Though the opposing Labor party leads in the polls, there is time for the incumbent coalition to regain voter support
While it remains to be seen whether Anthony Albanese will be able to secure an election victory to put his proposed policies into action, B2B firms and local teams should proactively prepare for the potential ramifications of a Labor victory in May.
First, firms should prepare for a shift in public investments away from infrastructure projects and toward domestic manufacturing under Albanese’s industrial policies. Specifically, Albanese has highlighted that domestic production of ferries, trams, trains, and military projects will be priority areas for investments. Second, firms should prepare for heightened competition from local players for government contracts as per the Labor party’s Buy Australian Plan. Third, firms that have production facilities in Australia should expect the government to ramp up its emission reduction measures by promoting renewable energy and transparency on pollutants emitted, as highlighted in the Powering Australia plan. Last, firms with business reliant on the construction industry should actively seek out opportunities to benefit from the Labor party’s AUD 10 billion planned investment into public housing projects.
Overview
The date for Australian elections has officially been set for May 21. Currently, the opposing Australia Labor Party, led by candidate Albanese, has the advantage in the polls, leading the coalition by 53 points to 47. With five weeks of campaigning to go, there is still time for the incumbent Liberals-Nationals coalition, led by Prime Minister Scott Morrison, to pull off a surprise victory, as it did in 2019.
Our View
Although momentum is clearly on the Labor party’s side, it is too early to count out Scott Morrison in the election race, particularly as the polls incorrectly predicted a Labor win in the 2019 election. Furthermore, a closer look at the polling data shows that Labor’s lead in the national election is not as commanding as it may seem. While Australians are generally more supportive of Labor than the Coalition as of now, they aren’t convinced that Albanese will be a good prime minister. Polls from The Australian show that 44% of voters think Scott Morrison would make a better prime minister, compared to the 39% who think Albanese would be better. In many ways, the two candidates’ policies are very well aligned. Both the Liberal-National coalition and the Australian Labor Party have highlighted job creation and lowering the cost of living as the core pillars of their economic agenda. Labor has also stated that it will maintain current foreign policies, although it will likely adopt a softer tone with China. In addition, both parties have promised to make similar changes to the country’s tax policies, aiming to reduce the tax burden on households and crack down on tax loopholes to prevent large firms from avoiding taxes. The two main areas where the Coalition and Labor differ are on industrial and climate policies. Labor wants to shift the focus of public investments from infrastructure projects to domestic manufacturing and pursue more ambitious targets for reducing the country’s emissions.
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