The great unravelling: the demise of the neoliberal centre Part 1: Australian election surprise

When an election result is as unexpected as Australia’s in May 2019, the battle to explain it can be as fierce as the campaign itself.

The victorious Liberal-National Coalition claims the opposition Labor Party underestimated the aspirations of the working and middle classes to grow their income and wealth. Labor leaders either accept they ran a poor campaign to promote a crowded policy platform, or claim that right-wing parties and the right-wing press misled voters over its contents.

Sounds like the usual ideological tussle between Right and Left.

Yet for many analysts, there’s more to the story.  They point to the disruption of politics in the US and Europe by the newly-assertive ‘alt-right’. There’s talk of  ‘Trump Australians’. Could the same factors and forces that led to the election of Trump and Britain’s vote to leave to EU be at work in Australia? Has a disaffected working class living beyond our major cities abandoned the parties of the Left and parked its votes with the far-right?

Yes, we’re witnessing a structural break in western politics, but all is not quite as it seems!

In this series of blogs, I examine the demise of the ‘neoliberal centre’ in western politics since the Great Recession of 2008, the rise of aggressive ‘tribal’ conservatism, and the struggle of traditional parties of the Right and Left to come to terms with all this.

To understand what’s going on, we need to retrace history with the help of economics, politics and sociology. It’s a journey we need to take to avoid being taken hostage by forces we don’t understand.

Part 1 kicks off with a quick run-down of what we know about the 2019 Australian election (as at July 2019, two months later), the disruption of Australian politics since the Great Recession (or Global Financial Crisis), and points to similarities and differences to the American and British experience.

In future blogs, we’ll explore international politics (why have two leading countries in the Anglosphere seemingly turned their backs on neoliberalism?); economics (what is neoliberalism and where did it come from?); and political philosophy (the contest between conservatism, liberalism and social democracy); to assess what might replace the 30 year neoliberal consensus that has prevailed in many, but not all, ‘western’ nations.

The May 2019 Australian elections

The Australian election result of May 2019 surprised all, including the protagonists. Over the previous three years, the Liberal-National Coalition government seemed tired and divided. It lacked answers to the big problems such as climate change, sluggish wage growth and how to fund services for an ageing population. A series of palace coups meant Australia had three different Coalition Prime Ministers (Abbott-Turnbull-Morrison) in just four years.

The Opposition Labor Party, which had suffered it’s own share of political division (the rotating Prime Ministerships of Rudd-Gillard-Rudd from 2007-13), seemed to have gotten its act together and presented a packed policy agenda to reduce Australia’s contribution to climate change, close high-income tax shelters to fund an expansion of human services such as dental care for retirees, and adjust industrial relations laws to boost wages.

Prime Minister Morrison campaigned on the Coalition’s record of restoring the Budget to surplus (in a year’s time), solid growth in jobs (but not wages) and a promise of large tax cuts (mostly for people on high incomes in 2022 and 2024 – three to five years away).

Labor supporters felt that voters backed its moderate social democratic agenda to reduce inequality of incomes and improve essential services. Labor was ahead in the polls for at least three years, and right up to election day.

Yet the Coalition had an upset win, with 77 seats (51.6% of the vote after the distribution of ‘preferences’ from other parties) compared with 67 seats for Labor (48.4% of the vote).

Overall, the election result was little changed from the 2016 ballot when Labor surprised the pundits by depriving the Coalition of a majority in the House of Representatives. At the time, the Coalition had 74 seats (50.4% of the vote after preferences) compared with Labor’s 69 seats (49.6% of the vote).

The shift to the Coalition in 2019, after preferences, was around 1% of the vote. It was a surprise result, but a close one.

There were a few more surprises in the wash-up to the election.

The Coalition’s ‘primary’ vote actually fell slightly along with Labor’s, (to 42% compared with 33% for Labor plus 10% for the Greens), so the Coalition’s victory came via ‘preferences’ from minor right-wing parties including Hanson’s ‘One Nation’ and Palmer’s ‘United Australia’ (with 7% of the vote) and independents (with 3%).

Another puzzle: Labor and the other party of the Left, the Greens, gained in high-income inner-city seats but lost ground in lower-income outer-urban and rural seats. This was the reverse of what we would expect if people voted for their immediate economic interests.

Associate Professor Ben Philips from ANU compared the size of the swing in different electorates according to characteristics of voters in those seats. Against the view that Labor’s attack on tax shelters swung the vote to the Coalition, he found that seats with older voters and higher incomes were less likely to swing to the Coalition. Those seats with lower incomes, lower eduction levels, more voters identifying as Christians and more families with children were more likely to swing to the Coalition.

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One problem with analysis of voting trends by seat is that it ignores shifts among voters within the same seatResearch of individual voting intentions by Dr Shaun Ratcliff found that, on average, higher wage-earners were still more likely to vote Coalition and lower wage-earners more likely to vote Labor. Contrary to the view that people in poverty swung to the Coalition, he found that disability pension recipients were more than twice as likely to give their first preference to Labor than the Coalition.

voters by incomechart-3

Another straw in the wind: it seems that one reason for the failure of opinion polls to predict the result was that 11% of voters didn’t decide until election day, and 26% didn’t decide until the last week. Among the latter group, 40% voted Coalition and 33% voted Labor.

This is a sign of growing disengagement from politics, reflecting declining trust in the political system. Among disengaged and distrustful voters, Morrison’s simple message that the economy was doing OK under the Coalition and would be at risk under Labor trumped Shorten’s more complicated policy message on services, tax reform, climate change and wages.

Fear of change that many didn’t understand trumped hope that those changes would improve their lives.

Similarities to the US and UK

One explanation for the surprise result was that traditional voting patterns were disrupted by protest votes for right-wing parties, as in the US and UK – though in this case those votes were ‘parked’ with minor parties of the Right before being awarded to the Coalition in preference distributions.

This could explain the paradox that voters swung to the Coalition in seats with lower incomes, and the sharp divisions that emerged between inner city seats (which swung to Labor and the Greens) and outer-urban and rural seats (which swung to the Coalition).

As George Megalogenis explained, there is a pronounced urban/regional divide in voting patterns. Of the 82 seats in the capitals, Labor won 49 and the Liberals 30. Of the 69 in the regions, the Coalition won 47 and Labor just 19. In each zone there were three independents.

The rise in support for the Coalition in seats with people with lower education levels and those identifying as Christians is also consistent with the swing to the Trump in the US.

Naturally, these swinging voters have already been given a name: the Prime Minister dubbed them the ‘quiet Australians’: an echo of the so-called  ‘silent majority’ of conservative voters (mainly from Southern States) that brought Richard Nixon to power in the US in the early 1970s. Others refer to ‘Morrison’s battlers’, echoing the moniker given to outer-urban voters on modest incomes who (it was said) won the 1996 election for Howard.

Surprise election results are great opportunities for myth-making.

Some differences

Waleed Ali points to a big difference between Australian, American and British election results in recent years: the last two backed radical change (albeit by small margins) while Australian voters backed the status quo.

If we’re searching for a recent parallel between Australian, British and American elections, the election of the Abbott government in 2013 is a better example. Like Trump and Farage, Abbott campaigned aggressively (using three-word slogans rather than detailed policy platforms) in opposition. Like Trump, once in government he shocked many (at least in the cities) with his aggressively conservative stance on issues of national identity, climate change and budget policy.

Unlike the US (so far), that agenda – including harsh budget cuts to health, education, and a plan to make young people wait 6 months for unemployment payments – was strongly rejected by voters. When Abbott was deposed two years later, Prime Minister Turnbull and  Treasurer Morrison tried to turn the ship around. ‘Identity politics’ was downplayed and budget policy swung from large cuts to social programs to modest tax increases: including a new tax on large banks, and clamps on tax avoidance by multinational companies and high-end superannuation tax breaks (all this from a Coalition government!). Labor’s campaigns against social spending cuts were neutralised one by one, with compromises on schools and hospitals funding, vocational training, and the removal of a freeze on Medicare rebates for GP visits (though many less visible but damaging cuts to social security payments and community services remain in place, including a four-year wait for social security for new migrants and big cuts to Aboriginal-controlled community services).

In the year when the Commonwealth budget finally showed renewed signs of life, the 2019 Budget promised voters they could have it all: ‘guarantees’ for essential services, the largest personal tax cuts in recent memory, and a budget in surplus. The Coalition’s main selling point was its steady hand on the economic tiller (though the surplus was based on doubtful budget projections that had the economy bouncing back to 3% annual growth and the rate of increase in government spending declining to its lowest level in 50 years).

Labor failed to inspire enough people with its vision for major change across budget policy, workplace relations, and climate change mitigation. It especially failed to connect proposed tax increases and promises to improve services. The Coalition was able to hammer Labor on the purported risks of the closure of tax shelters (including misleading claims that an inheritance tax was planned and tenants’ rents would go up), while many people were simply unaware that all this was paying for a pensioner dental scheme, the removal of out-of-pocket charges for cancer treatment, and more generous child care subsidies.

An analogy may help here. The Matildas lost their first world cup match  against Italy, despite being favoured to win, and ahead in the first half. There were problems with the Aussie defence, but the more serious problem was that the ball was in our half for most of the game. Although they had more possession than Italy, the Matildas didn’t deliver the ball often enough to their best strikers.

Similarly, Labor’s ‘defence’ of its economic policy credibility was its tax policies and its ‘attack’ was the promise of improvements in essential services. The Shadow Treasurer ‘goalie’ ably deflected most Coalition attacks – many of them ruled offside by the fact-checkers – but the vital connection between tax reforms and better services was not made.

Those who swung to the Coalition and minor right-wing parties did not vote for the high-risk, muscular conservatism of a Trump or a Farage. They backed the more traditional, low-risk ‘small-c’ conservatism of  ‘sound economic management’. Unlike the Brits who voted for a leap into the unknown future minus the EU, Ozzie voters who swung the result to the Coalition feared change, and were not convinced of the need for it.

Further, as discussed, it’s not at all clear that working class voters or people on social security payments swung in large numbers to the Coalition. Then again (as discussed in Part 2 of this blog), it’s not at all clear that happened in the US or UK either.

The alt-right in Australia: a paler shadow

Despite attempts by some conservatives in the parties of the Right (the Liberal and National parties) to don the trappings of Trumpian populism (fanning the politics of resentment, especially on race), the politics of isolationism and social reaction are openly backed by only a small minority of Australian voters.

Danielle Wood from the Grattan Institute used the growth of minor parties in Australia  as a barometer for the ‘populist protest vote’ here. The Senate vote for minor parties grew from 11% in 2007 to 26% a decade later. Growth in minor party votes was strongest outside major cities, and in regions with lower incomes, education and migrant populations.

Wood found that economic factors played a role:

“Minor party votes are more likely to be concerned about job security and to have negative views about globalisation and free trade.”

Yet cultural concerns loomed larger than economic ones for minor party voters:

“Some minor party votes want to ‘take back control’ in a world where the direction and pace of change is not to their liking. [They are] particularly nostalgic for a time when ‘people like them’ seemed to have had much more control over their lives and the country’s direction.”

Non-Anglo immigration was a ‘lightning rod’ for agitation against rapid social change, especially in rural areas:

“Concerns about immigration are higher in the regions even though there are fewer migrants there, especially from Asia, the Middle East and Africa.”

Growth in the minor party vote should not be confused with social conservatism: some minor parties in Australia, such as Centre Alliance (formerly Nick Xenophon Team), are socially progressive.

Hanson’s One Nation party has attracted notoriety as the main spear-carrier for the ‘alt-right’ in Australia. It has had the greatest disruptive influence among the minor parties – especially on the conservative side of politics. Hanson was among the few politicians to unashamedly celebrate the election of Trump.

One Nation celebrates Trump’s victory

According to David Marr, it is a kind of ‘white nostalgia’ rather than economic hardship that drives rural voters to back Hanson in Australia:

almost all Hanson’s voters left school early but went on to make a good fist of their lives … her followers aren’t poor or unemployed.’ 

The third item on the list of One Nation’s policies online is ‘bringing back Australian values’.

While most One Nation voters identify as ‘working class’, Wood found that they were much less likely to back policies to reduce income inequality than Labor or Greens voters (the main parties of the Left).

…Right wing populism was absorbed by the Liberal and National Parties, causing indigestion

Hanson first appeared on the scene in the 1996 Federal Election which brought the Liberals’ John Howard to government. She was endorsed as Liberal Party candidate in the socially conservative seat of Ipswich in southern Queensland, then dis-endorsed following racially provocative statements against Asian immigration. She ran as an independent, won the seat, and established the One Nation party shortly afterwards.

Howard prevailed over Hanson in the late 90s and early 2000s by championing many of her causes (especially on migration), while at the same time his party put One Nation last on their how-to-vote cards. In effect, he absorbed her ideas into the political establishment, overturning decades of bipartisanship on immigration and multiculturalism.  There was no need for a ‘new Right’ insurgency to rail against liberal or socialist ‘elites’ because the established Right was already doing the job.  This was credible because conservatism fitted Howard like an old shoe. It speaks volumes of the strengths and weaknesses of the Australian political system (on which more later).

The centrepiece of the absorption strategy was the radically hard line taken by Howard on asylum seekers, beginning with the storming of Norwegian-flagged cargo ship by armed troops to remove middle-eastern refugees to Nauru and Manus Island, where many have been incarcerated for over a decade. Decades of bi-partisanship on migration policy was unwound in a single year.

Tony Abbott repeated this strategy – and turned up the volume – in his successful 2013 election campaign against the then Labor government. This time the main target was Labor’s ‘carbon price’ which was slowing growth in emissions. Abbott and Hanson had a public rapprochement at a book launch.

Abbott and Hanson make up

abbott hanson

 

Muscular conservatism (and disunity on the Labor side) won Abbott the election, but it brought its own problems for the Coalition governments of 2013-19. As discussed, the Abbott government over-reached with its first ‘super-austerity’ budget  in 2014.

He over-reached on cultural or ‘identity’ politics as well. The nail in the coffin of Abbott’s prime-ministership was his ‘captain’s call‘ to reintroduce knighthoods (and then award one to the Duke of Edinburgh) which brought forth groans across the beaches of Australia in the summer of 2015. The first leadership spill against him soon followed.

Three years after the more socially-liberal Turnbull unseated Abbott, he in turn was unseated by conservatives in the Liberal party hoping to recover what they perceived to be its ‘lost base’. The search for the lost base began in earnest after the loss of the seat of Longman in southern Queensland to Labor in a by-election. The leadership spill against Turnbull followed.

This semi-rural seat is close to the conservative ‘heartland’ in the State that gave us the Bjelke-Petersen governments (I lived there, and remember them well). Conservatives in the Liberal and National Parties wanted to repeat the strategy of ‘strategic absorption’ of One Nation’s messages, and Turnbull was judged a poor salesman for that purpose. At that time One Nation was campaigning openly on race, gun ownership, against the science of climate change, and in favour of crocodile and cane toad culling.

As it happened, Hanson’s party scored just 16% of the vote in the seat (up 6%) and its preferencing of the Liberal-National Party failed to get the government candidate over the line. At the 2016 federal election, One Nation scored just 4.3% of the national vote for the Senate.

In effect, a small minority of (mainly) older men in outer-urban and rural areas who lamented the loss of traditional (white) Australian identity held the rest of the electorate to ransom, via its influence on the Liberal and National Parties. The conservatives’ strategy of absorption intensified divisions within the Liberal Party, and these had a strong gender component.

A similar story played out in the media. Sky News ‘after dark’ mimics the alt-right Fox News in the US. Less than 50,000 people watch Sky News after dark, but it’s switched on throughout Parliament House as conservative politicians take their cue from programs watched by vocal Coalition party members.

After Turnbull declared the Liberal Party leadership vacant in August 2018,  the result of the party-room ballot was: ‘hard-right’* (Peter Dutton with 38 votes), ‘moderate’* (Julie Bishop with 11 votes), and ‘pragmatic-right’* (Morrison with 36). Morrison won the second round. [* these labels are the ones used in the media. They are rather loose, especially given strategic voting]

Up to this point, the mainstream Right’s strategy to keep the protest-party Right at bay by absorbing its key messages had worked well in the 1990s and 2000s, but not so well in the 2010s. Support for the alt-right in Australia was not strong or widespread enough to justify the resulting divisions within the Coalition Parties and loss of public support in major cities.

This is not to suggest for a moment that the old ‘White Australia’ mindset is dead. Racism, reluctance to acknowledge environmental risks like climate change and land clearing, and ‘downward resentment’ against people in poverty still thrive (especially outside metropolitan areas) because they are rusted onto our political and social institutions. The absorption strategy of the mainstream parties of the Right was one element of this.

So how did the Coalition pull back from the precipice? By putting internal divisions (on climate policy and ‘identity’ issues) in the deep freeze for nine months and campaigning relentlessly on economic stability. Here it played to public confusion on the difference between the ‘economy’ (which was stalling) and the federal budget (which was nevertheless returning to surplus).

Showing political smarts not seen on the Coalition side since Howard’s time, Morrison campaigned alone (so as not to remind people of divisions in the cabinet), glossed over the government’s lack of policy on contentious issues, and encouraged the media to focus instead on Labor. This they did. The risk of locking in $36 billion in annual tax cuts (almost equal in size to the education budget) was played down, while the risks to retirees and housing markets from Labor’s more modest efforts to close tax shelters was amplified.

What happens when the ‘freeze’ is lifted and a government that wasn’t expected to be re-elected has to confront a slowing economy, a warming planet, and a budget surplus that may well be short-lived? Time will tell.

Conclusion

On the face of it, recent Australian elections haven’t followed the pattern of seismic   disruption by ‘alt right’ parties and leaders as in the US (Trump) and UK (Brexit). We’ve had political tremors but no earthquake.

One reason for this is that Australia hasn’t lived through the same economic volatility over the past decade. There was no recession here in 2008, and middle-class income growth was strong up until then (unlike the US where the incomes of people without university degrees have not grown beyond inflation for the past 40 years).

A second reason is that Australia is one of the most urbanised countries in the OECD (apart from Queensland, where right-wing populism is strongest).

A third reason is our voting system. The Australian political system of compulsory voting and preferences benefits the major parties and forces them to the centre. In the US, the majors have to take a louder, more ideological stance to mobilise their base.

And yet – recent elections reveal new fault lines in the old two-party system dominated by a liberal-conservative bloc and a social democrat-labourist bloc, and between the economic prospects and ideological outlook of inner city, outer urban and country people. The expectations many middle-class outer-urban and country people, that regardless of their qualifications and where they live they could expect steadily rising living standards, and that the traditional social and racial order would be sustained, are crumbling and they’re not happy. They’ve also noticed that they aren’t progressing as well economically as their inner-city cousins, and that governments have become more city-centric.

In that sense, there are parallels between political developments here and elsewhere in the western world. If Australia’s luck doesn’t hold and we suffer a major economic downturn, and if the international environment becomes more fraught, these cracks in the prevailing political order will widen. The neoliberal consensus that is the glue holding the show together, could rupture as it has in the US, UK and across Europe. In the next part we turn to these international experiences.

 

 

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