Malcolm Turnbull's ascendant Coalition government is moving closer to calling an early election, even as strategists warn of a backlash from voters that could cost it 10 or more seats.
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Government strategists mull over the possibility of a snap double dissolution election which could see seats lost to Labor. Fairfax's James Massola explains.
The negative voter reaction is considered "containable" and is being factored in to considerations, with private polling suggesting voters will stick with Mr Turnbull, even if they mark the Coalition down for backing away from now-unaffordable promises of significant tax cuts and fast budget repair.
Fairfax Media has spoken to senior ministers and party strategists who all confirmed an early poll and a double dissolution election, which must be called no later than May 11 and held no later than July 16, was increasingly likely.
On Friday, Mr Turnbull left open the option if the government's plans to restore the Australian Building and Construction Commission is blocked again by the Senate.
"As to the question about a double dissolution under section 57 of Constitution, that is obviously available in circumstances where bills have been rejected within the appropriate time period ... it is an option available to government in those circumstances, but at the moment your question is a hypothetical one," he said.
People close to the Prime Minister said Mr Turnbull's thinking was "evolving" on the issue and that he was "seeking all opinions and listening to people carefully" before making a decision.
"Prime ministers call an election when they think they can win," the source said.
Another well-placed source said an early poll was a "live option, more so than a month ago", while a third said discussions were "moving", and that " the prospect that they may make that decision has increased".
"We can't get clear air to talk about economic issues. Labor is throwing out ideas and policies that are underdone, the discussion is not productive, so why not short-circuit it and then get going again?"
Earlier on Friday, Innovation Minister Christopher Pyne told the Nine Network's breakfast television audience that an early poll was "a live option", citing blocked union corruption legislation as a likely justification.
"There is not only issues around savings measures [stuck in the Senate], there is the Australian Building and Construction Commission," he said.
Several senior Coalition figures acknowledged that an atmospheric change had occurred in politics making a snap poll more likely
Opposition Leader Bill Shorten said on Friday that the opposition was "not afraid of an election but the Liberals are afraid of the budget. They need to tell us what their economic plans are."
The Coalition's Registered Organisations Bill, which is designed to improve union governance, is already a double dissolution trigger for the government and a second bill, designed to restore the ABCC, is also likely to be rejected by the Senate again and become a trigger.
Several senior Coalition figures acknowledged that an "atmospheric" change had occurred in politics, making a snap poll more likely.
A well-placed source described the prospect of seat losses as "inevitable" but not, in of itself, a sufficient deterrent against going early.
"Soldiers die in wars, mate; generals accept that," the source quipped.
Strategists remain confident of victory, given the government holds 90 seats to Labor's 55 in the House of Representatives. But with its current lead in the polls, and the Prime Minister's high personal standing on a head-to-head comparison with Mr Shorten's, hardheads also acknowledge that a repeat of former prime minister Tony Abbott's landslide win in 2013 was out of reach.
A senior source within the Coalition has revealed to Fairfax Media that losing seats is regarded as inevitable in light of Labor's stronger than expected performance, the "high water mark" of 2013, a softer than hoped for economy, and the absence of room in a cash-strapped budget to deliver pre-election spending.
Liberal and Nationals strategists are also growing increasingly conscious of Labor's slow but steady recovery to be now within four points of the Coalition according to last weekend's Fairfax-Ipsos poll.
For their part, Labor strategists believe the opposition's improvement has been driven by a combination of factors ranging from sluggish economic growth and disappointment at Mr Turnbull's dithering over tax reform, through to the opposition's willingness to get out in front with "substantial" policies in areas of taxation, education, and health.
A sober assessment of the Coalition's prospects has it losing as many as four seats in Queensland where the "high water mark" reference was particularly applied. Coalition strategists believe seats that could fall in northern Queensland include Capricornia (0.8 per cent), Herbert (6.2 per cent) and even Dawson (7.6 per cent).
In the state's urbanised south-east corner, seats such as Petrie (0.5 per cent) and Bonner (3.7 per cent) are prime candidates to change hands.
Labor has a clear strategy to target 11 seats in the Sunshine State and believes the Prime Minister has a "Queensland problem".
In New South Wales, the ALP is eyeing Dobell (0.3 per cent), Paterson (1.3 per cent) and Barton (5.4 per cent), which are all held by Liberals but have become notionally Labor seats following a redistribution of electoral boundaries.
Despite its small scale, Tasmania could offer Labor hopes of up to three seats in Bass (4 per cent), Braddon (2.6 per cent) and Lyons (1.2 per cent).
South Australian voters are expected to deliver Hindmarsh (1.9 per cent) back to Labor and Western Australia could see two more in Cowan (4 per cent) and Hasluck (5.9 per cent), with the newly created seat of Burt regarded as notionally Labor.
In the top end, the Coalition considers Solomon (1.4 per cent) vulnerable, with one senior source describing the outcome there as "anyone's guess".
And, while the Coalition's standing in Victoria has improved markedly since Mr Abbott was dumped as prime minister, Coalition strategists are pessimistic about the prospect of picking up Labor marginals including McEwen (0.2 per cent) and Bendigo (1.3 per cent).
One Coalition strategist said that the government's election agenda - which would emphasise sound, frugal economic management and the need to reform workplace laws - was taking shape behind the scenes and was more advanced than nervous backbenchers may realise.
" People have to hold their nerve and wait for the policies to be announced," the MP said.
A number of pre-selections are still be resolved across the country, including in key Liberal-held seats such as Mackellar in Sydney and Goldstein in Melbourne, but will be sorted in the next month or so.
At the same time, a deal on Senate voting reform between the government and the Greens, designed to reduce the "gaming" of preferences by micro parties and so to reduce the number of crossbenchers, is reportedly close.
Earlier this month, Mr Turnbull told the Coalition party room that an election in the second half of the year, between August and October was the most likely option but that a double dissolution remained a "live option".
Similarly, former deputy prime minister Warren Truss recently told a function that a double dissolution was needed to "sort out" the Senate.
The latest the government can call a double dissolution election is May 11, the day after the budget is handed down and it is not possible for polling day to be any later than July 16. The earliest a normal half-Senate election can be held is August 6.
Preparations to establish election campaign headquarters in Melbourne are already in full swing for both major parties.