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Election Losses Rattle an Already Skittish Australian Government

29 Jul 2018 7:35 am
By David Winning 

SYDNEY--Defeats in a clutch of weekend ballots risk aggravating internal party divisions over Australian Prime Minister Malcolm Turnbull's leadership, forcing him to review his center-right bloc's election strategy.

Mr. Turnbull is seeking to become the first Australian leader in more than a decade to navigate a three-year term of government without being unseated by party rivals.

Special elections Saturday, held across four states from northeastern Queensland to Western Australia, were seen as a key test of his popularity and the Liberal-National coalition government's record.

The results didn't go the government's way, sapping speculation that Mr. Turnbull could build enough momentum from a recent narrowing in national opinion polls to call a national election before next year.

On Saturday, the opposition Labor party won four seats that were largely thrown open by a court ruling confirming a constitutional rule barring dual citizens from office. Another seat was won by the small Centre Alliance.

"We will look very seriously and thoughtfully and humbly at the way in which the voters have responded," said Mr. Turnbull, a former Goldman Sachs banker and millionaire tech investor, when asked if his policies needed to change.

Victorious candidates in all five of the so-called by-elections were either incumbent lawmakers seeking re-election after renouncing their dual citizenship or were from the party that won the seat in the 2016 election. Mr. Turnbull's Liberals only contested three of the five seats, bypassing votes in two Western Australia constituencies.

To be sure, governments rarely wrest seats from rival parties midterm. A win in one of these by-elections would have been the first in almost a century by a ruling government in Australia. Also, Mr. Turnbull's one-seat majority in the lower house of parliament--where governments are formed--wasn't in doubt because the Liberals wasn't the incumbent party in any of the contested seats, which could have damped turnout by his supporters.

Mr. Turnbull had hoped Australia's 27-year unbroken streak without a recession and his government's achievements, including tax cuts, would resonate with voters. A recent Fairfax-Ipsos poll showed Mr. Turnbull's conservatives had climbed two points to 49%-51% against Labor nationally, while the Prime Minister's own popularity was at a two-year high against Labor leader Bill Shorten.

However, Australia's mainstream political parties have also seen support leak toward populist and right-leaning parties in recent years, mirroring trends from Europe to the U.S. Voter disquiet has been stoked by stagnant wage growth, inflationary pressures, job losses and a backlash against globalization. A lengthy house-price boom has fueled concerns about affordability, while household debt relative to income is among the highest in the world.

Concern about an escalation in global trade tensions is also simmering. Australia's economy is vulnerable to a shock from the U.S. and China ratcheting up trade tariffs because Beijing is the chief buyer of its biggest exports, including iron ore and coal. Diplomatic ties between Australia and Beijing have recently been strained by Canberra's counterespionage laws.

Geoffrey Robinson, a political analyst at Deakin University School of Humanities and Social Sciences, said Mr. Turnbull's national challenge was illustrated in the Longman electorate in Queensland, which he characterized as a white, working-class seat where voters have a high degree of economic insecurity. Labor held Longman in Saturday's vote, with the Prime Minister's pitch failing to "cut through those anxieties" in a marginal seat that the Liberals likely will need to win in a national vote, he said.

"Labor under Mr. Shorten's leadership were capable of out-campaigning the government in 2016 and again in these by-elections. That's going to be a source of concern for the government" and makes an early election unlikely, he said.

Rob Taylor in Canberra contributed to this article.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

July 29, 2018 03:35 ET (07:35 GMT)

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