BETTER stop blaming everything on 2008.
That’s one message that the world ought to consider from the decade of upheaval in Australian politics. The country has burned through five leaders since Kevin Rudd was elected in 2007, Malcolm Turnbull being the latest to be torched. But ... isn’t this the same nation that has just marked 27 years without a recession? Why the political chaos?
In the rest of the world, it is almost an article of faith that the economic upheavals of the past decade fuelled the votes for Donald Trump and Brexit and much other dislocation and upset.
The political volatility Down Under challenges that: Prosperity doesn’t equal stability. Australia didn’t have a recession. Bill Dudley, who recently retired as head of the New York Fed, spoke warmly of the economy’s performance. Bank of England governor Mark Carney has mentioned it in glowing terms.
Plenty of Australians, however, don’t feel like they are enjoying a boom. Like in nations with less steady growth, there is disillusionment in the electorate, with an increasing number of votes for small, single-issue parties.
That is part of what is going on here. Turnbull has always had a tenuous relationship with conservative rank and file, who hated that he lived in Sydney’s waterfront eastern suburbs, was too cosmopolitan, too keen on marriage equality, and insufficiently inclined to be tough on immigration.
As long as Turnbull was plausibly a winner and delivered tax cuts, he survived. It all started to come unglued last month after special elections for five parliamentary seats. Turnbull’s centre-right coalition of the Liberal and National parties had hoped to claim the Queensland outer suburban district of Longman from Labor. Instead, its vote collapsed, losing support to a hard-right, anti-immigration group called One Nation. That sounds a bit familiar.
It was not long ago when Labor was thought to be in trouble and losing support of its own to smaller parties. The culprit on the centre-left is the Greens, which appeals to voters in once working-class, now gentrified inner-city areas. Labor has to watch this as the old blue-collar industrial base and union membership decline. The party has tacked left to address this.
Long-term demographic changes are eroding traditional bases of support for the two major parties. That has echoes in most Western democracies, with or without a great recession. It’s a reality even the most trusted central bankers and the most thriving economies cannot avoid. — Bloomberg
Daniel Moss writes and edits articles on economics for Bloomberg Opinion. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.