Australia’s post-pandemic politics may look more divided, but fears of a rising populist backlash are overstated. Demographics, institutions and economic geography still anchor the nation’s long-standing consensus in favour of openness, migration and global integration.

As Australia was tentatively exiting its strict lockdowns and border closures that marked the COVID-19 pandemic, some worried that the legacy of the ‘Fortress Australia’ approach to pandemic control would be to steer the country’s political culture in a more insular and divided direction, damaging a fragile consensus in favour of migration and integration with its region.

Even under the centre-left Labor Party that has governed since 2022, there is clearly a new ferment on the political right that has buoyed support for the populist One Nation party and seen conservative hardliners assert influence within the opposition Liberal–National party coalition. A series of anti-migration marches in major cities have underlined the increasing resonance of far-right messaging in disparate online communities.

But anxieties about the prospect of conservative populism emerging as an agenda-setting force in Australian politics are overblown. In Australia, the forces of nationalism and insularity are growing more assertive precisely because they are losing.

The disastrous results of the Liberal–National opposition’s flirtations with culture-war populism in the May 2025 federal election campaign, and the dominance of the Labor government in the months since its landslide re-election, reflect more than cyclical political factors. Australia’s demographic realities and economic geography dovetail with its electoral system to push anti-globalisation forces to the political sidelines, and ensure that the technocratic consensus in favour of openness to overseas goods, capital and people retains strong political underpinnings.

Effective fiscal federalism, and a well-functioning tax and transfer system, have helped ensure that the aggregate economic benefits of international integration are broadly shared across society. Strong macroeconomic management has helped sustain living standards amid the liberalisation and internationalisation of the economy from the 1980s and 1990s, including by blunting the impacts of external shocks like the Asian Financial Crisis, the Global Financial Crisis and the COVID-19 pandemic.

A suite of technocratic institutions, most notably the Productivity Commission, have also helped embed a liberal and pro-trade orthodoxy by supplying credible evidence for the benefits of keeping the economy open to overseas goods, capital and people. This is broadly mirrored among the public. Polling shows that most Australians — almost a third of whom are born overseas — agree that migration, multiculturalism and free trade benefit their country, even though they express ambivalence about the exact scale of the migration intake and want more local manufacturing.

Public attitudes provide political cover for efforts to further Australia’s integration into global markets, but they are only part of the story. Political economy and institutional factors have arguably been the decisive ingredients in sustaining the political underpinnings of Australia’s pro-globalisation consensus, particularly by ensuring that support for it is distributed across the left–right divide in the party system.

Labor Party governments co-opted their trade union allies into the free-trade agenda in the 1980s and 1990s, arguing that protectionism was a brake on export competitiveness and workers’ spending power. With Australia having strong comparative advantage in a range of primary industries, the rural-based National Party backed the free-market approach of its Liberal Party coalition partners to ensure trade liberalisation enjoyed support from the right.

Political economy and electoral incentives align to sustain support for immigration too. The business sector’s interest in expanding domestic markets and the pool of skilled labour has seen it lobby on behalf of the migration program on the conservative side of politics. With the trade union movement long having shed its historic hostility to migration, Labor now proudly positions itself as the champion of multiculturalism and has been the traditional political home of many migrant communities (a fact that some conservatives have recruited into conspiracy theories about its current migration policy).

The upshot is that voters must look beyond mainstream parties if they want to find serious promises of dramatic cuts to migration and a return to protectionism. Australia’s electoral system makes sure that the fringe parties promising such things are relegated to the political sidelines. The preferential (or ‘instant-runoff’) voting system funnels minor-party votes back to the major parties. Compulsory voting in turn blunts the incentive for the major parties to generate turnout by appealing to voters at the ideological poles.

But public opinion may now be the weakest link in the chain of factors sustaining this pro-openness status quo. Whether the Labor government can restore growth in living standards in the years ahead may prove pivotal to maintaining public confidence in an economic model based on flexible markets, migration and deeper regional integration with the Asia Pacific.

Treasurer Jim Chalmers captured the national narrative briefly with a new productivity push, only for his party to smother serious reform ambitions for now. The risk-averse Prime Minister Anthony Albanese has repeatedly reaffirmed the elite consensus towards openness, but will need to take the plunge on domestic reforms to ensure that consensus can be sustained within the community. A weak and divided opposition is not effectively holding the government’s feet to the fire on policy.

With a huge parliamentary majority, there is little excuse for not making the hard decisions to future-proof growth and equity, both of which are under strain amid a stagnation in productivity and a tax system skewed against young workers. Housing (un)affordability has become a key driver of class and intergenerational inequality and a major burden on household budgets. With the housing crisis increasingly linked in the public mind with the post-pandemic spike in migration, the Albanese government has resisted pressure to curtail the scale of permanent skilled migration while instead scapegoating one of the most economically valuable migrant cohorts — international students.

Australia’s openness to goods, capital and people is a national superpower that must not be put at risk by governments failing to deliver the microeconomic reforms and public investments needed to future-proof living standards in a more populous country. As in other small open economies, success in making globalisation work at home will give Australian leaders a stronger political footing from which to advocate for its principles on the world stage.

Republished from East Asia Forum, November 23 2024.

The views expressed in this article may or may not reflect those of Pearls and Irritations.

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