2022 Election: The Great Realignment

The 2022 Federal election marks the beginning of the Great Realignment in Australia.?Saturday’s results showed surprises occur, but they are not unpredictable. Understanding, interpreting and navigating these trends will be critical to addressing the commercial, environmental, social and governance impacts, especially in a tightening economy.

The Great Realignment has been occurring in the US, the UK and parts of Europe.?It’s where the interests of voters diverge from the policies of those that have traditionally represented them.?It’s where the cynicism felt by many towards politics cuts through party loyalty.

The Climate 200-backed Teals, more than any other group this year, has capitalised on this trend in winning the former Liberal strong holds of Goldstein, Kooyong, Mackellar, North Sydney, Wentworth, Warringah and Curtin.

In addition to climate, a key part of this is gender related. Scott Morrison was viewed as running a government that cynically treated women’s issues.

The Greens have also increased their vote, potentially picking up three Brisbane-based seats Griffith, Ryan and Brisbane.

At least nine of Australia’s top 12 wealthiest seats are now represented by the Climate 200 backed Teal candidates and the Greens.

Sitting behind this is the collapse over the last decade of the primary vote Labor and the Coalition received. In 2007, Labor’s primary vote was 43%.?Now it’s around 31%.?Similarly, the Coalition primary vote in 2010 was 43%, falling to 35%.

However, what’s interesting is the significant increase in Coalition vote in the outer urban Melbourne seats of Gorton and McEwan.?Against that, Labor has tapped into preference flows from disgruntled Coalition voters in a number of other seats including Higgins, Deakin, Menzies, Robertson, and Boothby.

So what does this mean?

With an economic slowdown on the horizon, rising interest rates and the real prospect of stagflation, economic concerns will become greater.

While it may oversimplify the issue, those in wealthier seats are more insulated from tougher economic times. Those in outer urban and regional areas feel economic pain more acutely.

As former Prime Minister John Howard used to say, politics is governed by the iron-law of numbers. And in this case, there are more seats in the outer urban and regional areas compared to those the Teals and Greens can realistically target.

And while some fret about the so called boganisation of the Liberal Party, the truth is whichever party best appeals to those in outer urban areas and regional Australia will form government.

This means Liberal and Labor policies have to be carefully calibrated towards attracting these voters. Policies that focus on cost of living, jobs, secure borders and national security rate high.

Issues of gender can no longer be dismissed or addressed with token statements.

The success of the Teals shows, in part, the rejection of the Liberal party as adequately representing women nationally. Against that, two Liberal candidates stand out as going against the trend – Bridget Archer in Bass and Zoe McKenzie in Flinders.?

The Teals did not focus on Labor-held electorates, and this highlights a potential risk for Labor. How Liberal and Labor respond to women’s interests will play an increasingly significant role in deciding elections.

Climate policy – the focus of Climate 200 backed Teals and the Greens – while important, needs to recognise a simple economic truth: those in outer urban and regional Australia are employed in industries that depend on fossil fuels, and accordingly will pay a higher price if the transition is not handled carefully. Just Transition is viewed as a ticket to the dole queue.

This is particularly the case with calls for significantly higher 2030 targets than either Labor or the Coalition took to the election.?2030 is just over seven years away.

As Labor and the Coalition start the realignment, business needs to consider what it will mean for them.