I’ve been reading lots of stuff about the fundamental irrelevance of the Labor party and so on, and while this is inevitable in the aftermath of an election, it seems to be going on longer than usual. So let’s do a what-if. What if Labor had managed to get 3 per cent more votes than it actually did? The Liberals would have been out of government in every jurisdiction in Australia. Pundits would be falling all over themselves to point out the hopelessness of their cause, as witness the fact that they couldn’t win even with a strong economy and so on. This would be overstatement, but not as much as the corresponding claims with respect to Labor.
A related point is here at Crooked Timber
How much would it take to shift opinion by 3 per cent? I’d say a couple of percentage points on interest rates would have been enough, and if international bond markets ever get worried about big current account deficits that could happen overnight, and pretty much regardless of what the Reserve Bank thinks.