(Bloomberg) -- Australian Prime Minister Anthony Albanese faces the prospect of having to govern with the support of minority parties after the next election, based on new opinion polls showing his ruling Labor party is neck-and-neck with the center-right opposition.
The government is tied with the Liberal-National Coalition at 50% apiece on a two-party-preferred basis, according to a Newspoll published in the Australian newspaper on Sunday evening. A separate poll by Resolve showed Labor trailing the opposition 49% to 51%, with its primary vote falling to its lowest point yet.
The Labor government must hold an election by May 17.
Albanese has a three-seat majority in the 151-member lower house of parliament, meaning the loss of just a few Labor lawmakers would force him to turn to minor parties such as the left-wing Greens and centrist independents to secure power. As the electorate becomes increasingly fragmented and party loyalty dissipates, the outcome of the 2025 ballot is becoming harder to predict.
While Albanese still has six months to hold the vote, a sluggish economy, high interest rates and a deteriorating fiscal outlook have many lawmakers expecting him to go sooner rather than later to avoid more bad news.
Labor had been hoping to see at least one rate cut before the 2025 election to provide some financial relief to voters — and as a signal that the era of cost-of-living pressures is coming to an end. But the Reserve Bank has said it sees little prospect of an easing in the near-term, with Governor Michele Bullock expected to keep rates at a 13-year high of 4.35% at Tuesday’s meeting.
Money markets suggest a first cut in April, though the bank has traditionally preferred to move at the meeting after the release of quarterly inflation and when it publishes updated forecasts, which occurs in February and May.
Labor has sought to cushion the pressure of high prices with tax cuts and energy rebates to help financially squeezed households. Yet the Resolve poll released Sunday suggested this has had little impact.
When respondents were asked whether they believed the Labor government “had their back,” 56% of those surveyed said no.
--With assistance from Garfield Reynolds.
©2024 Bloomberg L.P.
