How would a business guru understand the weekend’s election results?
What we are witnessing is the death of two-party politics.
I’ve actually written about this before, and like most massive trends like this, it doesn’t happen overnight, but it does happen.
But the weekend’s election gives a pretty clear insight into the phenomenon – Labor won with barely a third of the vote – although I’ve been talking about these trends for a few years now.
I actually think ‘disruption’ is the right framework to think about here.
Basically, until recently, politics was a duopoly, and that duopoly is in the process of being disrupted – the duopoly’s market share is being eaten up by new competitors.
And that’s happening because the two major parties had moats and those moats are now being eroded.
(“Moats” is a business term made famous by Warren Buffett. It describes anything that protects a company from its competitors – Coke’s brand or Amazon’s size, for example.)
The four moats I’m talking about are: people, media power, money and brand.
Moat 1: People
Labor and the Coalition used to have the numbers. They had large memberships and active volunteer bases.
But in recent years, membership has been declining and it’s hard and harder to turn out the volunteers in large numbers.
And that’s not too surprising. What does membership of one of these two parties give you? You have no say in the creation of policy, you have candidates helicoptered in over your head, and all you get is the opportunity to stand in the rain and hand out how to vote cards for a candidate you have no connection with every now and again.
That’s a situation that’s ripe for disruption for brands that can allow people to rally around a particular cause, allow them to have big impact on the outcome, and create countless opportunities for cool Instagram photos.
And even in the electorates where the major parties still have the numbers, numbers don’t matter in the way they used to. I effectively run a media company with national reach, and I do it with just a handful of staff.
Moat 2: Media Power
The main stream media still buys into and supports the duopoly. The “Leader’s Debate” for example brings together two guys who, at best, barely account for 50% of the population.
That’s not representative.
But the mainstream media is becoming less and less relevant, and it is much easier for people, with even a little bit of funding, to communicate directly with their electorate.
This is about changes to the media landscape, but those changes have eroded the two parties control of information, and have opened the way for disruptors to cut their turf.
Moat 3: Money
Connected with this is the flow of money. The two parties tap a lot of donations to fund their campaigns, but as the Teal independents have shown, you can still source sizeable war-chests through direct donations.
And money doesn’t matter the way it used to. Social media gives you a targeted ad-spend that can give you great bang for your buck.
Money is not the moat it used to be.
Moat 4: Brand
Labor and the Coalition used to get a lot of mileage from their brand. But ask Josh Frydenberg how that brand is going. (Seriously think he would have run if he had run as an independent.)
In many electorates the brand was a liability.
Because a national brand doesn’t give you the ability to meet your customers specific needs.
What’s the parallel? Maybe Qantas and Jetstar. Qantas was being disrupted by Virgin who recognised that travellers wanted a cheap option. In response, Qantas created a whole new brand – Jetstar – to give the people what they wanted.
The Liberal Party struggled to build a platform that could bring together its regional and urban voters, and needed to pull a Jetstar. But there just isn’t precedent for that in politics.
Anyway, the erosion of brand power is what has allowed so many un-branded (i.e independent) people into Canberra this year.
Moats are gone
Anyway, I just don’t see any of these trends reversing anytime soon, and so I think that means that the duopoly will continue to lose market share.
And our democracy will be messier…
… but also more vibrant and representative.
As it should be.
JG.
Ruth says
Jon, you know as you are of Greek descent, that democracy ends in people voting for what they get out of the system rather than what they put in.
It destroyed Rome and the early Chinese Empire and the later empires.
How you can say ‘as it should be’ is beyond me.
You know how the game ends. After the people vote for what they get rather than give, the collapse of the currency is assured.
Or do you plan to desert the country first? Your country needs you now. What is your country? Are you Greek or Australian? Where will you go? Who are you and what are your real values?
Heather says
Jon
I think the election was a fraud.
How can the AEC call the voting stations at 7:30 or so at night and tell them to reassign the preferences? The particular Party or independent assigned THEIR own choice of where they give THEIR preference to. The AEC should not have any authority to reassign where the preferences are counted toward. Shameful. How can Socialist Labour win a majority on less than a third of votes and others have higher numbers but don’t get in?
They want to change how politics is done. A start would be better respect on the Parliament floor and in the corridors to set a better behaviour example instead of the two major parties behaving like school-yard bullies. But other changes could bring more control and even less democracy than we’ve had in the past 2-5 years? How much representation does a person have in Socialist China?
There is NO true Democracy in action since 2019.
Virginia says
I totally agree with every word. I have seen how the AEC automatically pass votes onto the majors, even though at that time the party did not agree to pass on votes onto any major party. By AEC’s own rules a party may choose not to preference if that is their stance.