Turnbull Calls Australia Election for July 2 in Tax Showdown

Australia Election Confirmed for July 2
  • Economic management, tax cuts to dominate eight-week campaign
  • Governing Coalition and Labor are tied in opinion polls

Prime Minister Malcolm Turnbull called Australia’s election for July 2, triggering an eight-week campaign set to be dominated by a battle over tax cuts and which party can best steer the economy as the mining-investment boom ends.

“Our economic plan for jobs and growth is as clear as it is critical,” said Turnbull, 61, after asking Governor-General Peter Cosgrove to dissolve both houses of parliament. “These are exciting times, but we must embark on these times, embrace these opportunities with a plan.”

Malcolm Turnbull
Malcolm Turnbull
Photographer: Mark Graham/Bloomberg

With polls showing his Liberal-National coalition faces a tight race to win a second term in office, Turnbull is under pressure to maintain party discipline during the lengthy campaign and convince voters he’s best-placed to manage the world’s 12th-largest economy. A win for the former investment banker would put a capstone on an era of political turbulence that’s seen Australia churn through six prime ministers in eight years.

Turnbull is promising to cut tax rates for companies and high-income earners and boost infrastructure spending as he seeks new drivers of growth. Standing in his way is union-backed Labor party leader Bill Shorten, 48, who’s portraying the coalition as out of touch with average workers.

Return to Stability

“There’s a lot at stake with this election, as it may finally lead to real stability returning to Australia’s political system,” said Zareh Ghazarian, lecturer of politics at Monash University’s School of Social Sciences. “It’s the government’s to lose, but Turnbull needs to remember he has to stay extremely disciplined and avoid major mistakes during a two-month campaign.”

Shorten, a former trade union leader, says he would end tax perks for property investors that have contributed to house prices in Sydney and Melbourne soaring out of reach for poorer Australians. He’s also promising a royal commission into the finance industry after trust in the sector was eroded by poor financial advice offered by banks.

‘Economic Plan’

“At this election, Australians will have a very clear choice,” Turnbull said in a televised news conference in Canberra. “To keep the course, maintain the commitment to our national economic plan for growth and jobs, or go back to Labor with its higher taxing, higher spending debt and deficit agenda, which will stop our nation’s transition to the new economy dead in its tracks.”

While Labor and the coalition are tied on 50 percent in a Galaxy poll published Sunday, the opposition party has a mountain to climb to win the election. The coalition has 90 seats in the 150-member lower house, to Labor’s 55 and betting odds show the government is the clear favorite. A winning A$1 bet on the coalition would return A$1.33, while the opposition would give A$3.25, according to bookmaker Sportsbet.

“I will fight this election to help create a vibrant economy, growing jobs with reasonable conditions and security for all,” Shorten told reporters in Tasmania on Sunday. “I will fight this election to make Australia a fairer place.”

This is the first so-called double dissolution ballot since 1987, meaning all 76 seats in the Senate will also be up for grabs. In a normal election, only half of the upper-house seats from each state are contested.

Industrial Relations

Turnbull claimed a constitutional trigger to call the election when the Senate twice blocked legislation to revive a watchdog for the building industry -- which the coalition says is plagued by militant unions. Industrial relations will be another major issue in the campaign, with the coalition saying Labor is beholden to its union backers and Shorten arguing the government is against workers’ rights.

Both Shorten and Turnbull are fighting their first election campaigns as party leaders and will be seeking to cement their authority.

Labor’s last stint in office, from 2007 to 2013, was tumultuous as the leadership switched from Kevin Rudd to his deputy Julia Gillard and back again. Shorten was seen as a kingmaker amid the chaos, flipping his allegiance between the two before becoming party leader after Labor lost the 2013 election.

The coalition has been gripped by similar infighting that saw Turnbull oust Tony Abbott in a party ballot in September amid plunging poll ratings. Turnbull will need a decisive election victory to shore up his authority over Abbott loyalists and give him an opportunity to pursue his own more socially progressive agenda. Unlike Abbott, he supports gay marriage, previously advocated carbon pricing to tackle climate change and is an ardent republican.

“Turnbull is really banking that voters will trust his coalition’s historic ability to manage the economy,” said Haydon Manning, a politics professor at Flinders University in Adelaide. “The length of the campaign, along with the fact both leaders are untried at leading election bids, means there will be plenty of thrills and spills in the next couple of months.”

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