Federal election: key factor will decide new prime minister

Since the coronavirus pandemic arrived on Australia’s shores, the cost of rent has risen by an average of 47 per cent, with the cost of mortgage repayments up 33.8 per cent.

Meanwhile, the broader cost of living as measured by the CPI has risen by 19.9 per cent.

But naturally the change in prices in various different types of goods and services can vary dramatically.

Which raises an interesting question, to what degree could the challenging conditions facing millions of Australians impact the result on election day?

After all, it wouldn’t be the first time an election was significantly influenced by perceptions of which party could better managed the cost of living.

Marginal Seats

In order to get a handle on the potential impact of households in financial stress on the election, we’ll be looking at data from research firm Digital Finance Analytics (DFA) on mortgage stress, rental stress and broader financial stress for the top 25 most marginal electorates nationally.

Mortgage and rental stress are defined by DFA on a cashflow basis, so if a household is spending more than they have coming in, they are considered in stress.

Of these 25 electorates, 10 are held by the Coalition, 7 by Labor, 3 by the Greens and 5 by independents. With the current two party preferred margins ranging from 0.17 per cent in Gilmore to 3.2 per cent in Banks.

Across these various electorates the greatest level of rental stress is present in the seat of Gilmore on the New South Wales south coast, with 93.9 per cent of renting households seeing negative levels of net cashflow.

The greatest level of mortgage stress is held in the electorate of Lyons in Western Tasmania, with 67.7 per cent of mortgage holders under significant pressure.

In terms of the greatest level of overall financial stress, which encompasses both rental and mortgage stress for a given area, the worst affected electorate of the 25 that are currently in focus is Griffith in southern inner-city Brisbane with 63.6 per cent of households overall in stress.

A Notable Mention

As some of you may have noticed in the list of the most marginal electorates across the nation, the seat of Dickson, which has been held by Opposition Leader Peter Dutton since the 2001 election. The seat has been making headlines in recent weeks amid polling that suggests it could potentially be an increasingly close-run contest.

In the area, 43.9 per cent of mortgage holders were in stress, along with 58.0 per cent of renters. Overall 38.9 per cent of households in the area find themselves in financial stress.

To what degree the current level of financial stress in Dickson will impact matters on election day remains to be seen, but what is more concrete is the dramatic surge in households in financial difficulty in Dickson and across the nation compared with election day 2022.

Mortgage Stress

If we take margins out of the equation and focus squarely on the federal electorates facing the greatest degree of mortgage stress, 9 out of the top 10 electorates are held by Labor, with 1 held by the Coalition.

The Greatest level of mortgage stress is present in the electorate of Greenway, which is located in North Western Sydney. In this locale 93.6 per cent of mortgage holders are currently in stress.

Rental Stress

When it comes to which 10 electorates are facing the greatest level of rental stress, 9 out of 10 are held by Labor, with 1 held by independent Dai Le, in the Western Sydney seat of Fowler.

The Greatest level of rental stress is present in the electorate of Macarthur, which is located in South Western Sydney. In this locale 95.1 per cent of renters are currently in stress.

Financial Stress

The picture surrounding overall levels of financial stress is somewhat more mixed, with 7 out of 10 electorates held by Labor, 2 by the Greens and 1 by the Liberal Party.

The Greatest level of financial stress overall is present in the electorate of Greenway, which also won the undesirable title of highest mortgage stress. In this locale 82.2 per cent of households are currently in stress.

The Outlook

As late as early March it appeared that the Coalition was in a prime position to potentially make the Albanese government the first one term government since the Great Depression. Modelling based on aggregate polling projected that were likely to win the largest number of seats and bookies had them ahead quite strongly all the way until mid-March.

Since then, things have gone south for the Coalition. Where just six weeks ago oddsmakers saw a 63 per cent chance of a Coalition government, today as the clock ticks down to election day the figure has fallen to just 21 per cent.

When it comes to elections, nothing can be taken for granted or assumed to be certain, but if the opposition led by Peter Dutton manages to emerge victorious, there is a solid argument to be made that the challenging nature of the circumstances faced by millions of Australian households would have played a role in that outcome.