With one of the most protracted Federal election campaigns now over, attention has shifted to what the result means for families, business and the economy.
This memo provides insights from Rowland’s Government and Public Affairs team about the likely impact of the election result on businesses – particularly Queensland-based organisations. While the swing to the Coalition across most of Australia was significant, the result in Queensland was at odds with pre-election polling that showed many ALP seats at risk. It now seems likely that just two seats – Petrie and Fairfax – will change hands. The Rockhampton-based seat of Capricornia remains on a knife-edge, as counting continues.
However, the most surprising outcome of the campaign is the Senate result. The balance of power from 1 July 2014 will likely be held by an assortment of minor parties, creating a headache for the Abbott Government to negotiate the passage of legislation. This also raises questions among political commentators about the need for a national conversation about optional preferential voting for the Senate.
While the outcome of some seats is expected to be days, or potentially weeks away, the strong result, and return to certainty, is a relief for business given the election campaign has effectively run since January.
Breaking: Major reform of Queensland Public Service
Premier Campbell Newman has this morning reshuffled the heads of key Government departments in order to fill a vacancy created by the resignation of Tony O’Connell, Director General of Health and Debbie Best, Director General of the Department of Aboriginal, Torres Strait Islander and Multicultural Affairs.
The Chief Executive of the Public Service Commission, Ian Maynard becomes the new Director General of Health. His position at the Public Service Commission will be filled by the Director General of Environment and Heritage Protection, Andrew Chesterman.
The vacancy created by Chesterman will be filled by Jon Black, the Director General of Energy and Water Supply. Black’s position is to be filled by Natural Resources and Mines Director General, Dan Hunt.
Dr Brett Heyward will serve as Director General of Natural Resources and Mines. Sue Rickerby will serve as Director General of Science, Information Technology, Innovation and the Arts.
Co-operation with the Queensland Government
A Coalition Government in Canberra gives increased impetus to Premier Newman’s reform agenda.
Mr Newman said this morning gaining environmental approval for development projects in Queensland was his top priority. The Premier will be keen to move on the Coalition’s policy of delegating federal environmental approvals to the states to remove ‘green tape’ and get projects moving. Getting this reform through the ALP-Greens block in the Senate will be an early challenge for the Abbott Government.
The 2013 Federal election has thrown up some unexpected results that will have an influence on the political landscape for the new Commonwealth Government.
Clive Palmer: The Palmer United Party polled more strongly than expected, winning two Senate seats and possibly the seat of Fairfax for Palmer himself. Beyond the major parties and Greens, there will be eight crossbench senators from 1 July 2014 and Palmer will have some leverage in legislative reform. The maverick party has received widespread support, securing 5.6% of the vote in the House of Representatives, including 11.4% in Queensland. The way that Clive Palmer and PUP participate in public policy debate will determine whether they become a one-term phenomenon.
Micro parties: Although the make-up of the Senate is unlikely to be clear for some time, it appears the Abbott Government will have 32 Upper House seats from 1 July 2014 and will need to negotiate with a raft of micro-parties. In addition to two PUP senators, the Government may have to contend with the special interests of the Australian Motoring Enthusiasts Party (Victoria), Australian Sports Party (WA), Liberal Democrats (NSW), and Family First (SA) to smooth the passage of legislation.
Mal Brough: The highly regarded former Howard Government minister returns to parliament with a win in Fisher. Mal Brough held a number of ministerial posts between 2004 and 2007 and was seen as a strong performer. Tony Abbott has said his front bench will remain in place as they take Government, presenting him the challenge of finding a role to make the most of Brough’s experience.
Barnaby Joyce: Joyce successfully made the transition from the Senate to the House of Representatives, winning the seat of New England. As former Shadow Minister for Regional Development and Leader of The Nationals in the Senate, Joyce strengthens his party’s leadership succession plans now that he sits in the Lower House. Indeed, Nationals’ Leader Warren Truss said the party’s election result was its best in decades, with the party picking up three seats in the Lower House and potentially an Upper House seat in Western Australia. This strengthens the negotiating position of the party and could result in fine-tuning of Coalition policies.
Wayne Swan: The former Treasurer epitomised the stronger than expected polling for the ALP, winning Lilley over the LNP’s second-time candidate, Rod McGarvie. Swan is expected to once again feature in the ALP front bench.
The Greens: Despite a 3.3 per cent swing against the Party nationally, the Greens look likely to increase their representation in the Senate with an extra seat in Victoria. Despite a tough fight in South Australia, it also looks likely that Senator Sarah Hanson-Young has retained her position.
Katter: Bob Katter hung on to his seat of Kennedy with his majority reduced from 18 per cent to 2 per cent. Nationally, Katter’s Australia Party polled only 0.99 per cent of the primary vote. His political fortunes are in reverse and the next federal election may well be the fight of Katter’s life.
Bill Glasson: An energetic local campaign was not enough to unseat Kevin Rudd, but won Bill Glasson a lot of popular support. Glasson won a greater share of the primary vote and enjoyed a two-party preferred swing of five per cent. Throughout the campaign, Rudd declined to commit to a full term as Member for Griffith if he lost Government and he is coming under pressure to retire in order to give the incoming Opposition Leader a clean slate. A by-election in Griffith would be a very interesting and closely-watched contest.
Peter Beattie: Parachuting into Forde at the expense of the pre-selected ALP candidate worked against the former Queensland Premier. Beattie not only failed to win the seat of Forde but suffered a 2.5 per cent swing to the LNP incumbent.
Newly elected senators will take their seats in July 2014. This means the current makeup of the Upper House will be crucial to the passage of priority legislative changes to repeal the Carbon Tax and the Mining Resources Rent Tax.
Between the election and July 2014, the Senate will be made up of:
- 34 members of the Coalition
- 31 members of the ALP
- 11 cross-bench senators, including nine Greens senators.
In order to pass key legislation before July 2014, the Coalition will be forced to negotiate with Labor and the Greens to secure a majority of 39 senators in key votes. A substantial majority in the House of Representatives gives the Abbott Government a decisive mandate for change. The question remains whether the new Opposition Leader will honour that mandate and support Prime Minister Abbott’s legislative reforms.
While Tony Abbott committed to keep his Opposition front bench if the Coalition was elected, it appears likely there may be some changes when the Ministry is announced. A meeting of the Coalition parties is expected later this week with a formal announcement of Cabinet responsibilities early next week.
Mr Abbott has 32 people in his shadow ministry which is two more than is permitted under the Ministers of State Act. This may result in fewer junior ministers and more parliamentary secretaries.
There has been speculation during the election campaign that Foreign Affairs and Trade would be separated to create a more substantial Trade and Investment portfolio. Although the Trade portfolio has traditionally been held by a National Party member, it seems likely the new ‘super portfolio’ will be held by Shadow Finance Minister, Andrew Robb.
It is currently unclear whether Senator Arthur Sinodinos, Shadow Parliamentary Secretary and mooted Finance Minister, will hold his seat.
Mr Abbott has already indicated Indigenous Affairs will become part of the Department of Prime Minster and Cabinet, although the portfolio will also retain a dedicated minister.
Queensland is likely to be well-represented with four senior ministers in Prime Minister Abbott’s first Cabinet.
- Warren Truss: The Leader of the Nationals, Deputy Prime Minister and Member for Wide Bay is likely to retain the Infrastructure and Transport portfolio
- Senator George Brandis: The Brisbane-based QC will almost certainly serve as Attorney General in an Abbott Government. He will also become Deputy Leader of the Government in the Senate.
- Ian Macfarlane: The close confidante of Tony Abbott and Shadow Minister for Energy and Resources is likely to return to the portfolio he held for six years in the Howard Government.
- Peter Dutton: Dutton will serve as Minister for Health and Ageing after increasing his margin in the formerly marginal seat of Dickson, on Brisbane’s northside.
- Brett Mason: Currently serving as Shadow Minister for Universities and Research, it seems likely the Brisbane-based Senator will hold a position in the outer ministry of an Abbott Government.
- Stuart Robert: The former Army Officer and third-term MP is likely to take a senior position in Abbott’s outer ministry. Robert currently serves as the Coalition’s junior defence spokesman.
- Parliamentary secretaries: Senator Ian Macdonald (Northern and Remote Australia), Teresa Gambaro (International Development Assistance), Dr Andrew Laming (Regional Health Services and Indigenous Health) are all members of Tony Abbott’s team of shadow Parliamentary Secretaries. It remains to be seen what role each will have.
- Bruce Scott: Though Scott will not feature in the Ministry, the former Veterans’ Affairs Minister is likely to be a candidate for Speaker, along with Bronwyn Bishop.
Prime Minister Abbott’s first non-legislative priority will be establishing a National Commission of Audit with a report expected within four months. The Prime Minister’s rationale for the tight timeframe is to ensure ”the operations of government can be improved and streamlined while a new government has maximum political capital to take hard decisions”.
While many pundits have drawn comparisons with the Newman Government’s Commission of Audit, it is also worth looking back at the Terms of Reference for the National Commission of Audit instituted by Prime Minister Abbott’s political mentor, John Howard in 1996.
The 1996 Commission had a broad-ranging brief, covering topics from the impact of long-term demographic change on the budgetary position to identifying service delivery overlaps between the states and the Commonwealth, and advising on the matters to be included in a Charter of Budget Honesty.
The Commission’s recommendations included across the board efficiency targets for all government agencies of between 10 and 20 per cent of running costs over three years, and devolving responsibility for a range of services to the states including health; pre-school, primary and secondary school education; and environmental protection. The Commission preceded the Howard Government’s toughest budget, delivered in August 1996 that set out to reduce the deficit by $7.2 billion in two years and return a surplus within a term.
The Terms of Reference for the Coalition’s audit are expected to be deliberately broad. In commentary to date, senior Coalition members have said the Commission is about identifying savings and efficiencies in all areas of government and delivering better value for money and sustainable budget surpluses into the future. The newly elected government is expected to appoint the Commission and set its Terms of Reference within the next few weeks.
During the campaign, Tony Abbott said he would be “an infrastructure Prime Minister”, beefing up the role of Infrastructure Australia and committing to an annual progress report on major projects to the Parliament.
The Coalition’s infrastructure policy commitments to Queensland include:
- $6.7 billion for repairs and upgrades to the Bruce Highway. The State Government is already progressing this upgrade, having appointed a taskforce to oversee the critical project and various smaller components planned or underway. Expect an early announcement/photo opportunity demonstrating progress, cooperation and potentially outlining the forward funding program and next steps, especially as the highway runs through the electorate of the expected Federal Infrastructure Minister – Warren Truss.
- $1 billion for the Gateway Motorway upgrade. Planning for the upgrade project is already underway and works to aid congestion on and around the motorway are also progressing.
- $300 million to finalise plans for the Melbourne to Brisbane inland rail freight line. ARTC will establish a ten-year construction plan with work to commence within three years. Infrastructure Australia will evaluate project economics and assess private sector proposals.
- Federal funding for the Moreton Bay Rail Link.