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DANIEL:

From Schwartz Media, I’m Daniel James. This is 7am.

Australian politics is changing and it's changing fast, in ways it seems the Labor party and the Coalition really haven’t come to terms with.

And as the electorate splinters, it’s harder than ever for governments to last more than three years.

Just months from an election where a minority government looks likely, scare campaigns about “unholy alliances” have begun, a sign that the two major parties are rattled by the prospect of what’s to come.

Today, author of Minority Report: The New Shape of Australian Politics George Megalogenis, on the new battle lines between the city and the suburbs and how the results of the voice referendum are still reverberating.

It’s Friday, December 6.

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DANIEL:

George, we may just be a few months out from the next federal election. So who's going to win?

GEORGE:

Who's going to win? I think the people of Australia might win if they hang the parliament again. Yeah, I think we've got about three plausible scenarios and the most likely one at the moment, minority Labor government, with Labor finishing, you know, a few seats ahead of the Coalition and being able to form a minority government and a stable one at that. The, sort of, second best scenario is, you know, a bit of a dead heat on the floor, if it is going to be a hung parliament, with the possibility that Peter Dutton might be in a chance of forming a minority government. But he's sort of come at this term of parliament the wrong way around. He's sort of been yelling at the teals, yelling at the Greens, and that's the crossbench that will determine the next government in the event of a hung parliament. And the other scenario which I probably would rule out now but maybe even six months ago I wouldn't have ruled out, is that Labor holds its majority or even increases it slightly because the Coalition are too far from power. But we're in a cost of living crisis. We're in a global inflation shock. And your history tells you that inflation is a government killer, it doesn't matter how new or old the government is. We've already seen at the state and territory level, five out of the last eight elections at the state and territory level have seen a change of government and that's since 2022. So, whilst Albanese's government is one of those governments that came to power from opposition, that doesn't change the fact that we're in an anti-incumbent cycle.

DANIEL:

So what's driving this shift, this diminishing in the primary votes of both the major parties, what's happening here?

GEORGE:

So what we've had since 2010, and it really begins with a thud in 2010, we've had a net swing away from both parties, a swing away from the duopoly in 2010, 2013, 2016, 2019, 2022. Five elections in a row, never happened before, didn't even happen in the depression.

DANIEL:

So that's a trend. That's a trend.

GEORGE:

So that's your trend, right? Labor loses it from its left flanks, the Coalition has lost it from its centre and so the two of them have a one piece of the puzzle, which is the progressive vote. The other piece of the puzzle which now is coming off both sides as well is that Palmer-Hanson grouping, which is around 9 or 10% at the last federal election. And this is the problem for both sides. Because it’s coming off both their piles, it's not the same story that we’ve seen in the past.

DANIEL:

And one of the Coalition’s key attack lines has been that we can’t risk having a minority Labor government, that the teals and the Greens would end up with too much power over the country.

Audio Excerpt - Peter Dutton:

“It will be a disaster. If you think the Albanese government is bad now, wait for it to be a minority government with the Greens, the Green teals and Muslim independents.”

DANIEL:

What have you made of those scare campaigns?

GEORGE:

I find them a little desperate now because the electorate at the last election broke into thirds. The Labor Party's primary was just under 33%, the Coalition's just under 36, and a bit over 30% - highest in the post-war period, highest outside of a depression - for the minor parties and independents. The “none of the above” vote. I think when you begin with a base that's above 30% for independents and minor parties, to tell that third of the Australian electorate that they made a mistake the last time is probably not the best, probably not the best way to go about engaging with a very diverse and fractured electorate. So I don’t think it’s that bright.

If you roll back to the 2022 campaign when that, sort of, teal wave started to form, sort of, very late in the term, when the teals were looming as a new force, Scott Morrison said “don’t”.

Audio Excerpt - Scott Morrisson:

“There is a choice and it's a choice between whether you want the Liberal and Nationals to run the country and continue to have strong economic management, or you want the Labor Party, supported by the Greens and a cavalcade of independents, where you are inviting chaos and weakness.”

GEORGE:

And the electorate said, sure, we will, we’ll do it anyway. Neither of the major party leaders would be making their best case for re-election if they were blaming the electorate for the very low primary votes on both sides.

At the last election, there was a primary vote swing against Labor and a primary vote swing against the Coalition. Coalition lose in a landslide, Labor just creep over the line. You've got a very vulnerable government on arrival.

DANIEL:

Because the Albanese government, as we sit here, only has two seats to play with.

GEORGE:

Two seats to play with. I mean they picked up Aston in the sort of outer east of Melbourne at a by-election in 2023 and then promptly lost the kudos from that, because Peter Dutton then decides to go hard no on the referendum, and before you know it, the electorate re-polarised around that issue.

DANIEL:

And you’ve been looking into that. What do the Voice results tells us about how the electorate has changed? What did you find?

GEORGE:

So this is a bit of a surprise because I think the nation was a bit stunned. Now, you'll recall all the way till about August, the national vote was tracking just about 50%, but the composition of that bare majority was interesting. So Aboriginal Torres Strait Islanders are in the 70s and the 80s. Very, very high support for the voice. The next strongest group were non-English speakers. So New Australia. So New Australia and First Australians were essentially the grand alliance for the Voice. That majority lasts up until that final quarter of the referendum when the disinformation campaign really hit hard in migrant communities.

There's been a shrinking in the progressive zones of the major capitals. Our inner cities in Melbourne and in Sydney, and has been the case in Canberra for a while now, also in parts of Brisbane, are actually getting whiter through gentrification. All the urban crossbench, all of it, every single one of them except for Fowler, so Fowler is Dai Le independent in Western Sydney, all the others, so the teals, the Greens and Andrew Wilkie, all of them vote yes for the Voice, all of them. And the problem for Peter Dutton looking for a majority for a majority Liberal-National Coalition government at the next election is that he's pretty much taken those ten seats off the board. That's obviously not where he's looking to get back to power, he's looking at the outer suburbs where the further you got out of the CBD, the lower the yes vote.

DANIEL:

Coming up after the break - what Julia Gillard’s minority government tells us about what’s ahead.

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DANIEL:

So George, I want to ask you about the 2010 election, which was the last time Australia had a minority government.
Can you tell me about how the government worked in terms of implementing its agenda, and whether it was effective?

GEORGE:

So if you were to say, minority government in Australia, what would it look like if it would function, it would be a government that had a little bit of the rest of the country that didn't belong to it. So you had a couple of regional MPs siding with a Labor government

Audio Excerpt - News Reporter:

“Labor limped to the magic number of 76 with a backing of just two of the three country independents. Rob Oakeshott and Tony Windsor say they went Julia Gillard's way for stability and for country Australia.”

GEORGE:

And a Labor government has effectively, through its Green, sole Green member in the Lower House. Adam Bandt was in his first term for the electorate of Melbourne, and the Greens had the balance of power in the Senate in their own right for the first time and only time at a federal election, That parliament is stable. A minority government but it's a stable parliament and of course, was able to legislate. It as able to legislate a price on carbon...

Audio Excerpt - Julia Gillard:

“The science is clear. Our planet is warming. That warming is caused by carbon pollution, by human activity. And we need to cut carbon pollution.”

GEORGE:

It was able to introduce the NDIS...

Audio Excerpt - Julia Gillard:

“The reason we're so determined to deliver a National Disability Insurance Scheme is we want to make a difference for the lives of 410,000 Australians who have serious disabilities.”

GEORGE:

So that parliament worked. And it was one of those hung parliaments where there's a handful of crossbenchers, only five of them. You know, there were 16 at the last election. We didn't get a hung parliament. But I don't think the parliament, the way it's functioned in this term, has behaved like a parliament that has had a third force projected onto it, which is a progressive force. The parliament has behaved like a duopoly. You still hear Peter Dutton's voice, even though the Coalition numbers on the floor of the House of Representatives are their smallest, as a share of the parliament, ever for the modern Liberal Party. The Liberal Party itself is the minority party within the Coalition. So two thirds of Australians live in the capital city, so why is he the dominant voice the last year and a half? So in a way the system is still behaving like a duopoly. And one of the reasons why that is happening is, weirdly, Labor has a narrow majority, doesn't control the Senate, and the Teals, which are the party - well, the grouping - that can drag the Liberal Party back to the centre, because it now holds seats with traditional Liberal seats in the capitals, they don't really have the balance of power yet.

DANIEL:

Right, so the 2010 hung parliament had a crossbench that was mostly a handful of rural seats. A future minority government will have a broad crossbench made up considerably of teals in inner-city electorates. So how different is the hypothetical 2025 hung parliament going to be from 2010 in practice?

GEORGE:

Yes. One of the things I've been thinking about is, what does a hung parliament look like in terms of who you hear every day in the political debate? So in 2010, you heard Gillard and Abbott but especially Abbott. The next hung parliament with a much deeper crossbench that's more centred in capital cities. So, you've got 16, and of that 16 a good dozen in the capital cities. That crossbench cooperating, pushing against, arguing with a Labour government, you're going to mark the success of that minority government in terms of what it gets through. Are you going to hear the Opposition Leader at that point? And I think this is sort of almost unknowable but, part of me thinks that another election with the Liberals too far away from majority government, you know, that's the electorate saying it twice to them, which is, we've kicked you out of the cities for a reason. They obviously think that there's another majority forming somewhere. They think there's a realignment forming in the outer suburbs, which means that they don't need to worry about the inner city. But they did have a post-election report, which Arthur Sinodinos and Jane Hume co-wrote, which warned them that there's no credible path back to power from the regions alone. Now, the worst case scenario, even if the Lower House looks relatively functional, is that there's incentives after the election, both in the Lower House and especially in the Senate, for major party members to turn themselves into independents. Do you know five senators since the last election have changed sides? Already. Five.

DANIEL:

Is that all?

GEORGE:

That’s all. And it's a mess up there anyway. There'll be a few of them that'll get the temptation to go solo.

DANIEL:

So George, it sounds like you're pretty convinced that the two party system is over. So, if that's the case, what do you think about that personally? How do you think it's going to serve voters as we move forward?

GEORGE:

Yeah look, whilst I'm probably not as terrified of a hung parliament this time around, I think in the long run, you need to have a contest around the centre in Australia. So you need two very, very strong major parties. So I don't think in the long run this is a good thing. It's good to give them all a kick up the backside. I mean, maybe if Australia gets use to the idea of a minority government and it functions, the Opposition is muted in this period because Australians don't want to hear from the side that lost. I'd still like to see a system where the majors can agree on the problems we want to solve and then have an argument about what is the best way to solve them. At the moment we're in this, kind of, half world where clearly some big problems out there, but one side is in denial on some and the other side is, sort of, too weak to lead on them. And that's not where you want to be as a country.

DANIEL:

George, thanks so much for your time.

GEORGE:

Really appreciate it. Thank you Daniel.

DANIEL:

George Megalogenis’ Quarterly Essay: Minority Report is out now. It’s a fascinating read and I highly recommend it.

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DANIEL:

Also in the news today...

NSW Premier Chris Minns has called an ICAC referral against him “outrageous” and “not supported by the facts”.

News broke on Wednesday that a Parliamentary Committee looking into government plans to develop Rosehill Racecourse into 25,000 homes would be referred to the state corruption watchdog when the report is released on Friday.

The inquiry will allege that Minns’ friendship with race course owner Steve McMahon is a conflict of interest.

And,

Bitcoin is at an all time high, worth US 100,000 dollars per bitcoin. That’s around 155,000 Australian dollars for a single bitcoin.

Since election day, the value of bitcoin has grown 45%. Meanwhile, the value of the Australian dollar has slumped in the face of slower GDP growth than expected.

7am is a daily show from Schwartz Media and The Saturday Paper.

It’s made by Atticus Bastow, Cheyne Anderson, Chris Dengate, Zoltan Fesco, Travis Evans, Sarah McVeigh, Ruby Jones and myself - Daniel James.

We’ll be back on Monday.

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