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Why John Howard will win next year's federal election

By James McConvill - posted Wednesday, 25 October 2006


John Howard will win the 2007 election. A backbench revolt over proposed changes to refugee laws, debate over workplace reforms and a recent turn against Howard over the war in Iraq are a mere distraction from the natural course of the election cycle.

Federal politics in Australia is as easy as, perhaps easier than, taking candy from a baby.

We will inevitably be bombarded with all manner of political analysis leading up to the next election. Commentators will speculate about how close the race is, how issues of the day may affect the outcome and public sentiment about the leadership styles of Howard and Opposition leader Kim Beazley.

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Such analysis is a good way to fill newspapers or get people to switch on the radio or TV. But beyond that it has very little use. There is an inevitability to the 2007 election outcome: Howard will win, Beazley will lose. Since the election of Sir Robert Menzies as prime minister in 1949, Australians have only voted the incumbent federal government out of office four times: in 1972, 1975, 1983 and 1996.

Each time the government was voted out of office, questions over economic management were the key factor. Economic performance is the only reason a federal government is voted out in Australia.

But more needs to be said than just that. While it is axiomatic that the economy influences how people vote, no doubt readers will look to Australia's political history and question whether economic performance is the only factor.

For example, wasn't the change of government in 1972 attributable to the "It's Time" factor of 23 years straight conservative government? Wasn't the 1975 outcome attributable to the events leading up to Sir John Kerr's dismissal of the Whitlam Government? Wasn't the 1983 outcome partially due to the public's love of Bob Hawke's beer-drinking record?

Didn't Keating win the unwinnable election in 1993 on the back of the recession we had to have and soaring unemployment?

Not at all. The history of the federal election cycle is clear. The suggestion that federal election outcomes in Australia are determined by anything other than economic performance assumes that most Australians think beyond their hip pocket when voting. They don't and never will.

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The election cycle at a federal level since 1949 has been dictated by one factor: Australia's economic performance, comprising a combination of the inflation rate and unemployment rate.

Australians are only prepared to vote out a government federally when the economy is experiencing stagflation - a relatively high unemployment rate and high inflation.

Because stagflation is rare in Australia, since the election of the Menzies Government in 1949, change of government at a federal level is also rare.

Between 1949 and 1972 was a period of uninterrupted government at a federal level. Unemployment was historically low, averaging about 2 per cent. Inflationary pressures were also non-existent.

It was not until the start of the 1970s that unemployment began to rise and inflation also became a problem. From 1972-73 to 1980-81, unemployment kept rising: the average rate jumped to about 7 per cent. By 1972, the inflation rate had also leapt to above 7 per cent. With this combination, the long reign of conservative government ended in December 1972.

But the election of a Labor government federally was short-lived. Unemployment continued to worsen between 1972 and 1975 and inflation went through the roof, reaching 17.6 per cent in March 1975. Gough Whitlam was voted out of office at the end of 1975.

Unemployment continued to rise during the Fraser Government, but it stayed in power until March 1983 thanks to a trend downwards in inflation from 1975 to 1982.

But inflationary pressures set in again, with the inflation rate hitting 12.5 per cent in September 1982. With unemployment reaching 9.7 per cent in February 1983, the Fraser Government lost the federal election.

The Hawke-Keating Labor Government was in power for 13 years. Between 1983 and 1990, the unemployment rate fell from 10 per cent to below 6 per cent (5.8 per cent in January 1990), holding back any change in government from inflationary pressures and rising interest rates (which were about 17 per cent at the time of the 1990 election).

After the 1990 election, Australia went into recession. By February 1993, unemployment had reached 10.8 per cent and everyone, including the Labor Party, thought the Hawke-Keating Government was over. The 1993 election was unwinnable for the then prime minister, Paul Keating.

But Keating won. Why? Although unemployment was at record high levels, inflation had dropped significantly. In March 1993, the inflation rate was about 1 per cent. Between 1993 and 1996, unemployment fell to 8.1 per cent, still historically high. But by December 1995, the inflation rate had risen to 5.1 per cent. Keating lost in March 1996 in a landslide to John Howard.

While inflationary pressures are now present in the economy (and may cause a further interest rate rise by the Reserve Bank next month), unemployment has continued to fall to a 30-year low of 4.8 per cent.

Accordingly, all that Beazley's Labor can do is sit back and let the election cycle take its course.

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First published in The Age on October 5, 2006.



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About the Author

James McConvill is a Melbourne lawyer. The opinions expressed are his personal views only, and were written in the
spirit of academic freedom when James was employed as a university lecturer.

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