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Australia Demonstrates the Rise of Populism Is About More Than Economics

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Australia Demonstrates the Rise of Populism Is About More Than Economics The Australian Economic Review, vol. 51, no. 3, pp. 399–410 DOI: 10.1111/1467-8462.12294 Policy Forum: Economics and Populism Australia Demonstrates the Rise of Populism is About More than Economics Danielle Wood, John Daley and Carmela Chivers* Abstract 1. The Rising Minor Party Vote in Australia Votes for established centre-right and centre- left political parties are falling across the The 2016 federal election crystallised a trend in developed world. Australia is not immune from Australian electoral results. In both the Senate this trend: in the 2016 federal election, more and the House of Representatives the vote for people voted for minor parties than at any point minor parties reached the highest level since since the Second World War. Australia is an the Second World War (Figure 1). interesting case study for the rest of the world The minor party vote vacillates according to on the origins of populist support. Political the politics and personalities of the day. scientists have struggled to separate the effects Previous peaks in the minor party Senate of cultural shifts and poor economic outcomes vote coincided with peaks in support for high- (low wages and rising inequality) in many profile minor parties: the Democratic Labour countries because these shifts have occurred Party (11.6 per cent) in 1970, the Australian simultaneously. However, in Australia the Democrats (12.6 per cent) in 1990 and One economy was relatively healthy during the Nation (9.0 per cent) in 1998. The Greens are period of rising minor party support. Our an important component of the minor party analysis suggests that falling trust in govern- vote but their vote share has not meaningfully ment and a backlash against the pace of social shifted since 2004. change explain much of the collapse in support But beyond the ‘noise’ of individual for the political mainstream. elections, there has been a clear increase in the tendency of Australians to vote for minor parties since 1949. The Senate vote for minor parties has exceeded 25 per cent in the past three elections, a level not reached in the previous 40 years. And this time it is not all just about one ‘bright star’ party capturing the public imagi- nation. Rather, the minor party vote is allocated across a disparate group of parties often with * Grattan Institute, Victoria 3053 Australia. Corresponding strong state-specific support, such as One author: Wood, email <[email protected]>. Nation (Queensland), Derryn Hinch (Victoria), Grattan Institute began with contributions to its endow- ment of $15 million from each of the Federal and Victorian Nick Xenophon (South Australia) and Jacqui Governments, $4 million from BHP Billiton, and $1 Lambie (Tasmania). million from NAB. In order to safeguard its independence, These trends mimic voting shifts internation- Grattan Institute’s board controls this endowment. The ally. Across the developed world, the vote for funds are invested and contribute to funding Grattan traditional centre-left and centre-right parties has Institute’s activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its fallen since about 2000 by 10 percentage points general activities as disclosed on its website. or more in most developed countries °C 2018 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Published by John Wiley & Sons Australia, Ltd 400 The Australian Economic Review September 2018 Figure 1 The Minor Party Vote Has Been Growing Over Timea Source: Australian Electoral Commission data provided by Antony Green. Note: (a) For the purposes of this historical analysis we treat the Greens as a minor party. (Barth 2016). The rise of populist movements response to an erosion in status of a previously across Europe and Latin America, Donald dominant group.2 Trump’s election as US President, and the Brexit Distinguishing these effects has proved vote have created global interest in what is challenging in countries where both eco- causing disillusionment with the ‘mainstream’. nomic upheaval and significant social change are backdrops to the rise in populist 2. Causes of Populist Sentiment: Theory sentiment. and Evidence Using data from across Europe for the 13 years to 2014, Inglehart and Norris (2016) Political science literature tends to focus on find that the experience of unemployment is either economic or cultural insecurity as the linked with populist voting. However, they also cause of populist sentiment in Western democ- find populist support is higher among small racies. The economic insecurity hypothesis business owners and tradespeople than low- posits that the ‘losers’ from globalisation wage unskilled workers. And populist parties protest about the erosion of their job security received significantly less support from people and the falls in their relative incomes by voting dependent on social welfare benefits. Inglehart for someone outside the political mainstream and Norris conclude that cultural attitudes are a (Esses Jackson and Armstrong 1998; Riek, much stronger predictor of populist support. Mania and Gaertner 2006). Cultural explan- Grechyna (2016) uses data from 66 ations are more diverse but tend to consider countries to examine the economic, socio- rising populist sentiment as either rooted in historic and geographic contributions to opposition to progressive social change1 or a political polarisation. She finds that the level °C 2018 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Wood, Daley and Chivers: Australia Demonstrates the Rise of Populism 401 of trust and degree of income inequality are We also investigate another possible explana- the most important determinants of political tion—falling trust in government—which polarisation. has coincided with the popularity of minor Funke, Schularick and Trebesch (2016) parties. analyse voting patterns over 140 years and In assessing which of these factors might across 20 developed countries. They find that count as a good explanation for the rise in political polarisation increases strongly after minor party vote we use several criteria. financial crises. Far-right parties on average increase their vote share by 30 per cent after a Does the explanation correlate with the rise financial crisis, as hostile attitudes to migra- in the minor party vote over time? tion and trade resonate with the electorate. However, the authors find no significant Does it align with the views of the voters for effect on polarisation from normal recessions the minor parties? or economic downturns driven by other factors. Is it an issue reflected in the policy platforms Some studies have called into question the of the minor parties? narrative of Donald Trump’s presidential victory on the back of the white, working We consider a good explanation for the rise class vote. Carnes and Lupu (2017) use data in the minor party vote would satisfy all of from the American National Election Studies these criteria, that is, it would align with the to show that only 35 per cent of Trump voters increase in the minor party vote since 2007 have household incomes below US$50,000 per (including the big jump in 2013), be a year—the national median. But others have prominent issue in many minor party plat- highlighted that the biggest increase in vote for forms, and would be a more significant issue the Republican candidate came from those with for minor party voters than for others. low incomes. Of those with incomes less than US$30,000, 16 per cent more voted for Trump 4. The Minor Party Vote and Economic in 2016 than Mitt Romney in 2013 Liddy Insecurity (2016). Studies of the Brexit vote point to a similarly Growing economic insecurity is a common complicated relationship between economic explanation for the rise in the populist vote circumstances and voting to leave the Euro- across Western nations. Low wage growth, job pean Union. Becker, Fetzer and Novy (2017) insecurity and rising inequality have all been find the Leave vote was higher in UK regions fingered as culprits for growing political with lower education levels, higher disaffection in Australia. But studies have manufacturing employment, low incomes and failed to find any relationship between the vote- higher unemployment. But Kaufman (2016) share of the incumbent and the health of the finds that negative views on immigration and Australian economy. Indeed, Hellwig and favourable views on the death penalty had McAllister (2016) document the ‘paradox’ of greater explanatory power than income and the low levels of economic voting in Australia class in predicting voting intention in the Brexit compared to similar democracies. referendum. 4.1 The Rise in the Minor Party Vote Does 3. A Framework for Considering the Not Correlate Well with Most Indicators Minor Party Vote in Australia of Economic Insecurity This article explores the extent to which the Many economic indicators—particularly rise in the vote for minor parties in Australia wages growth and inequality—do not align over the past 15 years (post 2004) might be a well with the changes in minor party fortunes response to economic or cultural insecurity. over the past two decades (Figure 2). °C 2018 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research 402 The Australian Economic Review September 2018 Figure 2 The Minor Party Vote Share Jumped At The End of a 3‐Year Rise In Incomes Source: ABS (2018a, 2018c), Australian Electoral Commission (2004–2016). Note: Minor party vote is defined here and for the rest of this article to exclude the Greens. The Greens have maintained a strong national presence in the analysis period (they have received at least 7 per cent of the first preference Senate vote across Australia in each election since 2004) but do not seem to be tapping into the broader discontent we document. Indeed, their first‐preference Senate vote was only slightly higher in the 2016 election than in 2004.
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