as one between the rentier class and workers. As an example, if we consider the poor fortunes of Britain’s governing Labour Party, it seems to be in electoral trouble because it is too timid to embark on a social-democratic program of reform. That’s the main message from Ian Dunt’s regular appearance on Late Night Live this week: What’s wrong with British Leadership?
What we learn from a big poll on attitudes: It’s the economy, stupid
A poll on attitudes to public policy confirms that the economy remains people’s dominant concern, but there is resistance to reforms that would make for a fairer distribution of income and wealth.
A poll by Capital Brief/Demos AU captured a great deal of media attention because it revealed that if an election were held today, One Nation would win more votes than any other party, but Labor would almost certainly hold on to government. Another finding taking people by surprise is that Pauline Hanson’s approval rating is higher than Albanese’s or Taylor’s.
Those findings captured the headlines, but the poll has a great more data on people’s attitudes to policy issues, including the budget. In short, people don’t believe the budget will make housing more affordable or make Australia a fairer place: rather it will hurt the economy and will make it harder for the average Australian. People narrowly approve of ending negative gearing for investment properties, but narrowly disapprove of the CGT changes and a toughening up on trusts.
Those results can be interpreted in at least four ways. Perhaps people have a warm admiration and affection for the one percent who enjoy Howard’s tax rorts. Perhaps they believe they will make it to the one percent themselves. Perhaps they have been misled by the hysterical reaction to the budget. Or perhaps they just don’t understand. If you look at the figures without applying too much precision (attitudinal surveys are pretty rough) you would say a third approve of the budget measures, a third disapprove, and a third don’t have any idea.
One of the more surprising findings is that 42 percent of respondents believe that “income from investments should be taxed at a lower rate than income from work, to provide greater opportunities for people to build wealth”. Only 38 percent believe that “income from investments should be taxed similarly to work income to ensure a fair system”.
This echoes with the idea of the “American dream” – the idea that in the land of the free everybody can become rich. It’s an illusion that explains much of the tendency for people to vote against their own interests. It’s particularly pathetic when we hear it from people who believe they can build their wealth by buying existing houses, which is a zero-sum activity that simply shuffles wealth around.
This poll aligns with other polls in relation to voting intention by income, education and age: a university education is a pretty good inoculation against support for One Nation, and if the franchise were limited to adults under 35 we would have a Green government. It also confirms what has been observed in recent elections: One Nation is drawing most of its support from former Coalition voters. That’s a significant finding, because it lends weight to the idea that people are attracted to One Nation because they see it as a genuine version of the Coalition’s populist right-wing platform, rather than as disillusionment with the two main parties.
Perhaps the most revealing part of the survey is the collation of responses to the question “In your opinion, what is the biggest issue facing Australia today?”. Unfortunately that collation was left to artificial intelligence, which showed an extraordinary inability to categorize ideas. For example somehow “the economy” is quite separate from “the cost of living”, or “the budget”. And the total of single responses comes to 115 percent. AI still has some way to go. So I have done a little re-assembling and categorization to produce the table below, showing people’s responses – still not perfect but easier to follow than the original presentation.
It is clear that economic issues are at the top of people’s concerns. But it would be rash to suggest that the country is suffering a general cost-of-living crisis – a notion that many journalists assume to be beyond question. The figure, 34 percent, pretty well aligns with evidence from other sources that about 30 percent of people are having a really tough time, 40 percent are having the usual trouble of matching income to demands, and another 30 percent are enjoying a high level of financial security.
It’s also notable that only 2 percent of respondents nominate inequality, when economists, and businesspeople who understand how markets are sustained by well-paid workers, see inequality – particularly wealth inequality – as a major threat to the legitimacy and stability of a capitalist economy. One Nation has tapped into the aggrieved who believe that their hardship has been inflicted by a class of “elites”. If Labor is to win these people over it needs to engage in the language of class interest.
There are other messages in these figures. Immigration is probably not the issue Taylor and Hanson would like it to be, and warnings about climate change are still not getting through to the public. In fact as pointed out in a recent post on Pearls and Irritations by Ralph Evans, progress in the electricity sector may be distracting us from serious inaction on climate change in the rest of the economy.
Social media bans may not be working. What, then, does work?
How about asking young people for for their views?
In the roundup of 9 May there was a link to a report by the National Bureau of Economic Research, assessing the effectiveness of Australia’s social media ban. In short, the NBER’s research found that the ban, although its advocates were well-intentioned, was failing.
Tony Ward of the University of Melbourne, alerted us to that research, and in Pearls and Irritations he has written A more nuanced way to tackle social media’s harmful effects.
Rather than taking a side in the ban/no ban argument, he focuses on dealing with those whose use of social media is harmful. This approach is in line with the findings of Tiya Banerjee’s work, linked in the roundup of 25 April, that found positive aspects of young people’s use of social media, while it also identified a constellation of behaviours making for problematic use of social media by some young people.
Drawing on the NBER study and other sources, Ward concludes:
The mounting evidence thus paints a complex picture, one which a blanket ban, for all its good intentions, is struggling to deal with. The evidence also suggests some promising ways to progress, such as targeting heavy users and assisting at-risk groups to develop skills in coping and resilience.
And he makes the wildly radical suggestion that young people themselves have ideas, noting that in a survey of teenagers the idea of a self-limiting application was one of the ideas that came forward. Believing young people can behave responsibly: what is the world coming to!