Old parties of the centre must adapt or perish
Throughout the liberal democratic world, the electorate has become highly volatile. The traditional adherence by voters to a party of the centre left or the centre right has atomised. Voters have lost hope. In Britain, the latest polls show the Labour Party and Conservatives each on 17 per cent and the Liberal Democrats – who are akin to the Australian Democrats of years gone by – on 16 per cent. The Greens are also on 16 per cent.
But way ahead of all of these parties is Nigel Farage’s Reform UK party on 27 per cent.
This is just an opinion poll but what’s noteworthy is how volatile the polls have been across the past 16 months since Labour was elected on 34 per cent.
This trend is replicated across most of democratic Europe. In France, the traditional party of the centre right, the Republicans, are polling 12 per cent. The traditional party of the centre left is similarly deeply unpopular. The leading party in France is the party of Marine Le Pen, who may be best described as neither left nor right but as a populist who tells the public exactly what it wants to hear. Italy was once dominated by the centrist Christian Democrats for decades after World War II. They simply don’t exist any more.
In Germany, while the government is a coalition of the centre-right Christian Democrats and the centre-left Social Democratic Party, many voters are turning to the German populist party called Alternative for Germany.
Last week, the Netherlands held a general election. The largest parties were a resurgent liberal party called D66 and the populist party of Geert Wilders. But what’s interesting is that 15 parties won seats in the election and neither D66 nor Wilders’ Freedom Party came anywhere near winning a majority. And so the story goes on throughout Europe. The old stable formula of a centre-left and a centre-right party dominating politics has come to an end.
Then there’s the US. The Republicans have been completely overtaken by Donald Trump and his MAGA force. The Democrats have fragmented. New parties haven’t emerged but the traditional parties have changed dramatically from the parties of Ronald Reagan and more recently Barack Obama.
Why has this happened in almost every democracy in the world? Traditional politics was disrupted by essentially three events.
First, there was the global financial crisis, which undermined public support for liberal economics. For right or for wrong, the public blamed excessive liberalism as being responsible for the crisis, though my view is that it was the mandating by presidents and the congress of banks lending to low-income home buyers who in the end couldn’t finance their mortgages as interest rates went up.
Second, there was the issue of climate change: parties of the centre left became wedded to making huge publicly funded investments in alternative energy, claiming energy prices would fall. In reality this has forced up the price of power, damaging the living standards of low and middle-income voters. Not surprisingly, the punters were more fixated on their declining living standards than they were on the theory that across the next century the planet would get warmer as a result of carbon dioxide emissions.
Third, there was the response to the Covid pandemic. The lockdowns and the compensation that had to be paid to workers led to a huge increase in public expenditure that was financed not only by borrowing but also by central banks essentially printing money. Not surprisingly, this was inflationary and the inflation once more led to a decline in living standards.
Added to this has been the issue of immigration. The public in liberal democracies has been dissatisfied with a huge number of migrants who have come into their countries and caused as a result controversy over social cohesion.
The way of life in these countries that has evolved across hundreds of years has been disrupted by migrants who have brought different conventions and beliefs. In some cases, large numbers of migrants coming in illegally and the failure of government to have rational and carefully calibrated immigration policies have angered the public.
There are other issues that have angered the public. One is rising housing prices, and in all of these countries they have an ageing population and that has placed massive pressure on health services. Injected into society at the same time has been the evolution of two things. One is a more educated public that doesn’t blindly accept the diktats of the elites in ways they once did. And then there is social media, which has spread more widely political antagonism.
In just about every case, the traditional parties have failed to resolve these problems and that explains why voting has atomised and traditional parties have seen their support whittle away.
Until recently, this electoral phenomenon seems to have bypassed Australia. We shouldn’t be too confident our own politics isn’t going to go the same way as the politics of other liberal democracies. Some claim that compulsory voting and our preferential electoral system will guarantee populist parties never really get traction. I think that’s wishful thinking.
Support for the One Nation party has grown quite significantly in recent months, and if articulate and reasonably charismatic politicians such as Barnaby Joyce defect to One Nation its support is likely to grow substantially.
The Greens have yet to eat significantly into the Labor vote but there is potential for that to happen on a greater scale than has been the case up until now.
This is the great challenge in particular for the Liberal and the Labor parties. For them to maintain their dominant positions in Australian politics they will need over the next two years to address those same issues that their counterparts in Europe have failed to address.
They need to demonstrate they have control of immigration, they need to address the issue of declining living standards and inject a new dynamism into the economy regenerating economic growth and rising living standards. They need to have an answer to high housing costs and in particular they need to convince the public they can reduce our extraordinarily high energy prices and stop the haemorrhaging of our major industries.
If they don’t do that, expect the 2028 general election to produce dramatically different results from the 2025 election.
For members of the Labor Party, they shouldn’t take for granted that because they it won a big majority at this year’s election they will easily win the next one. The public is far too volatile to make that assumption.
For the Liberals, their challenge is to recapture the imagination of the dissatisfied public with clear answers. The tried and true commitment to economic liberalism has built modern Australia.
I’ll let them debate the costly policy of net zero but make just one comment on it: it’s never going to happen.
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