Australian elections: Why Liberals lost so badly and challenges facing Prime Minister Albanese

Australian mainstream media – both right and left wing - is full of superlatives in describing the Australian Labour Party’s victory under Prime Minister Anthony Albanese (pictured) in federal elections held on May 3, 2025. Before I discuss how historic or remarkable Albanese’s victory was and poor performance of the Opposition, the readers need to appreciate some basic facts about Australian democracy, writes Vidya S Sharma*, Ph.D.

AUSTRALIAN ELECTION PRIMER

Australia has a bicameral Westminster-style parliamentary democracy. The Federal Parliament comprises (a) the Members of the House of Representatives (also Lower House; its members are called MPs) and the Senate (Upper House; its members are called senators).

Voting is compulsory for an Australian citizen. My apologies, I must say the Australian subjects as the King/Queen of the United Kingdom is also King/Queen of Australia. The latter is represented in Australia by the Governor-General.

Australia has a preferential voting system and not the first past the post system that exists in the UK, India, the US, Canada, etc. The preferential voting system requires that a voter must express his/her preferences for all the candidates contesting a particular seat in order of his/her preferences from 1, 2, 3, etc.

If a candidate gets more than 50% of the first preference votes, the person is declared the winner. However, it does not happen very often except in a very safe seat for a particular party.

Otherwise, the candidate who gets the minimum number of first preference votes is eliminated, and his/her votes are then distributed to the remaining candidates in order of the preferences the eliminated candidate’s voters have expressed. This process of elimination goes on until only two candidates are left. Of these two, whoever gets more votes is declared the winner.

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Thus, the preferential system of voting means that a candidate belonging to an extreme radical left or far right party finds it difficult, if not impossible, to get elected unless he/she is so popular as to attract more than 50% in the first round of counting or he/she has done shrewd preference swap deals with other candidates or is standing as a candidate for one of the major parties.

Similarly, a voter with extreme left- or right-wing views might give his/her first preference to a candidate most aligned with his/her political views, but, in the final analysis, is forced to choose a candidate who is either left or right of the centre.

In other words, in Australia, a party of extreme right or left views cannot form a government. The elections are won by a party that can occupy and broaden the centre ground.

The members of the Upper House or the Senate are elected on a different basis from MPs in the House of Representatives (Lower House).

The Senate comprises 76 members: 12 Senators are chosen for each of the six States irrespective of its size or population and two Senators each for the Australian Capital Territory and the Northern Territory.

Each State or Territory votes as one electorate. The Senators are elected by a system of proportional representation which ensures that the proportion of seats won by each party in each State or Territory closely reflects the proportion of the votes gained by that party in that State or Territory. So it is easier for minor parties or a high profile independent to win a seat in the Senate by doing clever preference deals.

For example, Mr. Ricky Muir, representing a political party called, The Australian Motoring Enthusiast Party, was elected as a Senator for the State of Victoria (its population in 2013 was around 5.75 mill.) by receiving merely 479 or 0.0142% first preference votes in 2013.

A REMARKABLE VICTORY

Both within the Australian Labour Party (ALP or Labour Party) and nationally, Anthony Albanese is in the most powerful position of all prime ministers in modern times perhaps with the exception of Malcolm Fraser (the 22nd prime minister of Australia from 1975 to 1983) and certainly of all Labour leaders since World War II, and possibly of any ALP prime minister since the Federation in January 1, 1901.

The number of MPs comprising the Lower House has increased with the growth in population in Australia. The present House is composed of 150 seats, ie, to form a majority government, one needs 76 MPs. In the outgoing parliament, the ALP had 77 seats or effectively 76 members after nominating one ALP MP as the Speaker of the House.

When the elections were called on March 28, 2025, all the polls and every mainstream media outlet was expecting a very tight election outcome, ie, either Albanese will scrape through with a very slim majority or will be forced in forming a minority government and will have to rely on the support of the Greens to pass any legislation.

But Prime Minister Albanese, repeatedly over the years, has said that he would never to do a deal with the Greens.

A bit of history lesson here on the ALP. To form a minority government, Prime Minister Julia Gillard (3 December 2007 – 24 June 2010), signed an agreement with the Greens. She lost the confidence of her party mid-term and was replaced by Kevin Rudd. Albanese served as Rudd's Deputy.

Albanese was instrumental in shredding the agreement with the Greens. Albanese’s view at that time was that the deal with the Greens was toxic to the ALP. It remains his view to this day.

Table 1 below shows some of the major election wins since WWII in terms of two-party preferred votes received (in descending order).

Table 1: MAJOR WINS BY VARIOUS PRIME MINSTERS SINCE WORLD WAR II

Election Year	Prime Minster	Party	% Votes 2-party preferred
1966	Harold Holt	Coalition	56.9%
1975	Malcolm Fraser	Coalition	55.7%
2025	Anthony Albanese	ALP	55.3%
1977	Malcolm Fraser	Coalition	54.6%
1955	Robert Menzies	Coalition	54.2%
1946	Ben Chifley	ALP	54.1%
1996	John Howard	Coalition	53.6%
2013	Tony Abbott	Coalition	53.5%
1983	Bob Hawke	ALP	53.2%
1972	Gough Whitlam	ALP	52.7%

Source: House of Representatives Practice, Parliament of Australia, Appendices 10 and 11

The term Coalition in Table 1 above refers to the coalition of the Liberal Party (founded by Robert Menzies, Australia’s longest-serving prime minister to date) and the National Party (previously called Country Party). I have highlighted the major election wins of the ALP.

Table 2: LANDSLIDE WINS AS A % TOTAL SEATS IN THE HOUSE

Year	Prime Minister	Party	Seats won	No. of seats in the House	% of seats won
1975	Malcolm Fraser	Coalition	91	127	71.7
1977	Malcolm Fraser	Coalition	86	124	69.4
1966	Harold Holt	Coalition	82	124	66.1
1996	John Howard	Coalition	94	148	63.5
2025	Anthony Albanese	ALP	94	150	62.7
1958	Robert Menzies	Coalition	77	124	62.1
1983	Bob Hawke	ALP	75	125	60.0
2013	Tony Abbott	Coalition	90	150	60.0
1980	Malcolm Fraser	Coalition	74	125	59.2
1987	Bob Hawke	ALP	86	148	58.1

Source: House of Representatives Practice, Parliament of Australia, Appendices 10 and 11

Nothing that has already been written about Albanese’s victory is an exaggeration.

I will confine myself to making four points very briefly.

First, PM Albanese won a resounding victory on both counts: with regard to the percentage of votes received on a two-party preferred basis and the number of seats won in the Lower House.

For the last two years, the Opposition Leader, Mr Peter Dutton, has been hammering Albanese and the ALP for not being in touch with ordinary Australians and on cost-of living-issues.

Nevertheless, the Coalition opposed every measure that the Albanese Government put forward to ease inflationary and cost of living pressures, eg, electricity rebate for every household, increase in rental assistance, tax cuts, legislation to make supermarkets to price their products more competitively, free childcare for 3 days/week for all families, etc.

I leave it to the readers to decide who was out of touch with ordinary Australians and who misread the mood of the electorate.

Second, I want to point out something not mentioned by any commentator to the best of my knowledge: Fraser and Holt won a higher % of votes than Albanese in two party-preferred-terms. However, they won elections in a period when voters had a choice only between two parties: the ALP and the Coalition. There were no Greens, no community Independents, no One Nation Party, no Bob Katter Party, and no Climate 2000 TEAL Independents. Australia then was much more homogeneous both culturally and ethnically. Its economy was shielded from external upheavals by high tariff walls, a fixed dollar exchange rate and the Government of the day directly controlled interest rates.

Third, all Murdoch outlets, right-wing platforms and websites, and right-wing and radical left social media sites were spewing propaganda and skewed information - if not outright disinformation - against the ALP and Albanese.

Fourth, Albanese has won nearly the same percentage of 2-party preferred votes and more seats than Fraser in an environment where around 33% of the voters cast their first-preference votes to “Others”. This resulted in the election of 3 community Independents, one Green, Bob Katter of the eponymous party, and 6 (possibly 7) TEAL Independents.

LIBERAL DISASTER

In Australia, the ALP forms the government if it has a majority in the Lower House. On the contrary, the Liberal Party always collaborates with the National Party to form the government. In the last 50 years there have been at least two occasions at federal level when the Liberal Party had enough MPs to form the government yet it still chose to form a coalition government and offered some ministerial positions (including the post of the deputy prime minister) to the National Party (or its predecessor, the Country Party).

The National Party’s numbers did not change. They won all the seats that they held in the outgoing Lower House but will lose one senator. The Liberal Party, as would be obvious to readers by now, had a miserable election.

In this section, after briefly describing the main reasons for their loss, I wish to discuss what the Liberal Party must do to become a viable political force.

Table 3 shows the composition of the Coalition in the new parliament.

Table 3: Coalition MPs by Parties

Party Name	Members in new Parliament
Liberal Party	17
Liberal National Party of Queensland (LNP)	16
National Party	9
Country Liberal Party (Northern Territory)	0

Source: Australian Electoral Commission

Table 3 is self-explanatory.

Another history lesson here. After a decade of wilderness in opposition, the National Party and Liberal Party coalesced to form the LNP in 2008. When the LNP is in government in Queensland, all MLAs sit together on treasury benches. In Federal Parliament, whether in power or opposition, the LNP MPs from Brisbane (capital of QLD) and the Gold Coast sit with the Liberals, while those from rural QLD sit with the Nationals. In the Northern Territory, both parties have always been represented by the Country Liberal Party, and the CLP MPs/senators choose whether they want to sit with Liberals or Nationals.

Mainly, the Coalition suffered from four shortcomings:

1. Their policies/programmes did not resonate with voters;
2. They released their policies far too late in the campaign. For example, they released their defence policy on May 2, a day before the election. This was a big error considering that nearly half of the voters cast their votes well before the polling day;
3. The Liberal Party released the policy costings only in the last week of a 5 week campaign, and their costings were so awful that even conservative economic commentator, Professor Emerita and ex-member of the Reserve Bank of Australia’s Board, Judith Sloan, wrote a scathing article entitled, “Coalition costings: Is this a joke? Am I being pranked?”; and
4. Most of their cost cutting (necessary to fund their own programmes) came by cutting 41,000 public service jobs, increase taxes (ie, repeal tax cuts legislated by the ALP), abolish Labour’s A$10 billion House Affordability Fund (set up to take up to 40% of equity in a house purchased by a low income earner).

They tried to import two high-profile GOP policies. Both of them were unpopular with voters. In the first week of campaign, the Opposition Leader, Mr Peter Dutton, said he would force all public servants to come to the office 5 days a week. This policy was even unpopular with the Coalition parties’ staffers. Part-timers, single parent families, employees with elderly people to care for, etc. opposed this policy. Dutton was forced to withdraw the policy within a few days and apologize to Australians.

For more than two years, Dutton had been castigating the Albanese Government for not doing enough to alleviate cost-of-living pressures facing ordinary Australians. But during the election campaign his answer to the cost-of-living crisis was to reduce excise duty on petrol and diesel by half for 12 months. He said it would save an Australian household A$1200. People could see it was a gimmick not an economic programme.

The Opposition did not present any policy to show how they would bring inflation under control (inflation was more than 6% when the last Coalition government was defeated by Labour three years ago. Trimmed mean annual inflation was 2.9 per cent in April 2025. The electorate knew two things that: (a) inflation was an international problem; and (b) the ALP had done a reasonable job bringing inflation down without recessing the Australian economy. In fact, the Albanese government has created more than a million jobs since it came to power in early 2022.

Dutton’s policy of reducing the size of the public service by 41,000 (all from departments based in Canberra as the Nationals did not want any retrenchments in regional Australia which is their stronghold) earned him the epithet of DOGE-y Dutton (obvious reference to the Department of Government of Efficiency created by Trump and run by Elon Musk).

It was during the election campaign that Trump announced tariffs on Australian exports to the US. This also did not help Dutton either.

GREEN DEBACLE

The main stream media has concentrated on how much of a disaster the May 3 election was for the Liberal Party. But this election also witnessed the Green debacle.

The Greens suffered only a 0.5% swing against them and their nationwide primary vote remained the same as at the time of the last two elections, ie, around 12%. Consequently, they will have the same number of Senators as in the outgoing Parliament. But this fact hides equally severe wounds they have suffered.

This result must concern them most gravely because the May 3 election was the first where Generation Z and millennial voters outnumbered baby boomers. Younger voters are generally more progressive and environmentally more aware. Consequently, an increase in this cohort should have favoured the Greens.

Instead, they lost 3 of the 4 seats in the Lower House, including the one held by their leader, Dr. Adam Bandt. He has held that seat for the past 15 years. In his seat of Melbourne (the capital of the most progressive Australian State of Victoria), Bandt suffered a negative swing of 4.6%.

There were already signs that the Greens would not do well. Queensland state elections were held on 26 October 2024. Their performance was abysmal. Their support was marginally down on 10.0% polled in 2017, but about the same as in the 2020 State elections.

The outgoing Queensland Legislative Assembly (state lawmakers in Australia are called MLAs), had two Green MLAs. They lost the seat of South Brisbane to the Labour Party.

Despite launching the biggest door-knocking campaign of any state or territory, the Greens failed to pick up any of the four seats they had targeted: McConnel, Cooper, Greenslopes and Miller. Further, they went backwards in Maiwar (electorate adjacent to South Brisbane) where they suffered a swing of 7.7 per cent against them: 6.5% of Green voters returned to the ALP and the remainder voted for the conservatives.

Instead of realising they misread the electorate and taking a hard look at their policies and behaviour, they blamed other parties and the electorate.

I enumerate below some of the main reasons for their dismal performance in the Federal elections.

The Green’s leader, Adam Bendt, was a victim of his hubris. He forgot that only about 3 or 4 per cent of the electorate nationwide give their first preference vote because they really want to. The rest of the first preference votes they receive are protest votes. These protesters are mainly Labour Party voters who may be unhappy with the ALP for not moving fast enough on climate change or ignoring an issue very close to their hearts. These disaffected voters know that their vote via second preference will go back to one of the two main parties.

Adam Bandt wrote his Ph. D. thesis on Marxism. While China and Russia and their satellite countries abandoned the Marxist-Leninist model of government and economy many years ago, Bandt remains an unreconstructed Marxist.

The Greens know that unless their candidate gets more first preference votes than the ALP, he/she has no chance of being elected. Despite that, he obstructed Labour’s legislative agenda (especially the bills relating to the ALP’s social agenda) as much and for as long as he could. It was as if he intensely loathed the ALP and what it stood for. The Greens held up about 20 such bills.

As readers of the EUReporter know, on October 7, 2023, Hamas, an Islamist organisation that rules the Gaza Strip in Palestine and is classified as a terrorist organisation by the UN and almost all Western countries, carried out the deadliest attack on Jews since the Holocaust. It resulted in the killing of about 1200 Jews. Another 240 or so Israeli citizens were taken hostage.

Consequently, Israel waged a war on the Gaza Strip with two aims: (a) to root out Hamas; and (b) to retrieve the hostages.

This war, now more than 18 months old, has turned out to be an unspeakably horrific war.

Israel has yet to succeed in any of its stated aims. At the time of writing this article, the war has already resulted in the death of nearly 55,000 people: 53,253 Palestinians according to the official figures of the Gaza Health Ministry, and 1,706 Israelis as well as 166 journalists and media workers, 120 academics, and over 224 humanitarian aid workers.

The Greens took a pro-Palestine view and ignored the fact that Israel was forced to attack the Gaza Strip. The Greens knew there were many more Muslims in Australia than the Jews. So it made perfect sense to go to the elections with a blatantly pro-Palestinian policy.

The Liberals took a pro-Israeli stance and the ruling Labour Party had an even-handed approach: it strongly condemned the October 7, 2025 on innocent Israelis, called for the release of all hostages and Hamas perpetrators to be brought to justice, but it also criticised Israel for excessive civilian casualties and not letting food and medical aid through to Gazans, and provided very modest funds to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA).

The Green pursued their pro-Palestinian policy aggressively. For example, the Green volunteers blockaded the Prime Minister’s electoral office, preventing staff from attending to the needs of the constituents. This was not all. The Green activists carried out a doorknocking campaign in his electorate and asked the electors about their views on the Israel-Gaza war. The voters found the experience confronting and insufferable.

These acts yielded them a lot of media coverage. A large swathe of Australian Muslim may have voted for the Greens because of their stance on the Israel-Gaza War, but it cost them more votes than they gained.

They were perceived as anti-Semites and bringing the Israel-Gaza War to Australia, thus creating disharmony and division. Nationwide, they suffered a swing of 0.5 per cent.

In the last Parliament, the ALP Government did not have the majority in the Upper House. So it needed the support of the Greens or the cross-bench Senators to pass its legislation. Accusing the Government of not being ambitious enough, the Greens held up legislation which would enable the building of more public housing and emergency accommodation for women and children escaping domestic violence, and even some legislation regarding environmental protections for as long as they could. In some cases, for more than a year.

The Greens, just like all other parties, have known for a long time that housing affordability is one of the top concerns for Australians. Further, there is not enough housing stock available for renters, especially for those on low income or welfare recipients (eg, unemployed people, single parents, women in abusive relationships, etc.). To hurt the ALP, the Greens opposed bills meant to ameliorate this situation for more than a year.

Bandt was not only expected to hold his seat, but also win the adjacent seat of Wills (it has a big migrant population, largely from the Middle East, Turkey and Pakistan).

The sole purpose of the Greens in hurting the ALP was to ensure that Albanese would not be able to form a majority government. Consequently, the ALP will be at the mercy of the Greens to pass any bill either in the Lower House or the Senate. This strategy badly backfired on them.

Conceding defeat, Adam Badt - instead of blaming himself and the policies he took to the election - said that many Greens voters had "leaked" to Labour. "People saw Labour as the best option to stop Dutton ... it did make a difference, he said. He also blamed the redistribution of the Melbourne electorate, which worked against him.

The electoral boundaries are determine by the Australian Electoral Commission. Re-mapping of existing electorates takes place before every election in Australia. It is a function of how the Australian population has shifted from one suburb or city to another. The suburbs that his district of Melbourne lost became part of Wills, which the Greens hoped to snatch from the ALP. But, as I mentioned before, the Greens lost Wills too.

The Australian Broadcasting Commission conducted an online survey as well its journalists interviewed many Green voters to find out why the progressive stronghold city of Melbourne did not vote for the Greens in this election.

ABC found that some Melbourne voters found the Greens campaign divisive, too idealistic.

Throughout the election period, ABC ran an online “Your Say project”. Since election night, hundreds of Victorian voters had written why they voted for a certain party. More than 50 voters told the ABC why they did — or didn't — vote for the Greens.

Some said that they did not vote for the Greens this time because they did not like the outsized focus on the Israel-Gaza war.

Some did not like the Greens' tendency to prioritise the "idealistic" over the practical, while a number said they were concerned about Mr Bandt's leadership.

One voter, a childcare worker, wrote that while the Greens campaign was highly visible, she knew many of her neighbours did not support Mr Bandt. "A lot of them were not in favour of the Greens policies … [because] are they actually feasible? What's the price to pay for all of that?”

Some mentioned that the environment was not at the forefront of the Greens’ campaign.

In summary, under Bandt the Greens had turned into a party that like a proverbial snake, was biting the hand that fed it. Instead of remaining an environmental party like the Greens in Germany, it pursued a manifesto of grievances offering impractical solutions to hurt the ALP to the maximum.

For example, Bandt complained about the lack of rental housing stock in the country. But his solution was to put a cap on rent, make it extremely difficult for landlords to ask tenants to vacate the properties, and heavily tax any income they may derive from capital gains. Everybody figured out such a policy would result in the drying up of construction of rental housing.

Now an intense hostility toward the Greens exists in ALP circles. It is not improbable that over the next few elections (certainly as long as Albanese remains the Prime Minister), the ALP and the Liberals will divert their preferences in a way that minimises the Green’s electoral success. It is in the interests of both major parties to strive to make the Greens politically irrelevant. For this to become a certainty the Liberals will need to move towards the centre. If they do not, the Liberals will themselves become politically irrelevant.

About the Greens I will make one prediction: they have peaked. Not only federally or in Queensland state elections, the party did not do well in the Northern Territory election, the Brisbane City Council and even in the ACT. In the Senate, in the counting so far, the Greens vote has gone backwards everywhere except in South Australia and Tasmania (the State where the party was born).

Bandt pursued policies that represent the views of his party’s current membership, which is far more radical than those of middle Australia and more to the left of the Labour Left. Many of their members are ex-members of the banned Communist Party of Australia, Socialist Party of Australia or anarchists. This is especially so in the NSW.

It is not the party of Norm Sanders, Bob Brown, Christine Mills anymore. Or even of Richard Di Natale. Politically, the environmental movements in Australia is now represented by the TEALs and the Labour.

WHERE TO FOR LIBERALS NOW

It is self-evident that the Liberal Party or rather I should say the dominant faction of the Liberal Party) is out of touch with the values and concerns of most Australians.

All TEAL independents and Community Independents represent seats that were considered safe Liberal seats until 4-5 years ago. Teal is a bluish red colour: Blue representing the Liberals and Red for the Labour. People living in these electorates are highly educated, wealthy professionals and businessmen. The Liberals lost to the TEALs in the last two elections because they do not have a credible carbon emission reduction policy. Many of the Liberals and all the Nationals think climate change is a hoax.

The last two Liberal prime ministers, Messrs.Tony Abbott and Scott Morrison, used to say so openly, but the Coalition members have become smart now. They now publicly say that we believe in climate change, but put out policies that will result in the transmission of more greenhouse gases. For example, during the election campaign, they said they would stop the construction of wind farms, solar energy projects and build 7 nuclear power stations. If a power shortage occurred before the nuclear power plants became operational, they would use natural gas to generate additional power and provide subsidies to coal power station operators to prolong their lifespans.

They have also largely alienated female members of the electorate. They have known about this problem for more than a decade yet not taken any remedial action.

In the new parliament, the Labour will have at least 47 or 48 (out of 94) female MPs, the Liberals 4, Nationals 3. All TEAL and Community independents, bar one, are females.

During the late 1980s and early 1990s, there was an intense power struggle for the leadership of the Liberal Party between the late Andrew Peacock (a small ‘l’ liberal) and socially conservative John Howard. To deny pre-selection to moderates, Howard encouraged Christian fundamentalists and other conservative movement activists to join the Liberal Party. John Howard won the battle and was prime minister for 11 years until he lost his seat in 2007. He also tried to introduce religion into Australian politics by recommending to the Queen that Anglican Archbishop Peter Hollingworth be appointed as the Governor-General. The latter had to resign mid-term in disgrace when it was found that he had protected or not taken any meaningful action against paedophile priests.

All these conservatives in ths Liberal Party and their supporters outside have been waging cultural wars in Australia for the last three decades (when Howard first became PM). This has started to backfire on the Liberals.

In summary, not many moderate small ‘l’ liberals are left in the Liberal Party.

The Liberal Party needs to actively recruit small ‘l’ Liberals, people who are socially progressive but economically conservative or pragmatists (not extremists) and try to cleanse itself of climate change deniers, christian fundamentalists, etc. and offer women pre-selection in safe seats.

It may also help them if they were NOT in coalition while in opposition so that the Nationals do not have a veto on their policies.

It would also help if the Liberals cooperated with Labour on at least some (if not all) of its environmental initiatives. This will help to establish their environmental credentials and win some seats back from the TEALs. By doing so, they may jointly with the ALP render the Greens politically irrelevant.

In summary, the Liberals need a cultural rejuvenation to align themselves with modern Australia. Until they take the steps outlined above, they will keep withering or will ONLY come into power when the electorate becomes tired of Labour.

CHALLENGES FACING ALBANESE

​There have been two Labour administrations that have changed the face of Australia, both socially and economically.

First was the Whitlam Administration. Before Gough Whitlam became prime minister, the Coalition parties had ruled Australia for 28 years continuously (from early 1945 to December 1972). During his three years, Gough Whitlam changed the social face of Australia. I mention some of these changes below:

He introduced universal Medicare, no fault divorce to allow women to shake off unhappy and abusive marriages, did away with conscription or compulsory military service, abolished the British honours system and replaced it with an Australian one, made tertiary and university education free, under him spending on state government schools increased more than six fold, introduced "self-determination" and land rights for Indigenous Australians, elevated the arts into the national discussion, made strides in women's rights, including implementing equal pay for equal work, providing maternity leave, and removing the tax on contraceptives, and also established diplomatic relations with People’s Republic of China.

The second was Prime Minister Bob Hawke (1983–1991). His administration is more commonly known as the Hawke-Keating Government because of the prominent role Treasurer Keating played in reforming the Australian economy. Later, Paul Keating also served as Prime Minister for five years from 1991–1996.

Just as Whitlam changed the social face of Australia during his three years, Keating transformed the nature of the Australian economy forever. He is recognised as the best Treasurer Australia has ever produced by both sides of politics.

Keating pursued his politics tenaciously and was a visionary thinker (left school at 15). He floated the dollar, reformed the financial sector, removed direct controls on interest rates, reduced tariffs, encouraged more international trade and engagement in the Asia-Pacific region, and was instrumental in creating APEC (Asia-Pacific Economic Cooperation), an intergovernmental forum of 21 member economies in the Pacific Rim.

His most far-reaching achievement was the introduction of the compulsory National Superannuation Scheme as part of the Social Wage Accord that the Labour Government signed with the ACTU (an umbrella organisation representing all unions in Australia). The implementation of the National Superannuation Scheme addressed Australia's long-term problem of chronically low national savings. Now by law, an employer must deposit an equivalent to 11.5% of an employee’s annual salary/wages in his/her super account irrespective of whether the person is a casual employee or a permanent one. Every employer must do so every quarter. The Superannuation savings now amount to three-trillion dollars.

On the social front, he passed the Mabo legislation, established the Council for Aboriginal Reconciliation and facilitated the return of land to Indigenous Australians. He implemented many reforms to the social security system, reducing social security spending and investing it in job support initiatives. The Keating government also passed the Industrial Relations Reform Act 1993, which established minimum entitlements in the workplace.

Keating’s other achievements included establishing the National Training Authority, and the introduction of the Disability Discrimination Act 1992.

Australia has enjoyed nearly 30 years of economic growth without a recession because of Keating’s economic reforms.

During the Hawke-Keating years, despite introducing all these social reforms, the government spending fell from 27.6 per cent of GDP in 1984-85 to 22.9 per cent of GDP in 1989-90. In 2024, the government spending was 26.5% GDP.

Jim Chalmers, Albanese’s Treasurer, may have written his Ph. D. thesis on Keating, but he is no Keating.

Albanese needs to first contain and then reduce the government spending by targetting welfare expenditure, eg, universal energy rebates, three days free child care irrespective of the parent’s income. The expenditure on the National Disability Scheme is projected to grow by 9% annually. In contrast, the economy is struggling to grow beyond 2.5%. This kind of growth in a social welfare programme is not sustainable.

Productivity has been falling for many years. Though Australia is one of 11 countries that enjoy an AAA credit rating from all three credit agencies yet its debt is too high. No Australian government can rely on higher commodity prices to balance the budget all the time. The causes of structural deficit need to be tackled urgently.

Internationally, Australia faces an increasingly hostile environment. It must spend dozens of billions more on defence annually (not a vote winner). The US is now beginning to realise it has overstretched itself. Consequently, it would be a mistake for Australia to solely rely on the US and not be better prepared for a future war.

The above are some of the challenges Prime Minister Albanese faces. He must address each of them in a meaningful way along with supply side logistics issues that have arisen since the COVID-19 epidemic.

Only future will tells what would be Albanese’s legacy? Would he be remembered as a Prime Minister interested in only power and who squandered the opportunity that the nation offered him. Or would he make Australia a stronger and more confident and egalitarian nation that Whitlam, Hawke and Keating tried to do.

* Vidya S. Sharma advises clients on country and geopolitical risks and technology-based joint ventures. He has contributed many articles for such prestigious newspapers as: EU Reporter, The Canberra Times, The Sydney Morning Herald, The Age (Melbourne), The Australian Financial Review, East Asia Forum, The Economic Times (India), The Business Standard (India), The Business Line (Chennai, India), The Hindustan Times (India), The Financial Express (India), The Daily Caller (US). He can be contacted at: [email protected].

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