SA becomes key election battleground

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By Leith van Onselen

The Abbott Government could rue the day that it let the car assembly industry shutter.

With South Australian unemployment shooting for the stars:

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Full-time jobs growth and hours worked contracting at a rate of knots:

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And the closure of Holden in 2017 likely to cost tens-of-thousands of jobs, independent senator for South Australia, Nick Xenophon, is looking to cash-in and has set-up a new party that plans to run in all 11 lower house seats at the next year’s federal election. From The ABC:

[The] Nick Xenophon Team (NXT) would be drawn from the political centre.

“The ambition is to run in all 11 lower house seats and if the election is held some time next year I expect that’s what we’ll have,” he said…

“Once Holden leaves South Australia as a car maker at the end of 2017 there’ll be a huge void that will be left. There are something like 25,000 jobs that are at stake conservatively,” he said.

He warned that unless the void was filled with new innovative businesses in the auto supply chain there would be massive job losses in South Australia and in Victoria…

Australian National University Emeritus Professor John Warhurst, who was born and educated in South Australia, thinks the NXT alliance is a possible threat to some relatively safe seats.

“If he and his team standing in the lower house are polling anywhere near how he himself has managed to poll in the Senate, you know in the mid-20 per cent range, then he’s a threat to both sides of major party politics,” he said…

“For a state that sees its place in the federation under challenge, and being relegated to one of the also rans in the federation to have a major decision like that was a major slap in the face for South Australians,” he said.

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South Australian premier, Jay Weatherill, has labelled Xenophon an “opportunist” but warns that the Abbott Government faces “carnage” at the next election, especially if it doesn’t give South Australia the submarines contract:

It will be carnage for Liberals in South Australia and I think they know it. It doesn’t really matter what they do. If they don’t get this decision right [i.e. submarines], the people of South Australia will respond, I think, very assertively at the ballot box. And why wouldn’t they? I mean, here’s a state that’s crying out for jobs. I mean, we -we’re a proud manufacturing state…

I’ve got a lot of time for Nick, but Nick’s an opportunist. I mean, he outflanks us on the left and the right depending on where the opportunity presents itself.

Opportunist or not, Xenophon is set to create more headaches for the Abbott Government.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.