Australia’s centre-right government is getting straight back to business after its surprise election victory, pledging to pass signature tax cuts to shore up a slowing economy.
Just hours after Prime Minister Scott Morrison claimed the biggest come-from-behind win in decades, his Liberal-National coalition said it aimed to deliver tax relief for about half of Australia’s 25mn people when parliament reconvenes, perhaps as soon as next month.
“That is our priority piece of legislation,” Treasurer Josh Frydenberg told reporters. Rebates of as much as A$1,080 ($742) could deliver a crucial boost to consumer spending and help buoy an economy in its 28th year of unbroken growth.
Morrison’s pitch for economic stability was at the heart of his coalition’s successful bid for a third term in office, as he urged voters to reject the most progressive agenda in decades from the opposition Labor party. Despite the coalition trailing in most opinion polls for years, Morrison closed the gap with a relentless attack on Labor’s pledge to take tougher action on climate change and strip tax perks from wealthy Australians.
The victory turned Morrison into a conservative hero, with President Donald Trump tweeting “Congratulations to Scott on a GREAT WIN!” For Labor leader Bill Shorten, 52, the loss was akin to Hillary Clinton’s 2016 failure to win the US presidency. He ended up resigning as party chief on a night he expected to celebrate a resounding win.
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With 75% of votes counted, the coalition was on track to win at least 73 seats in the 151-seat lower house, eking out a victory via gains in the mostly rural states of Tasmania and Queensland, according to Australian Broadcasting Corp projections. Labor was on 65 and minor parties on six, with seven seats in doubt.
It may be days before it’s clear whether the coalition gained the 76 seats needed to form an outright majority. Similarly, vote counting is continuing for the Senate, where minor parties and independents may hold the balance of power and influence the legislative agenda. Morrison received a rock star’s reception from the party faithful on Saturday night as he claimed victory. Colleagues were effusive in their praise of his campaign strategy, in which he urged voters not to risk a change of government just as the economy stutters. Wage growth is stagnant, households are saddled with record debt, and Australia risks getting caught in the crossfire of the trade war between its most important ally, the US, and biggest trading partner, China.
“He criss-crossed the country with great energy, belief and conviction,” Frydenberg said. “He was assured, he was confident, he was across the detail.”
Liberal lawmaker Arthur Sinodinos, a former adviser to prime minister John Howard, lauded Morrison’s tactical prowess in mapping out the regions the coalition needed to concentrate on to boost its chances of re-election.
Morrison was the Liberals’ third leader in four years and only took the helm in August. His predecessors Malcolm Turnbull and Tony Abbott were both ousted by their own lawmakers amid deep ideological divides within the party, not least over energy and climate policy.
The victory, and the fact that party rules have now been amended to make it harder to topple leaders, may ensure Morrison is the first prime minister since 2007 to survive a full term.
The jubilation in the government’s ranks contrasts sharply with the soul-searching among Labor lawmakers. Shorten ran on Australia’s most progressive agenda in decades, including tax cuts for low income workers, increases to the minimum wage, sweeping emissions curbs and scaling back concessions for property and stock market investors. That presented a big target for Morrison, with blanket TV ads warning Shorten was “the Bill Australia can’t afford.”
Shortly after conceding defeat, Shorten announced he would step down as opposition leader until the party selects a new leader. His deputy Tanya Plibersek is expected to stand, and infrastructure spokesman Anthony Albanesehas thrown his hat in the ring.
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Australia’s era of growth is a developed-world record. But the harshest housing downturn in a generation and a deepening trade war now threatens that streak, leaving voters receptive to Morrison’s call for continuity. Growth may slow to a six-year low of 2.2% this year, according to economist forecasts compiled by Bloomberg.
Morrison’s argument appears to have resonated in Queensland, where Adani Power Ltd wants to build a controversial mine that could lead to a doubling of Australia’s coal exports. Despite heated opposition from environmentalists, the coalition was set to pick up two seats in the state. Primary vote support there for Labor, which equivocated on its support for the mine as it struggled to balance the need to create blue-collar jobs with its environmental pledges, sank to 27%.
“Morrison out-campaigned Labor and he proved to be a skilled operator in promoting a narrow message,” said Paul Williams, a political analyst at Brisbane’s Griffith University. “Now he’s won, he will need to be wary because it may not end up being a great time to be prime minister. There’s going to be massive challenges because the economy has probably peaked.”
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