Australian Weekly Report

Parties narrow focus on specific seats

Media coverage of the election campaign is converging on a collection of prominent marginal electorates. The current minority government situation means both major parties have moved onto the attack, a disposition which will be particularly taxing for the Government.

Seats belonging to prominent conservatives in the Government or with controversial preselection contests have attracted particular attention. Minister for Home Affairs Peter Dutton —who led the August 2018 leadership challenges against former Prime Minister Malcolm Turnbull — is facing a difficult race in his highly marginal Queensland seat of Dickson. Meanwhile, former Prime Minister Tony Abbott is being challenged by multiple high-profile independents. Prime Minister Scott Morrison’s decision to defy the local branch’s preselection vote in the New South Wales seat of Gilmore has fragmented the conservative vote in the already marginal Liberal-held seat. Meanwhile, the controversy surrounding the departure of Labor Member for Lindsay Emma Husar has raised the Government’s hopes of winning the western Sydney electorate.
 

With both major parties short of a majority, the Government and the Opposition are both seeking to gain seats at the next election. This is particularly difficult for the Government, which will need to defy the polling trend and hold all its existing seats while winning seats from the Opposition. This will impose a significant burden on the Liberal Party’s campaigning resources, which are already depleted after two demanding state elections. With the Opposition and independents emboldened by the Government’s internal discord, those resources will be required to shore up seats which previously seemed unassailable. This is comparable to the 2013 federal election, where the minority Labor Government attempted to reach a majority and experienced a landslide defeat.

Budget issues dominate election campaign

The election campaign has remained focussed on budgetary issues, with both major parties raising doubts about the other’s tax policies.

The Government has continued its criticism of the Opposition’s changes to franking credits, while disputing Leader of the Opposition Bill Shorten’s claim he would not raise taxes on superannuation. Meanwhile, the Opposition has seized on analysis by the Grattan Institute which estimates the Government would need to reduce forecast spending by A$40 billion to meet its budget expectations. With both parties attempting to match each other on short-term tax cuts and spending, most of the debate concerns the impact of these policies beyond the four-year forward estimates.

"I have no idea what Bill Shorten was talking about today when he says he won't be putting increased taxes on superannuation. That's his policy." 

—Prime Minister Scott Morrison disputing Leader of the Opposition Bill Shorten's assertion that his party will not raise taxes on superannuation.

Unemployment rises slightly

The Australian Bureau of Statistics has released the labour force statistics for March 2019, which show the seasonally adjusted unemployment rate increasing by one point to five per cent. The trend unemployment rate remained at five per cent, while the trend underemployment rate was also unmoved at 8.2 per cent. The increase in unemployment occurred despite an 18,000 person rise in full-time employment. With the election campaign focussed on fiscal issues, this development will probably enter political debate, but is unlikely to change the course of the campaign. However, this could hold some significance for interest rates, as last week the Reserve Bank of Australia signalled a potential rate cut if unemployment increased.