One Nation capitalizes on Australian economic pessimism amid 'stagflation impulse'

Pauline Hanson's One Nation party is experiencing a surge in popularity, reaching unprecedented polling numbers and achieving higher approval ratings for its leader than the prime minister and opposition leader. This rise is occurring against a backdrop of significant voter frustration with mainstream parties, a sentiment that has ebbed and flowed over the three decades since Hanson first entered federal politics.

Households are grappling with economic pressures reminiscent of the 1970s, characterized by high inflation and stagnant economic growth. This "stagflation impulse," as some economists term it, manifests as a cost-of-living squeeze coupled with anxieties about job security and financial futures. Intensifying this "winter of discontent" are Australia's notoriously high housing costs and the growing frustration among younger generations unable to afford home ownership, as reflected in deep pessimism in consumer sentiment surveys.

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Economic policy and housing are not really territories that One Nation is usually comfortable on. This kind of link between immigration and housing allows them to address issues that are very front of mind to people, like the economy, but address it from their preferred terrain.

While economic strain is not new to Australian voters, researchers note a key difference this time: One Nation is effectively linking housing affordability and other economic concerns to immigration. Jordan McSwiney, a researcher at the University of Canberra, describes this as a "bait and switch" tactic, where the party uses pressing economic issues to pivot to its core anti-immigration platform. This strategy allows them to address front-of-mind concerns while operating within their preferred political terrain.

Furthermore, the party connects cost-of-living pressures to its established opposition to net zero emissions and renewable energy policies. The housing affordability crisis itself is a complex issue, stemming from decades of undersupply and investor-focused tax settings. While periods of high migration can strain immediate housing supply, they also provide essential workers for construction and contribute to the broader economy. Economists like AMP's Shane Oliver point to this multifaceted background as contributing to the current public discontent.

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One Nation is doing a bit of a bait and switch, in that they use the context of housing and the economy to talk about what they really want to talk about, which is immigration.