Liberal Loss of Wentworth Raises Stakes for Business
To say the governing Liberal Party was trounced in the Wentworth byelection on Saturday does not adequately describe the defeat. The near-20 percent swing against the Liberal candidate represents a major byelection rout (note: counting in the seat continues and a final result may be days off).
By Alistair Nicholas
What's more, the likely win by independent candidate Dr Kerryn Phelps means Australia will have a hung Federal Parliament for the remainder of this parliamentary term.
That does not necessarily mean the Coalition Government will collapse. But it will move into minority government, dependent on the support of the cross bench to maintain control of the treasury benches.
What does this mean for business? And how should business respond?
A hung parliament means a lot of key legislation will not be passed. In fact, expect contentious legislation to linger in limbo. The Government will find it difficult to progress contentious legislation on which it lacks bipartisan support.
Even if legislation opposed by the Labor Party can pass the House of Representatives with cross bench support, it would have considerable difficulty also passing the Senate. The Coalition would need to manage difficult negotiations with up to 10 cross bench senators in order to succeed in the upper house. While not impossible to negotiate contentious legislation, it is not a given that the Government's full legislative agenda would succeed in these circumstances.
That means a period of political instability is likely until the general election is called. When it will be called is anyone's guess. Prime Minister Scott Morrison has said he believes governments should run their full terms. In order to avoid two federal elections next year (because of the requirements surrounding a half-senate election) a general election needs to be held by the end of May. The timings of the Victorian election next month and the NSW election in March 2019 also complicate the possibility of the Federal Coalition going to the polls early.
Mind the gap
This is complicated further for business by the Coalition's poor prospects of winning the general election. Although Prime Minister Morrison (ScoMo as he is popularly known) is ahead of Labor's Bill Shorten as preferred Prime Minister, the Liberal and Nationals Coalition is still trailing Labor in the polls by a significant margin. Even if "ScoMo" can start to close the electoral gap a win for the Coalition is still a long way off.
Business simply cannot count on a Coalition victory. It needs to consider the implications of a Labor Government. It needs to take a hard look at Labor's policies for business as a whole and in specific sectors and understand the implications of those policies. It needs to draw up plans to lobby the Labor Party to ensure it adopts policies that will foster business competitiveness and economic growth if Labor wins the election.
That work needs to start now. To begin with, businesses need to conduct political stakeholder audits to ascertain which Labor members of parliament support business-friendly policies in specific sectors and which don't. They need to develop strategies and messages to communicate their perspectives on Labor policies to the right people. And they need strategies to influence the influencers on the decision-makers.
This means businesses need to engage with the Labor Party now, even while sits on the opposition benches. Business cannot wait until Labor is in government to begin its engagement and advocacy campaigns. Being in Opposition means many of Labor?s shadow ministers will have time to meet with businesses and hear their perspectives; they have much more time now than they will have immediately after the election when they would be busy forming government and driving an aggressive legislative agenda. The time to meet with them if business is to have any sway over Labor policy is now, well before the federal election is called.
Companies working with Liberal-aligned government affairs agencies need to find Labor-aligned firms or bipartisan government advocacy firms to help them.
But the window of opportunity will close quickly. With only four parliamentary sitting weeks left before the end of this year, businesses seeking to influence a possible future Labor Government need to be setting up meetings this week and booking their flights to Canberra immediately. The clock is ticking
Alistair is the CEO of Cornerstone Group Australia.