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It might be the end of “Neighbours” after 37 years, but Australian politics still delivers good soap opera.

The Season Finale

The election on Saturday 21st May will decide Australia’s next Prime Minister. All the 151 seats in the House of Representatives are up for grabs, but the Australian voting system can make it difficult for just one party to get over the 76 seat majority line. The Liberal-National Coalition managed to get to exactly that number in the last election three years ago but it looks like a nailbiter season finale this time around.

The Cast

In May 2019, the leader of the right-wing Liberal-National Coalition, Scott Morrison, grabbed a shock victory against the run of play, with all the polls pointing to a Labor victory. By the winter of 2019, his popularity plummeted as he holidayed in Hawaii while bushfires devastated the country. Just a few months after that he saw his reputation resurrected after taking a tough line on pandemic restrictions and locking down Australia as the world fell prey to countless Covid deaths. Now he teeters on the brink once more as Omicron snuck in and federal support programmes ebb away.

Waiting to steal his crown is Anthony Albanese, leader of the left-wing Labor Party. But while ScoMo’s popularity has been on as much of a rollercoaster as the love affair between Scott and Charlene, Albo is more of a Harold Bishop. He’s there, but the love for him is not. Albanese’s net approval rating barely rises above that of Bill Shorten, his vanquished predecessor as Labor leader.

Faced with these two leading men, it’s no surprise voters are switching off. With two weeks left of the campaign, almost one in three said they didn’t know who they were going to vote for. Step forward the new characters for this election series: the “Teal Independents”, so-called because they’re a little bit blue (right-wing) and a little bit green (environmentally-focused). They’re not running as a coherent party, but a number of them have backing from the pressure group Climate 200. This was set up ahead of the last election in order to crowd-fund donations for independent candidates that support “a science-based response to the climate crisis; restoring integrity to politics; and advancing gender equity”, according to its website.

The Plot Twist

Climate 200 could provide the plot twist. The man behind the platform is Simon Holmes à Court, the son of Australia’s first billionaire. Their agenda has gained traction following a spate of parliamentary scandals that began with an allegation of a rape taking place in Parliament House and snowballed into a multitude of reports of misogyny and sexual harassment. Scott Morrison apologised to the rape victim but was criticised for saying he discussed the allegations with his wife first who told him “You have to think about this as a father first. What would you want to happen if it were our girls?”.

He has seen his stock with female voters plummet, with his rating amongst women down to 29% versus 44% at the last election. The most high-profile Teal Independents are all female professionals taking on mostly male Liberal Party MPs in some of Australia’s wealthiest districts. They want to smash the political old boys club and push climate change up the political agenda whilst they do it.

The Cliffhanger

Australia’s electoral system allows people to rank their preferences, so the fate of those independents will depend on how far the sentiment towards the legacy parties has fallen. We have seen across the western world that electorates have had enough of traditional parties. Time and again they’ve voted for None of the Above. In Australia, there is compulsory voting, so if they don’t bother to turn up they risk getting a fine.

This is fertile ground for well-respected and well-known independents to capitalise on such discontent. Watch out for the seat of Kooyong in Melbourne, currently represented by the Finance Minister Josh Frydenberg. One of the Teal Independents, Dr Monique Ryan, is currently topping the polling there. Once all those second preferences are condensed into a two-party run off, a YouGov poll indicates she would win by 53% to 47%.

The Polls

But the Polls, like Paul Robinson, have very much been the villain of the piece. Their spectacular failure at the last election was so bad that the Australian Polling Council was created, with the big pollsters signing up to a code of conduct. They’d like to think they’re more Scott Robinson these days.

Each one has made various tweaks to their methodology, including the MRP model that proved very reliable in the 2019 UK election when YouGov predicted a 68 seat majority for the Conservatives. This “multi-level regression with post-stratification” process – bore off, you dag! – samples representative voters in each constituency and forecasts Labor will win a solid majority of 5, taking 80 seats.

The Issues

Although the unemployment rate is at its lowest levels in 14 years, this is feeding inflationary concerns, not least with the central bank. The Reserve Bank of Australia took the plunge and finally raised interest rates earlier this month for the first time since slashing them to record lows during the pandemic. The Minutes of that meeting showed they considered a bigger hike of 40bp rather than the 25bp on which they settled. They’re concerned about a wage-price spiral and signalled more rate rises were to come.

But inflation has led both of the main contenders to suggest policies that are themselves inflationary: Albo wants to raise the minimum wage while ScoMo has rushed out a plan to allow first homebuyers to take AUD 50,000 out of their pension to buy a house.

The Result?

We expect Labor to win and pass some modest fiscal stimulus measures. The independents will flex their muscle and policy will have a green tinge. The RBA will continue to hike rates, but more patiently than the Federal Reserve, meaning AUD/USD will head lower.

There will be much more interest in the last ever episode of Neighbours this summer than this election as Scott and Charlene are set to return for one last hurrah. Now that really will be a proper Season Finale.

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