WHILE the horse trading is likely to go on for some time as to who sits where in Canberra’s House of Representatives, one thing must be clear for business – get prepared for a lower-growth economy.
WHILE the horse trading is likely to go on for some time as to who sits where in Canberra’s House of Representatives, one thing must be clear for business – get prepared for a lower-growth economy.
The left and right of politics, both at the extremes and in the mainstream, have reshaped themselves as backers of small Australia. No matter who rules the nation, both major camps have vowed to slow immigration and aim for more sustainable policies when it comes to population.
This situation is likely to be exacerbated by the situation the country finds itself in, with a handful of independent players who have the ability to make or break the wishes of both major parties to form a government, coupled with a big drift of voters from Labor to the Greens.
All three of the independents are described as having agrarian socialist tendencies. Queensland MP Bob Katter probably best represents that notion.
Mr Katter is known to have leanings towards protectionism, while it is unclear what the position of Tony Windsor and Rob Oakeshott is on that subject.
All three seem fond of the idea of the national broadband network, which they hope will bring city-style communications to their regional electorates.
There is a little irony in the fact that Labor has likened its NBN strategy to the famous Snowy River Scheme of the 1950s, a project only made possible due to a huge wave of post-war immigration that changed the face of modern Australia.
It is worth noting that these three independents have origins in the National Party and may be unlikely to embrace some of the most extreme environmental policies of the left.
Nationals WA MP Tony Crook, who wrested the seat of O’Connor from Wilson Tuckey, has also placed himself in the mix, but his core demands to drop the mining tax and have federal matching of WA’s Royalties for Regions funding don’t provide much illumination on his overall political leanings.
Mr Crook’s ability to negotiate will be hampered by Prime Minister Julia Gillard’s insistence that the mining tax – expected to slow growth in the resources states such as Western Australia – stays on her agenda.
The other key low-growth force is the Greens, who have won their first lower house seat in a federal general election and will hold the balance of power in the Senate within a year.
Their desire to rein in economic growth is coupled with environmental policies that are expected to inhibit investment across a range of areas, including mining, energy, forestry, construction, fishing and agriculture.
They will argue their policies are growth-oriented, highlighting areas such as renewable energy and other fields considered more sustainable that will benefit. But those gains are unlikely to balance the economic impact of less people, more structured cities and restrictions in resources and energy sectors.
When it’s come to positions on growth, the Coalition is not the polar opposite in this respect.
Liberal leader Tony Abbott probably has had the most influence in this debate of any leader. He has used the issue of refugee arrivals by boat to highlight the nation’s relatively high immigration intake. Mr Abbott also seized on former prime minister Kevin Rudd’s support for a big Australia.
As a result, the Liberals have led the charge to cut immigration, producing a cap of 170,000 a year.
While this may appeal to voters of the sprawling western suburbs of Sydney, immigration has played a major role in both fuelling demand for services and providing the labour to meet that demand. Immigration has been viewed as a significant factor in Australia’s relatively strong performance during the global financial crisis.
Skilled immigration remains important for WA to meet the labour required to both construct major projects and keep high-end work onshore.
Both major parties have said this is a priority but industry has found the current policies of the federal government have hampered its ability to bring in skilled foreigners.
Another important source of future skills is foreigners who come here to be educated. This sector has suffered badly from the policies of the Labor government but educators, including leading universities, are dismayed at the direction of both parties when it comes to immigration policy and its impact on their markets.
Of course, lower growth in the general economy won’t stop the inexorable rise in demand from some sectors.
The ageing population, enhanced by lower immigration, and the policies of almost every party mean that huge costs to government of health will continue to grow, even as other sectors are stunted by the small Australia target.