ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Politics

Australian prime minister's economic plans take by-election hit

Losses dent Turnbull's hopes for another term as head of Coalition government

MELBOURNE -- Australia's center-right government failed to win a single seat in key by-elections on Saturday, raising doubts over the popularity of its economic agenda and Prime Minister Malcolm Turnbull's future as head of the Coalition government.

Turnbull campaigned on a program of slashing corporate taxes ahead of a general election next year, but came away empty-handed in five by-election contests, dashing his hopes for picking up to two marginal seats from the opposition Labor Party.

Labor, which campaigned against government plans to cut business taxes and growing numbers of foreign workers, retained the four seats it picked up in the last federal election, a major vote of confidence for party leader Bill Shorten.

Although no Australian government has won an opposition seat in a by-election since 1920, polls had shown the Coalition in contention to take the marginal Labor seats of Longman and Braddon, located in Queensland and Tasmania, respectively. The Coalition did not field candidates in the safe Labor seats of Perth and Fremantle in Western Australia. A fifth seat, Mayo, in South Australia, was retained by the small Centre Alliance party.

In an especially worrying sign for Turnbull, the Coalition's primary vote fell below 30% in Longman, which is considered a bellwether. If that result is replicated across Queensland, the Coalition would likely be tossed out of power at the next federal election, which is due sometime before May next year.

"The conservative vote is split at least three ways in Queensland, and that may assist Labor to win enough seats there, off its low base, to put it within a whisker of government," said Graeme Orr, a scholar of electoral law at the University of Queensland.

Shorten, a former union leader who has campaigned for greater investment in public services, painted Saturday's results as a repudiation of the government's plans to cut taxes for companies with revenues above 50 million Australian dollars.

"He has made his whole case to be prime minister on the basis of reducing corporate tax rates for big business," Shorten told Nine News on Monday. "It's a bad idea, but if he can't even sell his own economic ideas, he should hand over to someone who can sell economic ideas they actually believe in."

On Sunday, Turnbull downplayed the results as unexceptional and unsurprising, noting that governments usually lose support in by-elections.

"Bill Shorten is punching the air as though he's won the World Cup," Turnbull told reporters in Sydney on Sunday. "The reality is that the Labor Party has secured an average or conventional swing in a by-election to it in Longman and has not secured any swing at all in Braddon."

While pledging to "humbly" consider the by-election results, Turnbull indicated that the government would push ahead with its plans to cut the business tax rate from 30% to 25%.

"We are committed to ensuring that Australia has a competitive company tax rate," said Turnbull, who worked as an investment banker before entering politics.

On Monday, amid reports that some senior Coalition parliamentarians were pushing for a change of course, Finance Minister Mathias Cormann reiterated that the government was "absolutely committed" to passing the tax cuts during the next session.

"It's very important that we protect all businesses across Australia from the impact of lower business tax rates in other parts of the world," Cormann told the Australian Broadcasting Corporation.

The government last year cut taxes for businesses with an annual turnover of less than AU$50 million after securing votes from a number of minor parties in the Senate. Plans to cut the rate for larger companies have stalled amid a lack of cross-party support.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more