Economic anger driving people away from major parties

Poor wage growth and higher energy costs have contributed to the shift away from Australia’s major political parties since the global financial crisis, new research reveals, with warnings that support for populist right-wing candidates will grow unless the financial needs of poorer people are addressed.

Three new academic studies to be released on Thursday suggest the Coalition under Peter Dutton failed to capitalise on discontent around the state of the economy and power prices that otherwise would have hurt the electoral chances of Labor and Anthony Albanese.

Despite Labor’s huge election victory, voters once again turned further away from the major parties for their first preference votes.Credit: Alex Ellinghausen, James Brickwood

Compiled by researchers at the Melbourne Institute, one study found “energy-poor households” were 1.4 times more likely to vote for right-wing populist candidates or independents. Energy poverty was also likely to reduce support for Labor by 3.7 percentage points.

At the May 3 election, primary vote support for the two major parties fell to just 63 per cent of all votes, formal and informal. At the 2007 election, held the year before the global financial crisis, more than 82 per cent of voters backed either Labor or the Coalition.

The three studies looked at the impact of subdued wages growth, the strong jobs market and energy costs on voting partners and the rise in minor-party support over recent years.

Economist Dr Kushneel Prakash, one of the authors of the report on energy poverty, said there was a link between energy poverty – the inability to pay for basic services such as heating and cooling – and voting patterns.

He said up to 14 per cent of the population were facing energy poverty, with this group having an 8 percentage point lower chance of supporting the major parties.

Labor was at particular risk as people often identified it with renewable energy sources, which were considered more expensive than traditional forms of energy.

“The data shows this group is less likely to support either of the two major parties and has a higher probability of supporting right-wing populist parties,” he said.

“Political leaders in Australia must find a way to balance the urgent need for climate action with the immediate economic realities we face.”

A separate study on the link between economic dissatisfaction and voting patterns since the financial crisis also suggests people are increasingly fed up with the major parties.

Based on monthly consumer sentiment surveys, it found voters with negative economic expectations were more likely to back minor parties or independents, with this link growing since the mid-2010s. The Westpac-Melbourne Institute monthly measure of consumer confidence released this week showed a lift in May, but pessimists continue to outnumber optimists.

Dissatisfied younger voters had moved to the Greens while older cohorts were shifting their allegiances to other minor parties and independents.

“This is consistent with the view that voters are responding rationally to unmet policy demands and long-standing dissatisfaction with government performance,” it found.

One of this report’s authors, Assistant Professor Viet Nguyen, said growing economic pessimism was affecting major party support.

“The recent win of the Labor Party does not hide the fact minor parties and independents are on track to gain a greater vote share than ever before. Understanding why this is happening is important for safeguarding our stability and democracy,” he said.

The third study looked at the impact of wages and employment growth on voting patterns.

The authors noted that real wages had fallen appreciably between 2021 and 2023. Figures out on Wednesday showed real wages had climbed by a full percentage point over the past 12 months, but there was still a large gap between inflation and wage growth over the past four years.

The study found the drop in wages growth was unlikely to be a major driver of voter dissatisfaction, but the strength of overall jobs growth could be an issue.

One of this study’s authors, Professor Roger Wilkins, said full-time job opportunities had declined considerably among young men without tertiary education qualifications since the global financial crisis.

That itself could lead to “undesirable” consequences for the political system.

“There is no doubt the recent trajectory for wages has not been good and that the long-term productivity growth crucial to sustained real wage growth has been absent for some time now,” he said.

“Regardless of the political implications of this trend, greater focus on improving productivity should be an urgent imperative for policymakers.”

Findings of the three studies will be released on Thursday at the Melbourne Economic Forum.

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