High-stakes Dunkley race may shape leaders’ fates
The outcome of the Dunkley by-election in Melbourne’s outer suburban heartland could completely alter the dynamics from now until the next election.
While Anthony Albanese spent last weekend attending the Taylor Swift concert in Sydney and a private party hosted by billionaire Anthony Pratt in Melbourne, Peter Dutton was at home in Brisbane having a quiet break with his family.
The contrast was stark: a Prime Minister who maintains self-belief in his public powers of persuasion and an Opposition Leader who sees his job as singularly focused – to methodically and gradually build momentum for change.
However, this weekend both leaders face what many see as the defining political contest of the year.
The outcome of the Dunkley by-election in Melbourne’s outer suburban heartland on Saturday could completely alter the dynamics from now until the next election. For this to happen, the Coalition would have to take the seat from Labor, or come close to it. And the Victorian Liberals are coming from a long way behind.
It also would be the first time since World War II that a first-term government lost a seat in a by-election. History would suggest Labor should hold it.
But there is no doubt Labor officials are more than a little concerned. This has been only re-enforced by the prickly mood of some Labor volunteers out in the field this past week.
Conditions are predisposed for a significant protest vote against the Albanese government, delivered through the prism of a once-in-a-generation cost-of-living crunch.
In a working-class mortgage belt seat with a high welfare dependency and many families in the grip of negative cashflow, at a time the government is not in command of the politics more generally, Dunkley becomes the first serious mid-term judgment of Albanese.
A loss for Labor would confirm that the cost-of-living crisis is a political crisis for Albanese and a failure of the government’s recalibrated tax cuts to deliver the government any political dividend. It would reduce Labor to a one-seat majority in the House of Representatives – a breath away from minority government.
But there is another reason Dunkley becomes significant beyond the obvious. There are 18 Labor-held seats below the Dunkley margin of 6.3 per cent. This is roughly the number of seats the Coalition would have to gain to win a general election, notwithstanding the resignations of Nationals MP Andrew Gee and Liberal MP Russell Broadbent to the crossbench, which has reduced the Coalition to 55 seats.
Yet for Dutton anything less than a swing of 4 per cent to 5 per cent under the prevailing economic conditions would be bound to have a deflating effect on the mood and momentum of the Coalition nationally.
“The mitigating factor is the death of the sitting member … the mood becomes less visceral than it would be if you had a retiring MP,” a senior Liberal MP says. They are referring to Peta Murphy, the Labor member for Dunkley who died in December after a long battle with cancer. Labor cabdiate Jodie Belyea will be seeking to continue her legacy.
It is further complicated by the fact that three of the four state seats that overlap the federal boundaries of Dunkley are all Labor territory.
And while Canberra watchers may think otherwise, in the minds of most voters the Albanese government it still a relatively fresh government. Voters don’t tend to shift that quickly.
“Voters don’t usually admit that they have made a mistake that quickly,” one senior Victorian Liberal says. “In saying that, it is one we should win. It’s the sort of seat that if we are not making major inroads into, there will be cause for concern.
“The mental hurdle will be a minimum of 5 per cent. Anything less than that would signal problems for us. If you are not going close to winning seats like that, then what seats can you win?”
The stakes couldn’t be higher for both leaders – not only for the outcome of Dunkley but also as they struggle to counter the general decline in support for the two major parties more broadly.
Dunkley will send a message. But there is a wider and more fundamental contest that will determine whether the nation is leaning towards an era of minority governments.
Is the fragmentation of the electorate now a permanent fixture or a reaction to circumstances? Labor’s primary vote nationally would suggest that without improvement a hung parliament at the next election becomes likelier.
At 33 per cent, it remains in a bog of disillusionment. If this becomes the new normal, it risks reviving the existential dilemma that was forewarned five years ago in the party’s post-mortem report on the 2019 election loss.
Albanese’s great gamble of tearing up an election promise to keep the stage three tax cuts and to recast them as a redistribution of wealth to voters it needs has failed to ignite the lift in support Labor had been hoping for. If it loses Dunkley, it all will have been for nothing and will confirm that Labor continues to pay the price for the drift of its base to the Greens during the past decade.
“The Greens are now locked in well and truly above 10 per cent,” a senior party analyst observes this week. “You don’t have to have a PhD in arithmetic to work out that Labor of the future is locked into either minority governments or in coalition with the far left.
“Both Tasmania and Queensland could foreshadow that. You could well see minority Labor governments propped up by the Greens in both those states.
“The flip side is that the Coalition is out of the contest unless it can push its primary vote back up over 40 per cent. But it’s getting better. It’s ticking up.
“Anything could happen in a year, but we are looking more and more likely to be entering an era of minority governments.”
A Labor loss, or near loss considering the margin, would confirm that Albanese’s public powers of persuasion are not as formidable as they were. This presents an obvious problem for the government heading into a pre-election period. The latest Newspoll shows no indication that Labor or the Liberal/Nationals are increasing their market share. More than 30 per cent of voters support minor parties or independents.
The problem with Dunkley is the result may well mask this reality. There will be potential to misread the outcome in the context of the broader schism.
There are eight candidates running on the Dunkley ticket, one less than at the general election. It’s not a big field. The difference is that neither One Nation nor the United Australia Party is running candidates as they did at the election where the Liberal primary vote fell to 32 per cent.
The pandemic lockdowns, particularly acute in Victoria, produced a field of freedom parties at the 2022 election that peeled votes away from the right, which hurt the Liberal Party generally. Scott Morrison was also deeply unpopular in Victoria.
The conservative vote to minor or micro parties was close to 10 per cent with a 36 per cent preference flow back to Labor from One Nation and 30 per cent from UAP.
Not that a straight shift across to the Liberal Party would be expected to occur in their absence. But the expectation would be a strong lift in the Coalition primary vote at the by-election on this basis alone. Still, to win, the party will need a primary vote in the low to mid-40s, which means a lot of people would need to change their primary vote from that cast at the federal election.
Then there is the intervention of conservative third-party lobby Advance, which is throwing close to $300,000 into Dunkley in a campaign against Labor on cost of living and border protection.
As Labor officials admit, any movement that throws six-digit sums into a single electorate will have an impact.
This is not something Labor has encountered before at an election. Albanese got a taste of it during the voice referendum when Advance honed what became a formidable campaign model in opposition to the voice.
After a decade of threats that a conservative version of GetUp would emerge to counter the dominance of the unions and left-wing activists, Advance has emerged.
And it is road-testing an election campaign model for the first time in Dunkley.
Labor’s response is that Advance is doing the dirty work, allowing the local Liberal candidate, popular mayor of Frankston Nathan Conroy, to take a higher ground approach to the campaign.
This is an untested model that if successful could present challenges for Labor at a general election if Advance were to target a dozen or more marginal seats. This is not without risk for the Coalition, however, in the longer term. One only has to think back to the left-wing group GetUp and its campaign against Bill Shorten in inner-city seats over the Adani coal project. Part of Shorten’s problem was that GetUp dragged him to the left.
Advance could have the potential to drag Dutton too far from the mainstream, which is where he needs to now position the Coalition as a centre-right party.
“If Labor loses the seat, it changes the dynamic completely,” another Liberal insider says. “It will confirm a protest vote on cost of living. The political class may get worked up about it, but it gives hope to the Coalition that they are on the right track and it will put Albanese very much on the back foot. It will present a huge problem for them. They have fired a huge rocket on tax cuts yet the punters are still unhappy on cost of living. So where do they go from here?
“There has not been a recovery despite what they were saying. It will definitely affect the broader undercurrents, whatever the outcome. If the Coalition wins it means a continuation of the slump Labor was in at the end of last year.”
This week Albanese admitted to a problem Labor has in Dunkley – a high level of disengagement.
The Prime Minister conceded that there had not been the cut-through on the tax cuts the party might have been hoping for.
Hence the campaign this week by Albanese to catapult into a campaign footing using the passage of the tax cuts through parliament and his platform as Prime Minister to spruik the contestable suggestion that they amounted to a significant cost-of-living package. He said he expected voters would forgive him for breaking an election promise to deliver them.
“I think people know that this was not an easy decision but it was the right decision, done for the right reasons,” Albanese said on Wednesday.
“And it’s good economic policy as well. People will be encouraged back into the workforce at a time when we do have workforce shortages, skills shortages.”
Albanese has sought to manage expectations by using the spurious claim that the average by-election swing was 7 per cent, so anything less than that would be a negative outcome for the Coalition.
Dutton also sought to downplay the Coalition’s chances, telling the partyroom this week that the average swing in a by-election against a first-term government over the past 75 years has been just 1.5 per cent.
Whatever the outcome on Saturday, the broader question remains. A lot can happen in a year but there is no doubt that the national political model for Labor now looks remarkably different to the old-style state government models. Peter Beattie, Steve Bracks and Bob Carr all won elections with slim majorities but went on to build large margins for long-term government.
There is no sign that in the past decade Labor has been on a path to replicate this. What the past two years have shown is that the fundamentals for Labor in terms of its primary vote haven’t changed. That doesn’t mean Labor will lose the next election but it makes the prospects of forming majority governments increasingly difficult.
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