WA Liberal Party goes from boom to bust

The Western Australian Liberal Party has suffered its worst electoral defeat in decades. A 16 percent swing against the Liberals resulted in at least four ministers losing their seats. With two-thirds of the vote counted, Labor is set to win around 40 seats in the 59-seat parliament, doubling the number of seats it held previously. The Liberal Party has so far won 11 seats, while the Nationals have secured five.

The outcome was a disaster not only for state premier Colin Barnett, but also for far right racist Pauline Hanson. Her insurgent One Nation Party, which had polled 13 percent six weeks out from the state election, secured just 4.6 percent of the primary vote.

However, One Nation candidates Colin Tincknell (South West region) and Robin Scott (Mining and Pastoral region) will join three other right wing candidates from the Liberal Democrats and Shooters, Fishers and Farmers in the Legislative Council. With WA electoral laws favouring rural voters in the contest for upper house seats, this block of five candidates will command the balance of power, enabling them to block government legislation.

Boom to bust

Western Australia was the centre of the largest resources boom in Australian history. Yet the state is now drowning in debt. Since 2008, when Barnett took office, public debt has risen from $4.96 billion to $36.6 billion, according to ABC News. The government has forecast that it will pay $1.5 billion in interest this year alone.

Only a few years ago, Perth airport was crowded each morning with fly-in fly-out workers boarding flights to regional centres, hotels were fully booked, the property market was booming and jobs were plentiful. But West Australians have now fallen on hard times. While commodity exports and corporate profits continue to grow, the construction phase of the boom is over. Since 2013, the state’s mining industry has shed the equivalent of 22,000 full time jobs, according to Curtin University’s Bankwest Economics Centre.

Property prices have fallen in Perth and collapsed in mining towns. In the Pilbara and Goldfields, “for sale” signs are a common sight along street verges. Workers who bought houses in the boom times are now mired in debt and face significant financial stress. Unemployment, at 6.6 percent, is the highest it’s been in 15 years. Fair Work’s planned cuts to penalty rates, which will hit low paid retail and hospitality workers hard, was the last straw for many families trying to make ends meet.

Barnett’s solution to the state’s woes was to sell 51 percent of the state’s electricity corporation, Western Power. Under the Liberals’ plan, $11 billion in revenue from the sale would pay down $8 billion in debt and provide $3 billion for infrastructure investment. But voters were not buying it. They knew electricity privatisation means higher prices. Blackouts in South Australia and bushfires in Victoria were reminders of what happens when private electricity operators sacrifice maintenance of power lines and generators at the altar of corporate profits.

Nationals and One Nation

Fearing electoral annihilation, Nationals leader and deputy premier Brendon Grylls proposed an increase to mining royalties from 25 cents per tonne for BHP Billiton and Rio Tinto (a pittance that remains unchanged since the early 1960s) to $5 a tonne. The increase, Grylls argued, would raise $7.2 billion over four years. If iron ore prices remained within the WA Treasury’s estimates, BHP and Rio Tinto would make profits of about $100 billion over that time. Such a tax would be a small price to pay to maintain the government’s cash-starved “Royalties for Regions” program.

However, both premier Barnett and Labor opposition leader Mark McGowan promptly rejected Grylls proposal. Reminiscent of the mining bosses’ campaign that unseated prime minister Kevin Rudd in 2010, the Chamber of Minerals and Energy poured millions of dollars into a campaign against the tax, claiming it would cost 3,000 jobs in the Pilbara alone.

Perceiving the Nationals to be an electoral liability, and anticipating a surge in One Nation votes, the Liberals struck a deal to preference One Nation candidates ahead of their own coalition partner. On 14 February, Barnett told reporters that One Nation was “not the [same party] of the late 90s”, a view echoed by Liberal federal senator Arthur Sinodinos and former PM Tony Abbott.

However, despite (or perhaps because of) Barnett and Hanson’s assertion that the deal was simply a pragmatic move to help sure up votes for both parties, a revolt emerged among One Nation candidates and Liberal backbenchers. Responding to criticism of the deal from party candidates, Hanson told the ABC’s 7.30 Report: “I will run this party, meaning right from the top … who stands, policies, preferences”.

During the campaign, five of One Nation’s 50 candidates were either dumped or quit. Having failed to distinguish itself from the Liberals, the party’s vote plummeted. In regional areas, the Nationals’ vote held up.

However, it would be premature to conclude that the One Nation steam train has run out of coal. On election night, Hanson conceded that the deal with the Liberals had harmed the party. While One Nation now has a track record of helping the Turnbull government push its austerity measures and anti-worker legislation through the Senate, the party will work hard to recoat its anti-establishment veneer in Queensland in the lead-up to the next state election.

The ALP

Labor’s pledge to abandon the construction of Barnett’s controversial Perth Freight Link and to begin rehabilitation of the Beeliar Wetlands will be welcome news to residents of Perth’s southern suburbs. Additionally, Labor’s proposed Metronet, which will significantly expand Perth’s rail network, promises some relief to the congestion on the city’s roads.

However, the party’s opposition to an increased levy of mining royalties demonstrates that its priority will not be working families, but shoring up the profitability of the state’s giant resource sector. Without a significant boost in state income, savings will come from cutting public services and workers’ wages.

Calls from the Australian Nursing Federation for Labor to reduce nurse-patient ratios to 1 to 4 went unheeded. Labor refused to commit to reinstating more than 10,000 jobs cut from the state public sector under Barnett. Nor will it eliminate the 1.5 per cent annual wage rise cap imposed on state public sector workers. Labor was given a blank cheque by the state’s largest union, the CPSU-CSA, which made no demands on an incoming Labor government in exchange for the union’s electoral support.

Labor also pushed a law and order agenda throughout the campaign, pledging to jail meth dealers for life. In language not unlike Philippine president Rodrigo Duterte, shadow attorney-general John Quigley declared, “We’ve got to cut the head off the snake. We’ve got to really increase the penalties for traffickers”.

The Greens rejected this “get tough on crime” approach to drug use, arguing that prison sentences were not a solution. “We need to treat people who have a health problem through the health system, and not treat them like criminals”, Greens leader Richard Di Natale told reporters in Perth on 21 February.

Western Australia’s imprisonment rate is 50 percent higher than the national average; 39 percent of prisoners are Aboriginal, although only 3.6 percent of the population is Indigenous.

During the boom years, Western Australia gained a reputation as the nation’s wealthiest state. The state’s resource and agricultural exports account for 40 percent of Australia’s export revenue. The Pilbara region alone accounts for nearly half of global iron ore exports.

Despite the super profits the mining companies have made off workers’ backs, unemployed and low income workers face a tough future. We should have no illusions that a McGowan Labor government will make our lives easier. Rather, we need to ready ourselves for the battles ahead.