The New Politics Monday Brief – 9 March
Your weekly guide to the issues shaping Australian politics this week.
This week’s briefing outlines the big issues to look out for: the implications of the escalating wars between the United States and Israel, and Iran… the impact of high global oil and gas prices on domestic energy costs and the cost-of-living debate… the continuing argument over migration levels and visa policy… and the ongoing rise of minor parties and the splintering political landscape.
Australia and the escalating conflict in Western Asia
The attacks by the United States and Israel on Iran – and the retaliations – are beginning to weave their way through Australian politics, not because Australia is a central actor in this new war, but because of the reality of its commitments to the alliance. Australia has long tied itself to the United States through the ANZUS Treaty, now further embedded with AUKUS, and successive governments have always offered the defence force to US-led operations across Western Asia, irrespective of what they might be.
That reality became more real after an Iranian drone damaged the Al Minhad air base in the UAE, where Australian personnel have been stationed as part of coalition operations. What will Australia provide in this case? This issue also raises those same old questions about the assumptions within Australia’s foreign policy and strategic interests. For too many years, Australian governments has argued that the participation within US-led military operations is the necessary price of maintaining the alliance, but how is this relevant to Australia’s key interests? This looks like becoming another war that Australia is being dragged into, without considering what the Australian public opinion might be, or even what the merits of this military action are, considering that it seems to be in the interests of the US and Israel alone, and not too many participants.
It also continues that cynical pattern that we all recognise when we see it. Australian governments frequently focus on the alliance and solidarity with the United States during these types of interventions – legal or illegal – while downplaying or ignoring the political case for these overseas deployments in the first place, and a fine example of this was displayed by the Foreign Affairs Minister, Penny Wong, on the ABC’s Insiders this Sunday morning. It’s obvious that decisions made by an out-of-control and maniacal President Donald Trump in Washington, are going to be the same decisions made by governments in Australia. We don’t seem to have a choice.
Energy prices and the return of the 1970s global oil shock
Energy prices are once again being debated in Australian politics (as usual), as war in Western Asia threatens to destabilise the economy and push global oil and gas prices higher. While Australia is physically far away from the conflict, as we found out when the war between Russia and Ukraine commenced in early 2022, international energy markets are highly interconnected, and any disruption affecting major producers such as Iran or the shipping routes through the Strait of Hormuz will quickly flow into commodity markets all around the world.
For Australian households already dealing with persistent cost-of-living pressures and inflation, these higher energy prices always have to be a reminder of politically irresponsible and ridiculous decisions from the past. Australia is one of the world’s largest exporters of liquefied natural gas, yet domestic electricity and gas prices are still heavily influenced by international markets. This is clearly a policy failure, where Australian resources are exported on a large scale to countries such Japan, China and South Korea while domestic consumers pay prices linked to volatile global markets, even buying back Australia gas that was sold to these countries at an exorbitant price.
The expansion of LNG exports over the past two decades has effectively tied east-coast gas prices to international demand, prioritising corporate export profits over long-term energy security for Australian industry and households. The question in times of global instability such as we are experiencing right now is very simple, as it has always been: why should a resource-rich country suffer energy price shocks driven by conflicts on the other side of the world that we have nothing to do with?
An energy crisis will always produce predictable political responses. Governments blame global markets – as Albanese has for cost-of-living issues – the Liberal Party will blame government policy (even though they created the same policies that they are now criticising), and the poor design of Australia’s energy system has rarely had the reform that’s desperately needed, because the politics always gets in the way. And we’ll see it continuing this week –a geopolitical crisis overseas will trigger the same domestic debate at home, without resolving the vulnerabilities in Australia’s energy policy, and consumers will be the ones who will continue to suffer.
Immigration policy and migration levels
Migration is once again returning to the centre of political debate, as the government confirms changes to visa rules and salary thresholds for employer-sponsored migrants, while the Liberal Party has signalled that it will pursue a significantly harsher approach, as part of their proposal for visa appeals to be held outside of Australia, as well as a reduction of the annual migration intake to below 200,000. With net migration currently running above 300,000, this issue sits neatly within housing shortages, labour supply issues, infrastructure, making immigration one of the most politically contentious issues going around in Canberra.
This migration debate is played between those goalposts of economic pragmatism and the theatre of politics, and with those goalposts shifting around quite frequently, it’s difficult to keep an accurate score. Business groups always argue for high levels of migration to address shortages in the labour market and governments of all persuasions in the post-war period, have supported this view, based on supporting economic growth and alleviate the issues that are arising from an ageing workforce.
If immigration is framed around economic issues, it’s always a positive story to tell. But when it veers into empty rhetoric, that’s when the problems arise. The Liberal Party and parties on the right such as One Nation, always look at immigration though the issue of border security, and that idea of protecting our way of life, usually making the specious claim that immigration makes housing more unaffordable, and adds to cost-of-living pressures. Of course, immigration adds some pressure on infrastructure and public services, but blaming the migrant for all the ills of the world is an age-old political tactic from the right, and it’s usually a message that resonates with voters, irrespective of how inaccurate the message is. Who’s got time to explain the benefits of migration, when an easily manufactured mistruth can be blasted out through a megaphone?
This is a dynamic that leaves Australia caught in an endless political debate that leads us nowhere except for the drainpipe, a message readily amplified by the mainstream media. Governments rely on migration to sustain economic expansion, while the right blame migration for the more visible of issues such as housing affordability, infrastructure and… traffic jams.
The continuing fragmentation of politics in Australia
Recent polling suggests that a growing number of voters are open to supporting parties outside Australia’s the traditional two-party system – Labor and the Coalition – including One Nation. Surveys such as the Essential Poll indicate that a substantial number of voters would at least consider voting for the party, reflecting a broader splintering on the right that has been building up for more than a decade. While the major parties such as the Labor Party and the Liberal Party have traditionally been the ones who have been able to form government, their share of the primary vote has eroded in recent times – especially the Liberal Party, which is facing a big litmus test in the upcoming state election in South Australia, and the federal byelection in the seat of Farrer – and this erosion is creating the space for minor parties and independents to influence the national conversation.
Although Labor is in a dominant position federally, it’s not immune from these electoral shifts, and its challenge will be in larger regional and outer-suburban Australia, where economic insecurity and related cultural and “anti-woke” sentiments seem to be on the rise. Historically, these areas have formed Labor’s working-class base, but the general disillusionment with mainstream politics has opened up politics to populist alternatives.
The appeal of figures such as Pauline Hanson doesn’t rely on the details or grand manifestos, but harnessing that grievance that people feel – whether that’s justified or not – challenging political conventions, and giving the messages that people want to hear. This is great retail politics but eventually results in poor governing – Exhibit A: The Abbott government, 2013–2015; Exhibit B: The Morrison government, 2018–2022.
As we’ve seen over the past few months, this political banter from One Nation, and other players on the right, is causing the Liberal Party all sorts of problems. While parties such as One Nation are drawing on support from voters on the right, they are fragmenting the conservative vote and complicating the preference flows, although the preferencing from One Nation to the Coalition has shifted dramatically since the 2022 federal election, up from 64.3 per cent, to 74.5 per cent, according to Anthony Green.
These preference flows will benefit the Coalition electorally, but it means that it’s also forcing the Liberal Party to adopt harsher political positions and rhetoric in order to prevent voters drifting further right, as we’ve seen ever since Angus Taylor became the leader of the opposition last month.
This growth of populist rhetoric isn’t just about ideology but it’s also about certain realities that are happening within the workforce and the economy. Over the past three decades, many voters have experienced stagnant wages, declining job security and rising housing costs, while political elites have often talked about the wonderful state of the economy in terms of gross domestic product, or avoiding recessions. That’s all great, but if people feel like they are not benefiting from governments avoiding recessions, the anti-establishment thinking can become politically powerful, even when the policy responses that are offered lack the detail, are contradictory and, if they were ever implemented, would make problems even worse than they are.
The people who feel excluded from the economy and the social compact that should exist in Australia, are more likely to look elsewhere politically. Whether that leads to a more sustainable support for minor parties such as One Nation – which has always been dogged by incompetence, mismanagement and opportunists – or just continues a broader fragmentation of the two-party system, is currently an unpredictable dynamic in Australian politics.