One Nation is capitalising on Australians' economic pessimism like never before, tying housing costs to immigration and promising a simple solution to a multilayered problem. The party's surge in popularity will be tested at the next federal election, with economic conditions playing a major role.
Cost-of-living squeeze and stagflation impulse
Households are experiencing economic pressures reminiscent of the 1970s, with elevated inflation and a stagnant economy. This 'stagflation impulse' creates a cost-of-living squeeze and fear for financial futures, including job insecurity. Australia's high housing costs and younger generations being priced out of home ownership intensify this discontent.
Consumer sentiment surveys, such as the Westpac-Melbourne Institute, show Australians are experiencing deep pessimism, with interest rate hikes weighing on buyers and mortgage holders.
One Nation's strategy: linking immigration to housing
Jordan McSwiney, a research fellow at the University of Canberra, notes that One Nation has tied housing affordability to immigration, a departure from its usual focus. 'This kind of link between immigration and housing allows them to address issues that are very front of mind to people, like the economy, but address it from their preferred terrain,' McSwiney says. He describes it as a 'bait and switch' to talk about immigration.
The party also links cost-of-living pressures to its campaign against net zero emissions and renewables, providing another talking point for Pauline Hanson.
Sequence of shocks driving voter sentiment
Australia's housing problem stems from decades of chronic undersupply and investor-centric tax settings, with 25 years of price growth outpacing wages. High migration can pressure rents and supply but also provides workers for construction and addresses skill shortages. AMP's chief economist, Shane Oliver, says policymakers need balance to avoid labour shortages and economic strain from an ageing population.
One Nation clearly blames immigration, with Hanson stating at her National Press Club address that 'immigration policy has our country in the state of crisis.' The Coalition has also linked migration to housing supply, legitimising One Nation's policy.
Surge in support during second inflationary wave
Initial inflation in late 2021 did not spark One Nation support, but the latest rise in living costs from late last year, worsened by the Iran war, has driven households to stock up on cheap goods and reduce spending. Australians feel worse due to new price hikes and mortgage rises on depleted savings.
A new OECD report finds 'real hourly wages in Australia' are falling, with living costs rising faster than paychecks. Gabriele Gratton, a professor at UNSW, says voters react to a 'sequence of economic shocks', losing trust in elites and seeking alternatives.
Growing scrutiny and electoral implications
One Nation's popularity will be tested at the next federal election by 2028. The global economic situation is uneasy due to the Iran war and potential oil supply disruptions. Hanson must navigate scrutiny as a central political player, and talk of a 'monoculture' may put off voters.
McSwiney says Labor faces a 'long, slow process' of improving people's lives, which might reduce One Nation's support. 'That is what might take the wind out of One Nation's sails, but that's a long game,' he says. For the Coalition, they need to present a serious opposition.
