Donald Trump won another election…for the centre left.
First there was Canada with Prime Minister Mark Carney from the centre-left Liberal Party of Canada and now in Prime Minister Australia Anthony’s Australian Labor Party had won a second term with a huge swing to it and a thumping majority right across Australia from coast to coast and from Darwin to the southern tip of Tasmania.
Amazingly both the Liberal Party of Canada and Australian Labor were staring down the barrel of defeat later last year according to opinion polls, but both turned their fortunes around.
The Canada Liberals by switching leaders from Justin Trudeau to Mark Carney and Australian Labor by just slogging it out. But the election of Donald Trump and the tariff war allowed both Prime Minster Carney and Albanese the chance to present a stable government in a geo-political environment of uncertainty and turbulence, especially in the case of Canada with President Trump’s talk of a 51st state.
Mark Carney just had to wrap himself in the Maple Leaf in appeal to Canadian patriotism whilst presenting himself as a former Central Banker and professional economist who could manage global uncertainty and a trade war with Washington. Similarly, Anthony Albanese appealed to Australian values and openness to the world, as well as the security of the nation’s social safety net, with Australia’s universal medical scheme, Medicare and system of strong wages and conditions central to the campaign.
In both Canada and Australia, the conservative oppositions were leading in the polls (the Conservatives in Canada by over 20 points) but were wrong footed by the influence of Donald Trump, not sure whether to try some of the same tactics from the Trump MAGA playbook, or distance themselves from his administration as the tariff confusion spooked markets and the treatment of the Ukraine President Volodymyr Zelenskyy in the White House by President Trump and Vice President JD Vance, appalled even conservative voters. Canadian Opposition leader Pierre Poilievre, who doing well against an unpopular 9-year Prime Minister Justin Trudeau, tried to paint political newcomer Mark Carney as a globalist more comfortable in Switzerland than Saskatoon, but Carney threw the switch to vaudeville enlisting Mike Myers and a number of Canadian celebrities to run a patriotic and successful campaign.
Wrong footed
The Australian Opposition Leader Peter Dutton, who was matching Anthony Albanese late last year, was wrong footed once the election was called, performed poorly, and not helped by new that Trump campaign operatives were ‘helping’ the Liberal National Coalition. Like Pierre Poilievre, Peter Dutton lost his own seat, a historical first for an Opposition Leader, and will quit politics.
But whilst Mark Carney won minority government for the Liberals, Anthony Albanese won an increased majority for Labor who had just scraped over the line in 2022, to win government from an unpopular Prime Minister Scott Morrison. The Albanese win was historic on a number of counts.
First, Albanese is the first incumbent Prime Minister since John Howard to be elected for a second term after several years of revolving door Prime Ministers.
Second, Albanese is the first incumber Labor Prime Minister to win a second term since the legendary Bob Hawke did it in 1984.
Third, Albanese is the first Labor Prime Minister to increase his majority after being elected once already. War time Prime Minister and Labor hero John Curtin increased his majority in 1946, but had been made PM on the floor of the House of Representatives.
Fourth, the Liberal National Party (LNP) coalition were electorally decimated in Australia’s capital cities, and now hold mainly rural seats. The metropolitan Liberals have failed to win back any affluent urban seats from the ‘Teals’ a group of high profile wealthy independent candidates financed by Simon Holmes a Court, in support of climate change action. The coalition did particularly badly with the younger cohort of voters, and Labor ran a number of successful female community-based candidates, especially in Queensland.
Fifth, the election saw the demise of the Greens Party, who declared this was an election on ‘Gaza’ and hardly mentioned the environment at all. Their hostility to the Jewish community lost them votes in inner Sydney and Melbourne and their leader Adam Bandt may lose the seat of Melbourne to Labor.
What’s next?
So’s what next for the new Albanese Government?
First, there is good news on trade. The tariff monkey is off their back, thanks to the failed tariff policies of Xi Jin Ping and Donald Trump, so they can pursue policies on industry innovation and skill formation, without worrying about calls from the left or populist right for a return to tariffs.
Second, having started down China and USA on trade, they can pursue agreements and architecture with ASEAN, India, friends in North East Asia like Japan, South Korea and Taiwan, emerging markets on the Middle East and Africa and Latin America, and now even the European Union is open to possibilities. There will be also closer ties with like minded partners in the UK, New Zealand, Canada and near neighbours in the Pacific.
Third, as mentioned by the re-elected Treasurer, Dr ‘Sunny Jim’ Chalmers, Labor can now look at productivity measurers to help raise living standards. And Labor can also explain the importance of productivity in terms of skills, exports, investment and opportunity, not as a draconian agenda. Peter Dutton learnt that the hard way in attacking working from home (WFH), which may actually be having a positive impact on national productivity as well as on work-family life balance.\
Finally, Labor can now pursue policies on housing, climate innovation, and immigration without relying on green support, so won’t be undermined for pushed into unrealistic positions.
For the LNP, there will be an immediate review of all policies, the campaign and the search for a new leader given Peter Dutton will no longer be in parliament. The front runners seem to be Andrew Hastie, Angus Taylor, Dan Tehan, Jane Hume and Sussan Ley. But they better make the review snappy as we will be back to the polls again in 2028 as Australian federal elections are held every 3 years.
In the meantime, Prime Minister Anthony Albanese, is now in the Parthenon of Australian Labor heroes with Curtin, Chifley, Whitlam, Hawke and Keating. He has a great opportunity to drive Australian economic prosperity and fairness for a second term and beyond.
And now, he can send a big thank you card to the White House, that can be placed next to one from Mark Carney.
*Professor Tim Harcourt is Chief Economist of the Institute for Public Policy and Governance at the University of Technology Sydney (UTS) and host of The Airport Economist channel: https://tickernews.co/shows/airporteconomist/
