Australia's Morrison Leads Conservatives to Shock Election Win

Jason Scott and Michael Heath
Australia's Morrison Leads Conservatives to Shock Election Win

(Bloomberg) -- Prime Minister Scott Morrison led his conservative government to a surprise victory in Australia’s election, seeing off a challenge from the left-leaning Labor opposition with his pledge to safeguard the slowing economy.

“I have always believed in miracles,” Morrison, 51, told cheering supporters in Sydney, flanked by his wife and two daughters. “Tonight we’ve been delivered another one.”

Labor leader Bill Shorten, 52, earlier phoned Morrison to concede defeat, saying it was clear he could not form government even as millions of votes remained uncounted. He wished Morrison “good fortune and good courage in the service of our great nation” and said he would step down as opposition leader.

With 70% of the vote counted, the Liberal-National coalition is expected to win 74 seats in the 151-member lower house, with Labor on 65, according to the Australian Broadcasting Corp. The broadcaster said it remained unclear whether the coalition would gain the 76 seats needed to form a majority.

It is a remarkable win for the conservative government, which has been plagued by factional infighting during its six years in office that hobbled its ability to craft policy. Morrison, who took the helm in August and is the Liberals’ third leader in four years, spent much of the campaign relentlessly attacking Labor’s detailed policy platform that included boosting the minimum wage and taking tougher action against climate change.

He urged voters not to risk a change of government just when the economy -- in its 28th year of uninterrupted growth -- appears to be running out of steam.

“The economic story, the economic message, the economic choice was what differentiated the parties at this election,’’ Treasurer Josh Frydenberg said.

Morrison faces a drawn-out battle to legislate planned income tax cuts that could provide much-needed fiscal stimulus for the economy. His ability to do so will hinge on the makeup of the Senate, where populists and independents could hold the balance of power. Vote counting for the upper house will likely continue for days.

Morrison must also navigate the intensifying trade war between the U.S., Australia’s most important ally, and China, its biggest trading partner. The government must shore up ties with Beijing, which have been strained since the coalition last year introduced laws aimed at ending Chinese interference in national affairs, and barred telecommunications giant Huawei Technologies Co. from participating in its 5G network on security grounds.

Morrison closed down Labor’s lead during the five-week campaign, and a Newspoll published Saturday put the opposition just three points ahead. With the contest so tight, it was vital for both parties to hold or pick up seats held by a thin margin.

The battle in those districts was complicated by the growing support for populist, single-issue parties, which tapped into voter disaffection after a chaotic decade of infighting in both the mainstream parties led to six changes of prime minister since 2007. Shorten, 52, said voting alliances between the government and minority parties had undercut Labor’s vote.

Morrison’s conservatives picked up seats in the mainly rural states of Queensland and Tasmania and held ground elsewhere. Still, former Prime Minister Tony Abbott was an early casualty, losing his his formerly ultra-safe Sydney seat and ending his 25-year parliamentary career.

The coalition has been in office since 2013 and can boast a solid economic record over its two terms. The budget is on track to return to surplus next year after more than a decade of deficits. A hiring boom saw unemployment this year fall as low as 4.9% compared with 5.7% when it took office.

But a closer look reveals why many Australians simply feel they’re not reaping the spoils of the nation’s boom years. While company profits have soared more than 40% since mid-2016, wages have grown at a snail’s pace -- just 8%.

Australians are also being squeezed by record household debt after homeowners leveraged themselves to the eyeballs during a five-year property boom that peaked in mid-2017. A subsequent slump in home values is now weighing heavily on household spending, the lifeblood of Australia’s economy.

The Reserve Bank of Australia, which has kept the benchmark interest rate at a record low 1.5% since August 2016, is under pressure to cut again.

Shorten , who has led Labor since it lost office in 2013, focused on creating a “fairer society” with tax cuts aimed at the lower paid, and increased spending on hospitals, schools and childcare. Labor planned to pay for that in part by tightening tax concessions for stock market investors. He also planned to scale back tax incentives for property investors who helped fuel a housing boom that has priced many younger Australians out of the market.

The party also campaigned heavily on taking stronger measures to combat climate change and encourage renewable energy.

The progressive agenda left a big target for Morrison to attack -- a strategy that appears to have worked.

--With assistance from Chris Bourke.

To contact the reporters on this story: Jason Scott in Canberra at;Michael Heath in Sydney at

To contact the editors responsible for this story: Edward Johnson at, Malcolm Scott

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