The BGA Australia Team, led by Managing Director Michael “Mick” McNeill, wrote an update to clients on Australia’s upcoming election.

Context

  • Australia’s Labor government under Prime Minister Anthony Albanese continues to grapple with persistent inflation and sluggish economic growth, tightening opinion polls and global uncertainties as it prepares to call an election due by May 2025. Energy and climate policy will feature prominently in the political debates. Increasing public skepticism about the economics and reliability of renewables has emboldened the conservative opposition to criticize the government’s emissions targets, while Labor has accused the opposition of threatening to renege on Australia’s global commitments. High-profile controversies related to immigration policy have damaged the government’s standing, increasing the likelihood of a ministerial reshuffle this year.
  • The outcome of the upcoming U.S. presidential election may become a factor in Albanese’s election timing. The prime minister will choose a date between August 2024 and May 2025. While he prefers to serve a full term, the potential victory of former U.S. President Donald Trump could result in an early election. The government hopes voters will see global uncertainty as a reason to stick with Labor as Australia seeks to balance its strategic alliance with the United States and its trading relationship with China. Albanese will host Chinese Premier Li Qiang this week and is expected to attend the North Atlantic Treaty Organization summit in Washington, D.C., next month.

Significance

  • The cost of living is by far the number one issue for mainstream Australia. Although inflation has declined following a series of interest rate rises, it remains above the Reserve Bank’s 2-3 percent target. Economic growth is sluggish, and unemployment has begun to rise. Another interest rate increase — the last was in November 2023 — would further hurt the government’s public standing. GDP growth per capita has fallen, and economists generally believe that strong migration has been the main factor in Australia avoiding a technical recession.
  • Energy and climate policy are dominating political debate. The public is increasingly concerned that renewable energy subsidies for wind and solar, and the need for new electricity grids, is a poor deal for taxpayers and compromising energy security. The opposition believes including nuclear power — banned in Australia — in the energy mix is the only credible pathway to achieve net-zero emissions. The government is putting pressure on Dutton to reveal where the proposed nuclear sites would be, the cost and the timeframe. Dutton said Labor’s legislated target to reduce emissions 43 percent by 2030 (based on 2005 emissions) is not achievable and that the opposition will only set a 2030 target when in government. The government claims Australia is on track to reach the target and that Dutton would be in “clear breach” of Australia’s Paris commitments.

Implications

  • Global uncertainty and economic headwinds have some in Labor contemplating whether it would be advantageous for Albanese to go to the polls early, perhaps in September 2024. Some believe a Trump victory could complicate the government’s attacks on the opposition’s climate change policies and that Dutton would make the case that he would be best placed to deal with Trump. The Greens have called on Labor to review the U.S. alliance if Trump becomes president.
  • Some are speculating about a minority government during the next term of government. Opinion polls have tightened to around 50-50 after preferences — Labor won with 52-48 in the two-party vote in the 2022 election — and Dutton has closed the gap with Albanese as the preferred prime minister. Labor currently holds a slight majority of 78 in the 151-seat House of Representatives. The Liberal-Nationals opposition holds 55 seats, and independents and minor parties have 18.

We will continue to keep you updated on developments in Australia as they occur. If you have any comments or questions, please contact BGA Australia Managing Director Michael “Mick” McNeill at mmcneill@bowergroupasia.com.

Best regards,

BGA Australia Team

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Managing Director

Mick is a highly-experienced government relations expert and trusted advisor on consensus building, conflict resolution and legislative developments. He has played an integral role in helping parties achieve desired outcomes in areas of national security, health policy, foreign policy and reputational crisis management, as well as media relations, communications campaigns, immigration and human rights. Mick has two decades’ experience working with government as a media analyst, political adviser and NGO advocacy manager. After a stint serving as an adviser to an Australian senator, Mick took on the role of the locally engaged senior political specialist at the U.S. Embassy in ... Read More