The Coalition’s failure in two crucial by-elections may also have sounded the death knell for corporate tax cuts as the Labor Party ramps up the pressure on the Prime Minister Malcolm Turnbull.
Emboldened by his wins in Longman and Braddon, Labor leader Bill Shorten is pushing for the dumping of both tax cuts and the PM.
It comes amid reports some government ministers want Mr Turnbull to drop promised tax relief for businesses with a turnover of more than $50 million.
“He needs to drop these tax cuts on the way out of office. He needs to drop them and then he needs to leave the keys to The Lodge and then he needs to go,” Mr Shorten told Nine Network on Monday.
While Mr Turnbull is still committed to the tax cut plan, on Sunday he stopped short of recommitting to take the policy to the next election.
The Prime Minister said the government would look “very seriously and thoughtfully and humbly” at the response from voters.
The Coalition still plans to bring the legislation to a vote in the Senate in the next sitting fortnight and take the tax cuts to the next election if the bill is defeated.
The success of the ALP in Queensland’s Longman, where the Liberal National vote tanked, also has the ALP targeting other low-income seats at the next federal election.
Incoming national Labor president Wayne Swan said voters were worried about growing inequality, especially in electorates where wages were flat.
“If you look at the median income in Longman and Braddon, it’s $43,000,” Mr Swan told Sky News on Monday.
“People on $43,000 don’t even qualify for the government’s measly $10 tax cuts.”
Mr Swan said the failure of trickle down economics was most keenly felt in those seats where people felt left behind.
“There are plenty of electorates around Australia where those median incomes are around $43,000 – just like Longman – that can be won,” Mr Swan said.
“Not just from the Liberals here, but from the Nationals as well.
People out there have twigged to the fact that stagnating wages and growing inequality in Australia is a problem for their living standards.”
Former prime minister Tony Abbott said the Coalition’s candidates could not be blamed for the poor by-election results, arguing the government must listen to the voters and recalibrate its approach.
“We’ve got to draw the right lessons from Saturday, do things that are consistent with our values, give our people something to fight for, something for the electorate to hope in,” Mr Abbott told 2GB radio.
He restated calls to pull out of the Paris climate agreement and scale back immigration, but insisted he did not want to dump Mr Turnbull as party leader.
“I don’t want to change the leader, I want to change the policy. If you change leader but not policy, you jump out of the frying pan into the fire.”
Labor retained the marginal federal seats of Longman in Queensland and Braddon in Tasmania on Saturday, despite months of hard campaigning by the Liberals.
Cabinet minister Christopher Pyne claimed the by-election results were good for the government, despite a 10 per cent swing against the LNP in Longman, saying it was never going to win anyway.
“The results on the weekend were not that remarkable,” he said.
Mr Shorten said the by-election results ended recent speculation about his leadership and a potential challenge by frontbencher Anthony Albanese.
“I didn’t believe it was a problem last week and I certainly don’t now,” the Opposition Leader said.
Susan Lamb’s Longman win, with an expected 54.5 per cent of the two-party preferred vote, came on the back of a One Nation drain of LNP votes.
A similar swing at a general election could threaten senior government figures, including Home Affairs Minister Peter Dutton.