The next Federal election will be held on or before 21 May 2022, with the exact date to be determined by Prime Minister Morrison.
According to recent opinion polls, Labor are well ahead and set for a landslide win. Newspoll and Roy Morgan have Labor leading the Coalition by a chunky 8 points on a two party preferred basis.
But things are not so clear cut.
The poll results are at odds with the betting markets where the Coalition are warm favourites at $1.82 against Labor at $2.22. And unlike the opinion polls, the Coalition have been favourites ever since the last election.
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The probable reasons for the divergence between the polls and the betting markets is the flurry of news swirling around on COVID-19, vaccination rates, lockdowns and which side of politics will manage the post-COVID economy better.
The news of these issues is changing quickly, erratically and dramatically, which is swaying voter opinions.
It’s the economy, stupid
For the moment, economics has largely taken a back seat for many voters and for that, the Coalition should be pleased.
A cold hard look at a range of current economic facts reveals problems that can sway the electorate.
Voters, for better or worse, usually place a high weighting on economic management when deciding which way to cast their vote.
On that score, a series of polls over the past 20 years show that the Coalition have consistently been considered ‘better economic managers’, which is a big reason why Labor has only won two elections since 1993.
When we look at recent election results, the Coalition has campaigned on, and won, referring to government debt and deficit, economic growth, low taxes, cutting red tape and improving the living standards of what they termed ‘hard working Australians’.
Fast forward to the 2022 election and economic policy
While no one could blame the Coalition government for the 2020 lockdown recession.
For the rest of its eight year term in office the Coalition owns the economic fundamentals in the same way Labor was held responsible for the fundamentals that results from the global financial crisis and the early 1990’s recession which coincided with a severe global recession.
The government debt and deficit issue was a huge problem for Labor in the aftermath of the 2008 to 2011 global financial crisis.
And this was when annual budget deficits were generally of the order of $20 billion to $50 billion and government debt rose to just $273 billion by the time of the 2013 election. Critically, Labor kept Australia from a recession.
The Coalition government will go the 2022 election with annual budget deficits around $100 billion, government debt will be close to $1 trillion and this will be with two recessions in two years.
According to the government’s figures in the Intergenerational Report, current policy settings will see the budget remain in deficit for the next 40 years.
So much for being ‘back in the black and back on track’ as Treasurer Josh Frydenberg was celebrating just over two years ago.
In terms of economic growth, the news is also problematic for the Morrison government.
When the September quarter GDP data are released in early December, they will show the size of the Australian economy to be smaller than it was three years earlier.
In per capita terms, which is a good measure of individual economic progress, GDP will be lower than at the end of 2015.
These are the economic facts that mean that many people are, and still will be, feeling the impact of the 2021 recession as they turn their minds to who they will vote for.
Despite the massive budget deficits, the government tax take has hit a record high in 2021. Never before has a government taxed its people so much.
au/fiThe tax to GDP ratio will be many percentage points above the levels when Labor have been in power, a fact that few voters are aware of.
When we throw in the explosion of red tape and compliance issues in recent years, the economic credentials of the Coalition are further undermined.
Labor would be wise to have ‘economics’ as a key part of its election campaigning.
It has a lot if issues to highlight to the electorate on economic policy that should see it pick up votes of those interested in economic policy.
It remains to be seen whether the opinion polls or the bookmakers will be the better predictors of the election outcome.
Last time, both were wrong as the Coalition unexpected swept to power on the basis of a scare campaign on economics – Labor tax policy proposals in particular.
The upcoming election just might see the Coalition under pressure on its economic record.