Our political ruts have shaken loose. Will Parliament adapt to the new normal?

Australia Broadcast Center

23-05-2025

It's all too easy to get stuck in ways of thinking about how the world works, often without even realising the presumptions that frame our assessments of the world.
Sometimes it takes a series of shifts in the underlying fabric to jolt us out of the ruts, sometimes just one seismic shift.
There are plenty of these familiar ruts in the way we think about Australian politics, and about how it is reported. And the same is often true for economics.
A most obvious political rut is that the "two" party system is an inevitable feature of our politics, and that those "two" parties are the Australian Labor Party on one side of the fence and the federal Coalition of the Liberal Party and Nationals sits on the other side.
There are other ideas whose echo you can still feel in the dynamics of politics, even if they aren't said out loud all that often.
These include the idea of the "natural party of government" (the Coalition); and that Labor is a bad economic manager.
These ideas really took hold during the long 23-year reign of the Coalition until 1972 during a benign economic period, and then in the often chaotic days of the Whitlam Government which followed, amid the oil shocks of the early 1970s.
But they still resonate today.
Wrapped up in the package are associated assumptions such as: the Coalition represents a wide range of electorates from the cities and the bush; that it is a "broad church" at the centre of politics; and that it has links with the business community which suggest it is part of the "establishment", for those voters who feel reassured by that idea.
And now, in 2025, what do we see?
A group of parties that is almost wiped out in our capital cities in terms of parliamentary representation, that is being challenged by independents in the bush because voters don't feel they are properly represented; that has not just declining membership but major structural problems in its organisations which have been taken over by religious and other groups in some states; that has been pushed toward the fringes of the conservative right; and that has a fractured relationship with most of the business community bar the resources sector (and even that was ruptured by a thought bubble gas policy during the election campaign).
But it has taken a particular sort of self-induced idiocy in the past week to really start to make people see the Coalition for the fractured beast it is.
Consider the numbers in the House of Representatives as posted by the Australian Electoral Commission on Friday (with the nail-biting count for the seat of Bradfield between a Liberal and an Independent down to a margin of just four votes).
Labor has 94 seats and the Coalition 43.
But within that Coalition total, the Liberal Party has just 18 seats, the merged Queensland Party — the LNP — has 16 seats, and the Nationals (NSW and Victoria) nine seats.
That is, the Liberal Party nationally has just a couple of seats more than the Queensland party (a very different beast) and the Nats have the same number of seats as the collective independents.
The Coalition holds less than one third of the seats in the House of Representatives.
We have lived through a long period of very thin majorities, and even minority governments. But also seen the balance in the number of seats swing wildly so you can never assume it will always be thus.
But the last election campaign exposed the true decline in the quality and capacity of the parliamentary Coalition — as well as its underlying party machines — to do politics and to do policy in a way which means it can't be assumed this is just a temporary flesh wound.
Yet its representatives seem to keep talking as if the issue is about carving up the spoils of office and power when they are largely irrelevant for at least the next three years.
The Nationals argued this week that they were taking a stand on high principle — or at least on four demands. These were: support for nuclear power; a $20 billion fund for the regions; breaking up the powers of the big supermarkets; and improved regional telecommunications guarantees.
Think about the origins of some of these policies. We can never be grateful enough to LNP Senator Matt Canavan for putting on the public record that the Coalition's support for nuclear power was only ever designed to get them out of a tight spot on emissions reductions while it continued to support coal-fired power.
And its "die on a hill" support for this noble principle this week had dissipated to a possible fallback position of "it would just be nice to get rid of the moratorium on nuclear" by week's end.
As one Coalition source noted this week, no-one had heard of the $20 billion regional future fund until about four weeks ago (though there had been a similar fund pledged by Scott Morrison in government as a way of getting the Nats to sign up to net zero… which of course they also have talked about dumping).
The powers of supermarkets? Yeah, well that's been going on for a while as an issue with no clear path to being fixed, despite numerous parliamentary and regulatory inquiries about it.
And improved regional communications? Really? Yes, it might be important. But it was something upon which the Nationals — and particularly Barnaby Joyce — blackmailed John Howard about 20 years ago with some success, in terms of pushing Telstra to lift its game.
But does anyone remember the Nats talking about this issue in any conspicuous way in more recent times?
Habits in the media mean that the overwhelming focus of much reporting since the election has been on the future of the Coalition as if it really, really mattered, and as if the disputes were about matters of serious policy substance, instead of dismissing the brawling as the death throes of what are now effectively a group of small fringe parties.
There has been very little focus on what a government with a huge majority might, or should, do with it.
This week's Reserve Bank decision has highlighted just how different the underlying dynamics of the political and policy discussion will be in this term of government, even before politicians, and changing parliamentary numbers, get involved.
We've already been introduced to the "shock of the uncertain" coming from the United States.
But the rates decision — and perhaps even more importantly the language of RBA Governor Michelle Bullock — shows the economy at a pivot point which will transform what we are talking about.
The first term of the Albanese government was framed by the need to deal with a global inflationary shock, and by the need to rebuild a government administrative sector that was often failing not just voters but government capacity to put policy measures in place.
What has often been overlooked, or derided, in those policy constraints was the view of both the government and the Reserve Bank that they wanted to minimise the cost to employment of dealing with inflation, and the government was also trying to address the long decline in real terms of wages, particularly for the lowest paid.
This was always an ambitious cluster of aims, to say the least.
This week's Reserve Bank decision confirms they have collectively achieved it, not just broken the back of inflation.
"The board's strategy over quite some time has been to bring inflation down while avoiding a sharp rise in unemployment," Bullock said this week.
"This is consistent with our dual mandate of price stability and full employment."
While inflation has been the dominant challenge, the government's room to manoeuvre on policy has been constrained and it has overwhelmingly been the RBA that has had the most power over the economic levers.
That now changes. That's not to suggest the government goes wild with spending. But the risks that will be most front of mind will be different: the risk of a slowing economy; the need to maintain — and convey — stability and confidence, particularly given what else is happening in the world.
Deloitte Access Economics' Pradeep Phillip told 7.30 this week: "What we're seeing now is a pivot from managing the cycle with things like inflation to dealing with the structural issues of the economy."
There's also the question of what is happening elsewhere in the world. As the RBA's Bullock observed: "There's now a new set of challenges facing the economy but with inflation declining and the unemployment rate relatively low, we're well positioned to deal with them.
"How the tariffs will affect the global economy are going to depend on a few things: where tariffs will settle following negotiations between the United States and its major trading partners; how the other trading partners respond; the extent to which global supply chains are disrupted by the increased barriers to trade; the degree to which trade can be diverted and the impact of uncertainty on business, investment and household spending."
There's some legislation for the government to pass in coming months. But there are big individual issues to be dealt with, from a new net zero target to an overhaul of environmental processes and energy market reform.
Many of the systemic changes started in the last term have to be bedded down or put into action: from childcare to aged care.
And finally lots of people will be wanting to see if the slow process of ramping up housing construction will finally bear fruit.
Will the Coalition provide any helpful input into any of these discussions? Or will the crossbench independents be the more thoughtful ginger group to be pressing the government?
We have all been shaken out of the ruts of habit by this election. Let's hope our parliament is able to think outside them.
Laura Tingle is 7.30's political editor.