CED Newsletters & Policy Alerts

Policy Alert: Incumbent Labor Party Wins Australian Election

May 15, 2025

Action: In Australia’s general election on May 3, Prime Minister Anthony Albanese of the center-left Labor Party was re-elected, becoming the first leader in decades to secure a second consecutive three-year term, defeating opposition leader Peter Dutton of the center-right Liberal-National coalition. According to the most recent count, Labor secured 93 seats in the House of Representatives in a landslide victory, while the Liberal coalition won only 44. Two seats remain too close to call. Dutton lost his seat in Queensland which he had held for 24 years.

Key Insights

• Inflation and housing were two of the major issues concerning Australians as they headed to the polls. Annual inflation peaked at 7.8% a year after Labor was elected in 2022, and housing prices and rents have soared as builders were forced to absorb profit margins. Australia has compulsory voting and uses the single-transferable vote aimed at forming centrist governments.
• Neither Albanese or Dutton spent much time during their campaigns addressing President Trump, as the effects of tariffs are less likely to be severe in Australia. However, Labor branded the opposition leader as “DOGE-y Dutton,” accusing him of mimicking the Department of Government Efficiency (DOGE). The Liberal Party had blamed government waste for inflation and increasing interest rates, and promised to cut one in five public service jobs to reduce spending.
• The Liberal Party appointed Sussan Ley as its new leader. Ley, from the moderate faction of the party, is the Liberals’ first woman leader and has served as a senior minister in a wide range of portfolios. "We have to have a Liberal Party that respects modern Australia, that reflects modern Australia, and that represents modern Australia. And we have to meet the people where they are,” said Ley, who has expressed a desire to reconnect the party with women and young people.
• In his second term, Prime Minister Albanese is expected to work towards boosting security and economic ties with Southeast Asia while continuing its close alliance with the US. “The challenge facing the government is how to manage diplomacy so that Australia has some room for manoeuvre and is not isolated by China while broadly remaining in line with US strategic policy,” said Nick Bisley, dean of humanities and social sciences at Australia’s La Trobe University.