Published in Business Spectator (Melbourne), 26 August 2010

http://www.businessspectator.com.au/bs.nsf/Article/The-perils-of-multi-party-Australia-pd20100825-8N3SA?OpenDocument

The result of the federal election that produced Australia’s first hung parliament in more than 60 years has left many observers puzzled. Since no party has won enough seats to govern in its own right, the ability to deliver effective government is called into question by commentators.

It is not only that the three or four independent members of the House of Representatives will be making it hard to find majorities in the lower house. The strong showing of the Greens in the Senate elections will also necessitate constant negotiations with them, regardless of which party will provide the Prime Minister.

Unsurprisingly, the Greens are using this year’s election results as an argument in favour of proportional representation in the lower house, from which they themselves may hope to benefit the most (in this election they would have won 17 House of Rep seats). Before rushing towards electoral reform, however, we should nevertheless consider the alternatives to the present system, many of which are far from appealing. Even after last Saturday’s results Australia still looks like one of the most stable and settled democracies.

The most remarkable feature of Australian democracy is its party-political continuity. The combined primary vote share of the ALP and the Coalition parties was about 89 percent in the first post-war election in 1946 and it is still 82 percent today. While of course there have been great swings between the political camps, the basic dichotomy between the ALP on the one hand and the Coalition on the other remains the defining feature of Australian politics.

Australia has generally fared well under this system. One of the reasons why there is so much confusion about the 2010 election result is precisely that Australians are unaccustomed to any form of political uncertainty. But if you find it unnerving that you now have to wait a few days to know the government arrangements for the next three years, you should look abroad and think again.

The Dutch also went to the polls this year. On June 9 they voted for a new Tweede Kamer der Staten-Generaal (their equivalent of the House of Representatives) after the Dutch government had resigned in February and called an election. Now, in mid-August, the Dutch still haven’t managed to swear in a new government.

One of the reasons is the fragmentation of the Dutch political scene. The strongest party, the conservative ‘People’s Party for Freedom and Democracy’, only managed to win 20.5 percent of the vote. There are now 10 parties in the Dutch parliament, including the single-issue Partij voor de Dieren, an animal rights pressure group.

Like the Australian parliament, the Dutch chamber has 150 seats, but it is voted for under a purely proportional electoral system. It now looks there will be a centre-right minority government, tolerated by the vocal critic of Islamisation, Geert Wilders. No-one knows whether this arrangement will last long.

Difficult government formations are a regular feature in many European countries. Post-war Germany opted for a Mixed Member Proportional voting system. Usually referred to as MMP, it is a variety of proportional representation. Ever since it was introduced, only one election delivered a single-party government, and that was back in 1957. All other governments have been coalition governments. Incidentally, New Zealand copied the German system in the 1990s, but it has remained hugely controversial. New Zealanders will be given a chance to vote on it again in a referendum next year.

In Germany, MMP has contributed to a fracturing of the political landscape. The German Greens have been firmly established in the political spectrum since the mid-1980s. After the country’s unification, the emergence of a post-communist populist party has further complicated the business of forming government. It is little wonder then that between election day and the swearing-in of a new government there can be two to three months of intense negotiations between the parties.

This is not necessarily a bad thing. The German parties are showing remarkable flexibility in finding coalition partners, particularly at state level. In one of them, for example, the Greens are united with the conservative Christian Democrats and the pro-business Free Democrats. It’s like a coalition including Tony Abbott, Steve Fielding and Bob Brown. It may not be the most appealing thought, but it seems to be a stable arrangement, at least in the state of Saarland.

Even in Britain with its first-past-the-post electoral system, the political scene has gradually eroded. Once upon a time, the Conservatives and Labour dominated British politics. In the 1955 election, both parties combined had 96 percent of the votes. But in this year’s general election, their share has dropped to a historic low of just 65 percent, forcing the Tories into a coalition with the Liberal Democrats.

Part of the coalition agreement of the new British government was to hold a referendum on the introduction of an Australian-style Alternative Vote system. Although the Liberal Democrats obviously hope that they would benefit from this, the Australian experience should teach them that a preferential electoral system can very well go hand in hand with an effective two-party state.

It may be nerve-wrecking for the Australian public to watch the negotiations between the parties and the independents in the wake of the federal election. However, there is no reason to believe that the election result poses a fundamental challenge to Australia’s political system. Other countries have managed and are managing with far more complicated political situations.

In any case, Australia’s electoral system even holds a remedy for political stalemates. Thanks to its very short terms, they can only last for a maximum of three years. And there is always the option of a double dissolution if necessary.