The 2022 Federal election was about change.
The Australian electorate couldn’t have been clearer that they were looking for a change of government, which was delivered. However, they were also looking for a bigger change, and this election has fundamentally changed Australian politics.
The saying goes that ‘oppositions don’t win elections, governments lose them,’ which is no truer than in 2022. The Morrison Government lost the support of the electorate seeing the loss of at least 20 seats. The Liberal Party will likely hold around 55 seats, a disastrous result given that even in the 2007 “Rudd landslide” they managed to hold on to 65 seats.
The big news this year, compared to elections past, is that the massive fall in Liberal support didn’t flow directly to the Labor Party. While Labor did secure a swing and win seats, the biggest beneficiaries of the deserting Liberal votes were the ‘teal’ independents and the Greens.
South Australia, and even more so Western Australia, bucked this trend with a solid swing seeing seats move from the Liberal to Labor column. Only Western Australia’s safest Liberal seat went teal, with Kate Chaney winning in Curtin, while the Labor Party saw a massive 11% swing and picked up four seats from the Liberals. While WA Premier Mark McGowan will no doubt continue a “WA first” approach, there will likely be more opportunities for cooperation between WA and the Commonwealth.
This rise of a ‘third force’ in Australian politics will likely have an impact over multiple terms. While our political structure generally trends towards a two-party system, it is likely that this triangle dynamic will continue for some time.
What is clear is that the ‘climate culture war’ that has divided the political landscape for more than a decade is over. There was a strong focus on climate action in the campaign, and the electorate has delivered a parliament that will overwhelmingly support climate action.
There will likely be at least 15 independents and crossbenchers in the next parliament, up from 6. The newly elected crossbenchers are either independents or Greens and are therefore united on three policy areas that appear to have played a key role in the election result:
· Action on climate change.
· A federal anti-corruption commission.
· Gender equality.
What business should expect
The Albanese government will be markedly different than the previous government, however business should not expect any significant lurch to the left. Labor has committed to continuing most existing programs from the previous government and will progress its own centrist policy agenda.
Albanese has a broad policy platform but business will want to pay particular attention to climate, environment and resources policies.
Climate and environment
Labor has committed to continuing the existing Safeguard Mechanism to drive emissions reduction, focused on large emitters, and to adopt the Business Council of Australia recommendations to gradually reduce the baseline over time to achieve net-zero by 2050. They have an interim target to cut emissions by 43 percent by 2030 which will be enshrined as part of the Paris Agreement.
The Albanese government will no doubt come under pressure from the crossbench to set more ambitious targets on climate and move to a broad-based carbon pricing mechanism. Labor will likely respond to this pressure by seeking to do more within the existing policy framework but is unlikely to go beyond its election commitments for this term of government.
Labor has a strong institutional memory of the 2011 backlash when the Gillard government introduced a carbon price after promising not to do so at the 2010 federal election. Much has changed since 2011, including that large emitters increasingly support a carbon pricing mechanism, and so it may be that an Albanese Government works to develop a more ambitious mechanism to take to the 2025 election.
Outside of the Safeguard Mechanism Labor will also continue elements of a ‘direct action’ approach and has committed up to $3bn from their $15 billion National Reconstruction Fund to invest in green metals, the hydrogen fuel chain, and other ‘clean’ industries.
On environmental regulation, Labor will seek to establish a Federal Environmental Protection Authority. This approach will see federal environment legislation administered by an independent authority and reduce the role of the Environment Minister as a decision-maker. The implementation of this change and its impact on the existing bilateral approvals arrangements will be closely scrutinised by business groups.
Overall, environment policy reflects two long-term trends for businesses to manage:
- A greater appetite for climate action – including for delivering the critical minerals required for the clean energy transition.
- Ever-increasing expectations to manage the local environment and community impact of project development.
Resources
There are no announced changes to existing resources programs, however, Labor has committed $1 billion in investment through loans, equity and guarantees for businesses in “resources value-adding and mining science”. This funding likely represents a particular opportunity for battery and critical minerals companies.
Perhaps the biggest change for Western Australian resource companies will be a Western Australian Resources Minister in Madeleine King, after nine years of the portfolio being held by a Queensland MP.
Next steps
Business should engage early with the new government as Ministers and staff come to grips with their portfolio responsibilities. This transition period will take a few weeks as Ministers are briefed and their staffers recruited.
The Albanese government will likely work hard to build relationships with business, but businesses should be proactive and develop an engagement plan for key Ministers, their staff and Departments. Like all good engagement plans, it will be important to have clear objectives for Commonwealth engagement.
As always, companies engaging with the government should be mindful of integrity and probity requirements. This will be critically important in engaging with a government that has such strong integrity commitments, including the establishment of an independent integrity commission.
In the first instance engaging with the new government might require going back to basics on project briefings and explaining corporate objectives but acting early will position companies for involvement in some of the big debates to come, particularly in the implementation of climate and energy policy.