Economic Update: Federal Election - Big challenges await the next Government

  • The polls and betting markets suggest that the ALP is likely to win the 2022 election;
  • The performance of independent candidates will be watched.
  • A trend of voting towards non-major parties has been happening for some time;
  • Neither major party will likely control the Senate;
  • The next government will face a number of significant policy challenges.

Every three years’ Australia gets to choose who will be Prime Minister. By international standards this is an unusually short time. According to Heath Pickering from the University of Melbourne, 90% of countries that have a similar parliament structure as Australia have elections every 4 or 5 years for their lower house (with the majority at 5 years). Only Australia, Mexico and the Philippines have a 3-year term. All Australian state and territory lower houses now hold their elections every four years (with a fixed term). 

While we are not unique, Australia is in the minority of countries that have compulsory voting. Typically it has resulted in around 95% of the eligible population voting although there has been a (modest) decline in that proportion over the past decade. Voting patterns have changed over time with the proportion of votes for the two major parties declining over the past thirty years (particularly for the ALP). This has resulted in only a modest decline in the number of seats for the two major parties in the lower house where full preferential voting (voters’ must express a preference towards every candidate) is used. In the Senate where voting is based upon proportional representation (seats are allocated on the proportion of votes received for each candidate) there has been a growing proportion of senators not from the two major parties.  

There are currently 151 House of Representatives seats, with 76 seats needed to win an election. Seats are allocated based on the relative population of each state. Each seat must broadly have the same number of voters (within a 10% margin). The exception is Tasmania as the constitution specifies that each state must have at least five seats (this does not apply to the ACT and NT as they were territories when the legislation was enacted). NSW has the highest proportion of seats of all jurisdictions although that proportion has declined over the past six decades reflecting relatively stronger population growth in other states. The proportion of seats has also declined over time in Victoria and South Australia, increasing in Western Australia and (particularly) Queensland.

There are twelve senators for each state, with two for each of the territories. So while the three most populous states (NSW, Victoria and Queensland) have a bit over three quarters of total seats in the lower house this advantage is neutralised in the Senate (a touch under 50%). In that respect the Australian electoral system is similar to other large democratic countries (such as the US) where the upper house was explicitly structured to favour the smaller states.


To read my full update, click here.


We live in interesting times.


Peter Munckton - Chief Economist