One Nation scores historic win in Farrer by-election | Insiders | ABC NEWS

Key Concepts

• Farah By-election: A historic regional New South Wales by-election where One Nation secured its first lower house seat, signaling a massive collapse in the Liberal Party vote.
• Preference Deals: The controversial decision by the Liberal Party to preference One Nation ahead of independent candidates, which critics argue granted One Nation legitimacy.
• Budget 2024/25: The Albanese government’s upcoming budget, featuring significant policy shifts on negative gearing, capital gains tax (CGT), and domestic gas reservation.
• Intergenerational Equity: The government's stated justification for tax reforms, aimed at addressing housing affordability for younger generations.
• Domestic Gas Reservation: A proposed 20% reservation of gas production for domestic use to lower prices, impacting existing export contracts.
• Political Realignment: The shift in voter behavior where traditional party loyalty is declining, leading to tactical voting and the rise of minor parties.

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1. The Farah By-election: A Seismic Shift

The Farah by-election resulted in a historic victory for One Nation’s David Farley, with the Liberal Party vote collapsing from 43% (in the previous election) to approximately 12%.

• Key Data: One Nation achieved nearly 40% of the primary vote. The combined Coalition vote fell to roughly 22.5%.
• The "Orange Wave": One Nation dominated regional polling booths, while independent candidate Michelle Milthorp underperformed compared to previous expectations.
• Strategic Failure: Analysts noted that the Liberal Party’s decision to preference One Nation over the independent candidate backfired, as it signaled to voters that supporting One Nation was an acceptable alternative to the major parties.

2. Liberal Party Crisis and Future Direction

Shadow Treasurer Tim Wilson and other commentators discussed the "existential" threat facing the Liberal Party.

• Internal Conflict: There is significant debate regarding whether the party should move toward the "sensible center" or continue chasing the conservative flank by adopting policies on migration and net-zero targets.
• Leadership Challenges: Angus Taylor is under pressure to define a "bold and confident" vision for the country. Critics, including Nikki Sava, argue that the party currently lacks a clear identity and that defending the preference deal with One Nation was a moral and political error.
• Coalition Potential: There is speculation—and some openness from within the Liberal ranks—about the possibility of future minority governments involving One Nation, a prospect that has drawn sharp criticism from Labor.

3. The Federal Budget: Breaking Promises

The Albanese government is preparing to overhaul investment tax breaks, despite having ruled these changes out during the previous election campaign.

• Policy Changes: Negative gearing will be limited to newly built homes, and capital gains tax will revert to a less generous model (reminiscent of the Keating era).
• Justification: The government argues that these measures are necessary to address housing supply and intergenerational inequity.
• Opposition Stance: The Coalition is framing these moves as a "betrayal" and a "tax grab," arguing that they will not solve the housing supply crisis and may increase rents. Tim Wilson emphasized that the Coalition will scrutinize the details, particularly regarding the impact on small businesses and trusts.

4. Domestic Gas Reservation Policy

The government is introducing a 20% domestic gas reservation policy to address high energy costs for local manufacturers.

• Technical Complexity: The policy requires producers to reserve 20% of production for the domestic market.
• Implementation Challenges: Details remain unclear regarding how this will interact with existing export contracts. Producers are concerned about the potential for retrospective impacts on their operations, while manufacturers have welcomed the move as a necessary step to lower domestic prices.

5. Reintegration of ISIS-Linked Families

The return of four women and nine children from ISIS-linked camps sparked a heated political debate.

• Legal Status: Three of the women have been charged with terrorism-related offenses, including enslavement.
• Government Responsibility: The panel noted that the threshold for denying an Australian citizen a passport is extremely high. Once the women were issued passports, the government had limited legal grounds to prevent their return.
• Security Consensus: ASIO boss Mike Burgess indicated confidence in the current arrangements to manage the cohort, though concerns remain regarding the long-term deradicalization of the children involved.

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Synthesis and Conclusion

The Farah by-election serves as a "canary in the coal mine" for Australian politics, highlighting a profound voter dissatisfaction with the status quo. Both major parties are struggling to adapt: the Liberal Party is grappling with a loss of brand loyalty and an identity crisis, while the Labor government is risking its reputation for "delivery" by breaking election promises to address systemic issues like housing and cost-of-living. The upcoming budget will be a critical test of whether the government can successfully frame these controversial tax reforms as a necessary, bold response to national challenges rather than a breach of public trust.