Labor Comprehensively Wins Four By-Elections
Labor scored comprehensive wins in four of the five by-elections held on Saturday.
There were swings to Labor on a two party preferred basis in all four of these seats: 0.2% in Braddon; 3.7% in Longman; 9.7% in Fremantle and 10% in Perth.
In Mayo, the Centre Alliance Party’s Rebekha Sharkie secured a 3.1% swing from the Liberals.
The biggest damage to the LNP was done in Longman where its primary vote collapsed below 30%.
There are two big messages for the government: the public doesn’t like the idea of big tax cuts for the banks and something will need to be done about funding for Catholic schools.
Labor leader Bill Shorten was understandably elated at the wins.
He said that they were a signpost that Labor would win the next election.
Malcolm Turnbull disagreed and tried to put the best possible spin on the result.
“I see that Bill Shorten is punching the air like he’s won the World Cup,” he said.
“There’s not a lot to celebrate for the Labor Party. There’s certainly nothing to crow about.”
Mr Shorten predictably said that the wins were vindications of Labor’s policies of more funding for health and education and no tax cuts for the “big end of town.”
“Labor did well. I think that’s a fair statement, that’s not being arrogant, Labor did do well,” Mr Shorten said.
“If Malcolm Turnbull thinks that Australians are happy with the healthcare system that he is helping fund, he is even more out of touch than I could have imagined.”
Among the lessons that the government needs to take out of these defeats are that it will have to choose better candidates for marginal seats, preferably younger and female.
It will also have to organise better ground campaigns if it wants to neutralise Labor’s populist campaigns.
Finally, in Queensland it will have to develop a strategy to prevent the leakage of votes to Pauline Hanson’s One Nation.
One prospect of concern is the possibility that the government will drop the policy of tax cuts for businesses with turnovers of more than $50 million.
The main thrust of Labor’s campaign has been directed at the banks, arguing that they should not be rewarded for their bad behaviour.
However at the moment the banks are running into a situation where liquidity is becoming tighter and the cost of funds are rising.
This means that small and medium sized businesses are likely to find it difficult to secure affordable loans to expand which, in turn, could negate the impact of the tax cuts for these smaller businesses.
As a consequence this could well lead to a softer labour market which will make it less likely that wages will increase.
This will suit Labor in the short term because it will improve its chances of being elected to government.
However once it is in government Labor will be expected to do something about wages.
If the labour market is soft then wage rises through government intervention will lead to rising unemployment.
In the circumstances the government should stick with its policy even though it is unlikely that it will be able to get it passed through the Senate.