Many commentators have pontificated on the socio-economic divisions revealed in May’s federal election outcome. A particular narrative emerged — pushed by the AFR, Waleed Aly and even Victorian MP Tim Smith — that the Coalition is becoming the home of the working class, while Labor, Greens and teal voters are increasingly affluent.
On Tuesday, Crikey’s Guy Rundle posited that Labor is now “the party of capital”.
Say what you like about Labor’s governing choices, but are capital-owners really Labor’s new base? And does the role-reversal narrative hold water?
Most of these takes have relied on vibes more than statistics. Thankfully analyses of Australian Cooperative Election Survey (ACES) data presented at a Macquarie University seminar last week shed new light on the question.
The data suggests the real dividing line in Australian voting patterns is not income, but asset ownership. Particularly home ownership.
The real electoral divide: housing
Analysis by YouGov data scientist Shaun Ratcliff shows a significant divergence in the election results between homeowners and renters.
More owners moved towards or stayed with the Coalition, while more renters defected to or stuck with Labor, the Greens and teals. The more assets someone owned (predominantly housing), the more likely they were to either stay with or defect to the Coalition.
Some voters with higher incomes did move to Labor, the Greens and teals (though some also moved towards the Coalition, and Labor’s primary vote share is still lower among higher-income people), but they were much less likely to do so if they owned one or more houses. The biggest determinant of who you vote for is now wealth, not income.
This divide wasn’t just evident post-election — cannier political operatives took note and adjusted their strategies during the campaign.
Pollster Kos Samaras, whose firm RedBridge advised many teal independent candidates, told Crikey he advised them that the voters most likely to move away from the conservatives were renters, then mortgagees, but not outright owners. They also targeted electorates where recent demographic shifts had increased the numbers of younger renters.
On election night and in its aftermath, many commentators assumed that swings against the Coalition in high-income areas meant that wealthy people had changed their votes. But this is what statisticians like Ratcliff call an “ecological fallacy”: they’d missed that it was often the least wealthy people in richer areas, particularly those renting in areas they couldn’t afford to buy a home, who drove the teal wave, “Greenslide” and change of government.
A long-run trend
The housing divide might seem strange given Labor dropped its controversial negative gearing and capital gains tax policies. But the relationship between homeownership and voting preference “goes back at least to the 1990s”, according to Ratcliff, encompassing multiple party platforms.
My guess is that those without assets are far more focused on their income from work, and thus are attracted to Labor, which emphasises jobs and wage growth. Conversely, those who own assets — especially multiple — have a vested interest in booming asset markets and low capital taxation, on which the Coalition holds an entrenched electoral advantage.
The Greens also appeal to many renters. Academic Ben Spies-Butcher, who also presented at the seminar, found that in the election the Greens gained the support of 18.9% of private renters — 35.6% of those renting from or living with family — but only 13.6% of mortgagees and 8.7% of outright owners.
Could rising repayments change homeowners’ minds?
How will the politics of homeownership evolve amid interest rate hikes?
“We haven’t had interest rate rises before at a time when housing was this unaffordable. In 2022, housing was a major election issue. In 2025, housing will be the defining issue,” Samaras says.
It presents a possibility for the left to grow its support among mortgagees, who will now be much more conscious of their income and costs than their investment value, while maintaining the support of renters whose costs are also rising.
Labor’s proposed review of the Reserve Bank could prove significant, and if it can follow through on its promise to get wages moving, it could be rewarded.
Conversely, the right could frame itself as the true defender of aspirational wealth-builders and grow its advantage in this cohort. Samaras believes the Coalition is likely to “go hard on super for housing, including lowering the threshold for accessing your super to cope with mortgage stress”.
But in the long term, doubling down on its home-owning base could spell trouble for the right.
“The potential issue for the Coalition is that the share of non-owners has increased slowly over the last couple of decades, and is much higher for younger generations than it was for older generations at the same age,” says Ratcliff. “This could point to a political issue for the Liberal Party in the future, and indeed was likely one of the reasons they lost so many seats in the large metropolitan areas at the 2022 election.”
