May 13, 2022

Australians, on the whole, are a conservative lot. Since the end of the Second World War, they have only voted for a change of government seven times — on average, once in every four elections. And throughout that entire period, spanning almost 80 years, the Australian Labor Party ruled for only 26 years. The conservative Liberal-National coalition has won seven of the past nine federal elections.

However, on the rare occasions Labor did win federally, it was when it offered a meaningful alternative to the Coalition. In the 1972, 1983, and 2007 elections, the ALP presented big ideas to an electorate ready for change — and won. By contrast, when the ALP tried to pass itself off as Coalition-lite, voters opted for the full-strength option.

The next federal elections, scheduled for 21 May, could break the mould. Despite some early hiccups, and an apparent lack of enthusiasm among voters for its leader, Anthony Albanese, Labor’s strong poll position has so far held. Labor comfortably leads the Coalition on a two-party-preferred basis 54% to 46%.

Remarkably, this is despite the fact that Labor’s election pitch can be boiled down to being nicer and more competent than the incumbents. Gone are its serious plans to reform the tax system, which increasingly favours high income earners and the asset-wealthy. Although Labor promises to increase the share of renewable energy, coal exports will not be touched. On foreign policy and national security, the major parties’ platforms are almost identical. So why is Labor still looking poised to win?

For one thing, the public has clearly tired of the government and its responsibility-shirking leader. Historically, though, this hasn’t been enough. Enthusiasm for the Coalition hit rock-bottom ahead of the 2019 elections, after successive internal coups removed two election-winning prime ministers in three years. Yet the Coalition still won. This time, however, circumstances may have conspired against another Morrison miracle.

The most difficult thing about governing, according to the British PM Harold Macmillan, was “events, dear boy, events”. And “events” may finally be on Labor’s side. All Albanese has to do is grab the popcorn and watch.

As a rule, Australian voters tend to see the ALP as stronger on health, education, and social services. The Coalition tends to poll better on national security and economic management. Unfortunately for Labor, while the former strengths win state elections, the latter issues appear more decisive in winning federal elections.

Coming into this election, the Coalition has again campaigned heavily on its national security and economic management record. It has sought to paint itself as the David that stood up to the Chinese Goliath — by, for example, introducing tough anti-interference laws, calling for an international inquiry into the origins of the coronavirus, signing up to the AUKUS alliance, and committing to substantial increases to defence spending. It also claims to have delivered strong economic results, such as historically low levels of unemployment, despite the ravages of the pandemic.

The Coalition’s election attack ads, under the slogan “It won’t be easy under Albanese”, routinely denigrate Labor’s national security and economic credentials. They claim that Albanese would be “soft on China”, extending earlier smears that sought to present Labor as “Beijing’s pick” in the election. Morrison even called ALP deputy leader, Richard Marles, a “Manchurian candidate” in February. The Coalition’s ads also highlight Albanese’s earlier support for unpopular tax reforms and his lack of economic experience in government.

How fortuitous for Labor, then, that two unrelated events, both occurring in the middle of the election campaign, have severely undermined the government’s national security and economic management narrative. The first is the 19 April security agreement between China and Solomon Islands, an archipelagic country of around 650,000 people located approximately 2,000km to Australia’s northeast. Although the agreement is secret and its final wording unknown, a draft version was leaked by local opponents and published on Twitter in March. It caused a political storm across the entire region, especially in Australia.

Under the draft agreement, Solomon Islands could request policing and military assistance from China. If the Solomon Islands government consents, China could also “make ship visits to, carry out logistical replenishment in, and have stopover and transition in Solomon Islands, and relevant forces of China can be used to protect the safety of Chinese personnel and major projects in Solomon Islands”. Although permanent bases are not mentioned, many analysts have suggested that the agreement opens the door to China establishing an operations base for its navy, allowing it to potentially block shipping routes between Australia and the US, and across the wider South Pacific.

While other observers, more familiar with the Solomon Islands context, strongly disputed the likelihood of a Chinese military base in the country, Australia’s election campaign was set alight. In a country already anxious about China’s growing power, the agreement seemed to confirm the most alarmist security predictions for a region politicians like to call Australia’s “patch” or “backyard”. Shadow Foreign Minister Penny Wong pounced, calling it “the worst failure of Australian foreign policy in the Pacific since the end of World War Two”. Albanese also called it a “massive foreign policy failure”. Both blamed the agreement on the Coalition’s mismanagement of the relationship with Solomon Islands and other Pacific countries. Wong pinpointed Australia’s declining aid disbursements to the country since the Coalition took over in 2013.

Wong’s claims are obviously hyperbolic. Experts argued that Australia’s influence in the region should not be exaggerated, and that the agreement was also motivated by domestic political considerations in Solomon Islands. Additionally, Wong’s claim that aid declined under the Coalition was also judged inaccurate.

Nonetheless, Labor’s punches had the government rattled, with Morrison struggling to defend his record in the Pacific. He was not helped by a fair bit of exaggeration from his own side, including Deputy PM Barnaby Joyce’s statement that the Solomon Islands could become Australia’s “little Cuba”, and Defence Minister Peter Dutton claiming he now expected “the Chinese to do all they can”. Worse, from the Coalition’s perspective, a survey has found that 72% of voters were “concerned” or “very concerned” about the agreement. The Coalition’s lead over Labor on national security narrowed dramatically from almost 30% in August 2021 to 14% in April 2022.

To make matters even worse for the Coalition, in early May, Australia’s independent central bank, the Reserve Bank of Australia, raised interest rates for the first time in 11 years to combat the growing problem of inflation. The RBA’s decision exposed the deep holes in the government’s economic management success story. Sure, unemployment is low, but underemployment has been worsening for decades, reflecting the fact that many of the jobs created in Australia are casual or part-time. Wage growth has also been stagnating for almost a decade, such that rapidly rising living costs have become a major political issue. Inflation has reared its head in Australia, as in many other countries, but the cause is not a wage-push, as in the Seventies; it is disruption to supply.

Rate rises are, therefore, only going to compound the cost-of-living crisis for many Australian families by making their mortgage and credit card repayments more expensive without an offsetting increase in pay. The problem for the Coalition is that many of the worst-affected are likely to live in the exact same outer-suburban seats it needs to hold in order to stay in government. Tellingly, the rate hike and rising inflation have sparked the first substantive fight between the major parties in this campaign, over how much wages should rise.

None of this is to say that Labor has a clear plan for addressing the cost-of-living crisis — but it’s clear that neither does the government. If Labor wins on 21 May, it should thank its good fortune, not its campaign managers.

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