After a decade of political instability in Australia – the prime-ministership has changed hands five times since 2007 – last year might have brought a dose of normality to the country’s national affairs. Instead, Prime Minister Malcolm Turnbull fought a close election that was marked by a surge of right-wing populism that saw stridently anti-immigrant Pauline Hanson and her One Nation party returned to federal parliament after an absence of nearly 20 years.
Australia held its sixth general election since 2001 on July 2, 2016. After a campaign of eight weeks, Turnbull’s centre-right Liberal-National coalition was returned to power with a mere one-seat majority in the 150-seat House of Representatives. Since then, the parliament has rejected a same-sex marriage plebiscite and has implemented even more stringent refugee policies.
Turnbull, the country’s leader since a party-room coup in 2014, earlier introduced legislation to reform the Senate with the abolition of “group voting tickets,” a complex preferential electoral system that enabled members of the 76-seat upper house to be elected with less than 2 percent of the primary vote. Since the change, minor parties are less likely to hold the balance of power.
Economic relations with China, its number one trading partner, were strained in 2016. Chinese investment in Australia’s real estate during 2015 was double the year-earlier total, but the Australian government rejected Cheung Kong Infrastructure’s A$25.1 billion bid to buy Ausgrid, an electricity company, in favour of a local offer worth A$20.8 billion. Shanghai Pengxin’s bid to buy S. Kidman & Co, a cattle-raising concern that holds 1 percent of Australia’s landmass, was also rejected. The Australian government said the decision was based on national security interests, while China saw the block as discouraging to investors.
Overall, Australia’s economy recorded its worst performance since the end of the Global Financial Crisis, with the economy shrinking for the first time in a quarter since 2011. The construction sector fell the most since 2000 and the real estate market had its slowest year since 2014. The third-quarter contraction of 0.5 percent, only the fourth quarterly decline in the past 25 years, was widely regarded as a wake-up call for the government rather than the precursor to a recession.
One bright spot was coal exports, for which prices increased by almost 280 percent in 2016 in a reaction to the United States, China and Indonesia reducing supplies to meet environmental standards. Concern over fossil fuels was intensified by the Great Barrier Reef, one of Australia’s most important visitor attractions, recording its worst die-off ever: a bleaching of staghorn coral along the 700-kilometre (430-mile) Bourke Reef section. The die-off was attributed to “El Nino” weather effects, climate change and the coral’s proximity to coal mines.