As the One Nation vote surges, conventional discourse has focused on the implosion of the Liberal Party and the split in the Coalition. But the mainstream chatter is missing a far deeper, more fundamental hollowing out of Australia’s political system, and it should be a wakeup call for the Greens.

This hollowing out – defined by declining membership of civil society organisations like trade unions – underpins the growing distrust and hostility toward establishment politics, creating fertile ground for parties like One Nation.

As the cost of living and housing crises worsen, restricting immigration – as proposed by One Nation – has emerged as a popular policy among a portion of the population who no longer believe broader structural change to the economy, like significant wealth redistribution, is possible.

One Nation is taking advantage of a void – left not just by the declining establishment political parties and mass civil society organisations, but also by the Greens. The Greens have been unable to offer a popular critique of the political system and articulate an economic narrative and platform that counters the one offered by the far-right.

A political collapse years in the making

The late Irish political scientist Peter Mair described in his 2013 book – Ruling the Void: The Hollowing of Western Democracy – the collapse of civil society’s formal organisational connection to politics at a mass scale. It drew on data around declining membership of political parties and civil society institutions like trade unions as a primary example. Mair argued this collapse manifested into voter volatility, a fall in establishment party votes and general voter apathy.

This is exactly the process that has occurred in Australia. The recent federal election saw the two major parties record the lowest share of the vote since World War II. According to the Australian National University’s election study, the share of lifelong Labor and Liberal voters has gradually fallen from 68% in 1967 to just 24% in 2025.

This is underpinned by a massive decline in membership of civil society institutions that once gave the major parties social weight. For instance, trade union membership has collapsed from 51% in 1976 to 13% today.

The experience of that membership matters as well. In the seven years between 1985 and 1992, 6.7 million Australian workers (79% of the 1992 workforce) participated in industrial action. But over the last seven years, just 550,000 workers (4% of the 2025 workforce) have participated in a strike.

Now Australians experience politics as powerless individuals, often mediated through screens, rather than as something susceptible to collective influence in the workplace, community or ballot box.

From Labor v Liberal to an establishment duopoly

Not only are both Labor and the Liberals completely detached from the public, but neither party offers any meaningful difference in policy. Instead, both act as mere administrators of a national economy hopelessly exposed to international markets and dominated by unelected state institutions.

As I have written previously, both parties ultimately represent the interests of the state and the corporate establishment – even if there are minor differences in how those interests are served.

Labor and the Liberals vainly attempt to compensate for this shrinking policy differentiation with heightened political rhetoric and distracting culture wars. But just 32% of respondents to the ANU study said there was a “good deal of difference” between the parties.

Overlap of financial stress and extreme politics

If these structural shifts are the fuel, then the match is the sharp decline in living standards. Real wages are below 2011 levels. As household finances worsen, a passive disconnect from politics becomes a more proactive desire to break with politics as usual.

That has been constant for some time. In 2019, the Scanlon Foundation’s ‘Mapping Social Cohesion’ survey found that 65% of people who indicated they were ‘struggling to pay the bills’ or ‘poor’, said that the political system needs ‘major change’ or ‘should be replaced’.

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Among One Nation voters today, 75% think the political system is completely broken. Unsurprisingly, One Nation voters are consistently found to report some of the highest rates of financial stress. In a November poll, One Nation outpolled everyone else among Gen X and Baby Boomers experiencing a great deal of financial stress. Alarmingly for the Greens, One Nation is also outpolling them among Millennials in this key demographic – 18% to 16% respectively.

This is why the Greens’ pivot in the last federal election towards a strategy to “keep Dutton out, and get Labor to act” was such a mistake. Rather than offering a hopeful break with the status quo in the middle of a historic housing and cost of living crisis, a vote for the Greens became a vote for a Labor government and a deeply unpopular political establishment.

In the end, the underlying political message of the Greens’ “keep Dutton out” was that change comes through Labor.

One Nation’s shallow support

What One Nation offers is a break with the status quo; a rejection of the political establishment. When Pauline Hanson is kicked out of the Senate, people see someone loathed by a political class that has treated them like shit.

This is not people ‘voting against their own interests’. Per this analysis by political theorists Jeremy Gilbert and Alex Williams, people conceive of their interests on two axes. The first is how policies will materially affect their lives. But the second, crucially, is temporal: how long it would take to implement these policies, and whether it would even be possible. Seventy-two percent of the country may believe that big business has too much power, but given that the vast majority of people have never experienced any sense of collective power, it’s reasonable that most don’t believe we can do much about it.

Rising concern around immigration is in part an expression of demoralisation about the possibility of meaningful change. At the very least, people can cast their vote against the status quo, and for some perceived short-term benefit of restricting immigration. After all, borders are one of the few sovereign powers that states haven’t handed over to finance capital or unelected institutions.

The good news is that support for One Nation is shallow, because it is not based on meaningful organisation in civil society. Meanwhile, both major parties are unstable political formations, no longer connected to an organised social class, relying on polling and focus groups to corral an atomised civil society into ever shrinking voting blocs.

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Can the Greens fill the void?

For the Greens, filling the void left by a hollowed out political system will require a major strategic pivot in the organisational and political orientation of the party.

The Greens need to stop conceiving of change as something that is negotiated in parliament with Labor. People already disconnected from politics will never believe anything good can come through backroom deals with the political establishment.

And they’re right. Labor and the Liberals are part of the same political establishment, tied to the same corporate and billionaire donors. As long as either is in charge, nothing is going to meaningfully change for the better.

As leader of the UK Greens, Zack Polanski, said of UK Labour, “we are not here to be disappointed by you … we are here to replace you”. The UK Greens are now on the verge of overtaking Labour in the polls.

Ultimately, there is an emerging contest over what replaces decaying establishment parties and politics across western democracies. In simple terms, will it be a politics that taxes the ultra rich, nationalises essential services and puts wealth and power back in the hands of ordinary people; or will it be a politics that persecutes migrants and uses racist rhetoric to justify massive expansions in state violence, as we’re seeing with ICE in the United States and threatening in Australia with new anti-protest and anti-speech laws?

Critically, you deal yourself out of that contest if you aren’t prepared to build a movement that is entirely independent of the establishment you hope to replace.

If you have a story tip, drop an email to tips@deepcutnews.com or send an anonymous Signal to @deepcut.25.

This column is part of a new series, Rigged Economy. This section will provide critical analyses that explore the systemic causes of economic inequality in Australia.

The cost-of-living crisis is getting worse. Inflation is up 3.8%, driven by a 37% increase in electricity prices and 11% increase in childcare – all in one year. The obvious link here that mainstream pundits won’t point out is privatisation – governments selling off publicly-owned assets and services to for-profit corporations.

Rather than unpacking the structural causes of the crisis, most “economists” are simply warning of further interest rate hikes – which will heap more pain on struggling households.

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What should be on the agenda is nationalising essential services – bringing them back under public control and out of the hands of profit-hungry corporations. And we should start with electricity and childcare.

The current crisis has been decades in the making, and the massive wave of privatisation commenced by Labor in the 1990s – when the government sold off the Commonwealth Bank, Qantas, CSL and other publicly-owned assets – is a key part of the story.

Publicly-owned essential services, when we had them, maximised quality and affordability. Today, for-profit corporations maximise profit, drive up prices and cut back on quality. To understand its devastating impacts, look no further than electricity and childcare.

Electricity bills feeding profits

Last year, the Australia Institute found that the second largest private electricity retailer in Australia, AGL, was making $755 of profit per customer per year. Origin, Australia’s largest retailer, made $595 in profit per customer. In the same year, Origin’s electricity retail arm recorded a mammoth 172% increase in profit, while AGL recorded a 189% increase in profit. Here’s the kicker. For every $100 of your electricity bill, just $12 is actually the cost of generating electricity.

At every point in the electricity system for-profit corporations are taking a cut. The average profit per customer for electricity transmission and distribution networks (the polls and wires), also largely privatised, is $855 a year. Meanwhile, private generators regularly game the national electricity market to drive up wholesale prices.

How did this happen? In 1998, the Coalition government created the National Electricity Market – a framework to establish an artificial, private market for electricity. From there, state Labor and Liberal governments began a decades-long process of selling off electricity assets including the Victorian Liberal’s privatisation of retail, distribution and networks from 1995 to 1998, and Queensland Labor’s privatisation of electricity retail in 2006.

Even those networks and generators that remained in public hands were restructured and forced to act like for-profit corporations under rules introduced by Labor in the 1990s. From 2009 – when states began fully deregulating electricity prices – to today, electricity prices have increased at nearly three times the rate of inflation. Three times!

Since privatisation, sales staff employed in the electricity sector exploded by 396%, while the number of electricians, labourers and trades people in the electricity sector increased by only 21%. We are literally paying electricity companies to hire sales staff to advertise the exact same product back at us – which we all need anyway. Think about this next time you see advertising from an electricity company.

In this context, government electricity rebates, while better than nothing, function as a band-aid solution, allowing big corporations to carry on making massive profits.

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The childcare rort

Childcare was also privatised in the 1990s when the Labor government opened up childcare subsidies to for-profit providers. Prior to privatisation, experts described our childcare system as the envy of international experts. Now it’s the opposite.

Over the last decade alone, 95% of all new childcare centres have been for-profit, and as a result 75% of the long day care sector is now for-profit. US corporations and private equity, in particular, see Australian toddlers as a massive profit opportunity. That’s not a sentence that should fill anyone with confidence.

Every year the federal government pays out about $15bn of childcare subsidies. But in effect what the government is doing is not subsidising childcare – it is subsidising, with your tax dollars, a highly exploitative child profit industry. Let’s break it down.

Looking at three of the largest publicly traded private childcare corporations, the average profit per child was $6,094 last year. With roughly 605,000 kids in private childcare, that means last year alone private childcare corporations made roughly $3.8 billion in profit.

In addition, private childcare landlords made $2.7 billion in rent, simply for owning the land in which childcare centres operate, making rent the second biggest cost for childcare operators.

This means that in total, private corporations make a whopping $6.3 billion in profit from childcare in Australia every year, nearly half of the $15 billion in federal investment in childcare. In fact, every time the federal government increases public subsidies, for-profit childcare centres raise their fees and make bigger profits.

It doesn’t have to be like this

Privatisation sees corporations put profit ahead of everything, including safety. Reporting by the ABC into sexual abuse and assault of kids in childcare found that most of the abuse they uncovered occurred in for-profit centres, “where cost-cutting, high staff turnover, and routinely breached or gamed child-to-staff ratios leave supervision dangerously thin”.

Meanwhile, privatised electricity network company AusGrid was found to have cut the number of safety inspectors by more than half after a private consultancy firm found it was cheaper to cover the compensation costs of permanent disabilities caused by faults in the grid.

Privatisation demonstrates how Labor, the Coalition and the corporate sector have rigged the economy against us. But it doesn’t have to be this way.

We could absolutely have an affordable publicly-owned electricity system, run in the interests of the people, not corporate profit. And there’s no reason why we couldn’t have an entirely public, well-funded, high-quality and free childcare system.

Regaining public, democratic control over key services is crucial if we’re to truly address the cost-of-living crisis. But no neoliberal ‘economist’ offering ‘insights’ in a mainstream outlet will tell you that. The demands will have to come from us, the public, to take back control and put an end to the rort we’re all paying for.

Labor’s latest 5% house deposit scheme housing policy – expanding the Liberals’ Home Guarantee Scheme – is a policy for bank profit, not first home buyers. It will drive up house prices, push first home buyers into more debt and deny thousands of low-income renters the chance to buy a home.

The Home Guarantee Scheme allows first home buyers to get a mortgage with just a 5% deposit, without having to pay for mortgage lenders insurance.

The policy creates a new state-backed incentive for first home buyers to take out larger loans. According to modelling from Lateral Economics, 146,446 first home buyers – people who would otherwise have waited to save a larger deposit or relied on their parents for a loan – will instead use the Home Guarantee Scheme and take out 95% bank loans. The current median dwelling price in Australia is $857,280, so assuming a standard mortgage rate of 5.74% and a 5% deposit (rather than a 20% deposit), a first home buyer will pay an extra $141,268 in interest.

In total, first home buyers will pay banks an extra $24 billion in interest off the back of the first five years of the policy alone. As the big four banks control 68.6% of the first home buyer mortgage market, they will collect an extra $16.4 billion in interest thanks to this new government policy.

And it will also make affordability worse. The same modelling suggests the scheme could increase house prices by 10% in the first year, by encouraging first home buyers to pay more than they otherwise would have by taking out larger loans, and redirecting the cost of lenders mortgage insurance towards a higher house price. As a result, 9,125 renters will actually miss out on buying a home due to house price increases that will be triggered by the policy.

It should not come as a surprise that Labor is spending public money to intensify the financialisation of housing – a system designed to enrich banks. After all, Labor helped create this profit-driven model in the first place.

A system for bank profit

From the 1990s onwards, housing has been a key element in the accumulation of capital in Australia. This was caused by three key changes:

1. Labor’s massive deregulation of the Australia financial and banking system in the 1980s and 1990s, allowing banks to lend more money to property investors

2. Labor’s decision to cut federal funding for public housing in 1995

3. John Howard’s Liberals introducing the capital gains tax discount for property investors in 1999.

The best way to understand this fundamental transformation is through the banks and where they lend money. In 1990, over 60% of all bank lending went to businesses and just over 20% to housing, of which investor housing was a small fraction. By 1997, the total proportion of bank lending for housing loans doubled to over 40%, driven by an explosion in lending to investors, while loans to businesses dropped below 50%.

Today, 62% of all bank lending in Australia goes to housing and just 30% to business. That is the highest rate of any banking sector in the world, helping to make Australian banks the most profitable in the world. The consequence is that housing has become an incredibly lucrative financial asset, where the ultimate goal of the system becomes profit rather than providing affordable, well-designed homes as a right. This economic shift was fuelled by encouraging households to take on massive mortgage debts, to offset stagnant wages. As a result, Australia has the second-highest rates of household debt in the world.

In fact, last year alone the big four banks earned $44 billion in profit. That’s $1,619 each for all 27.2 million Australians. All up, Australians owe the big four banks $1.8 trillion in mortgage debt (that’s right, TRILLION). These same banks are the biggest and most profitable corporations in Australia, and Labor’s housing policy will make them even more profitable, at first home buyers’ expense.

The big four banks themselves are all owned by the same six multinational asset managers: BlackRock, Vanguard, HSBC, JP Morgan, StateStreet and CitiGroup, controlling on average 69% of the shares of each of the four banks. Which means Labor and the Liberals have created a housing system that forces millions of Australians to choose between crippling mortgage debt or insecure, expensive renting – just to line the pockets of mostly US-owned multinationals.

Tackling the housing crisis isn’t complicated

Ultimately, if we want a housing system that prioritises people, not profit, then we need to end the treatment of housing as a lucrative financial asset. To achieve that, we could:

• Scrap the federal tax handouts for property investors, negative gearing and the capital gains tax discount, and re-regulate the financial system to make it harder for banks to lend to property investors – in turn significantly reducing investor demand for housing

• Coordinate national caps on rents, not just to protect renters, but to further reduce investor demand for housing. Investors rarely build new homes. They mostly buy existing homes that otherwise could have been purchased by a renter. So the more you reduce investor demand, the fewer renters there are in the rental market

• Finally, start building public housing at scale. In Vienna, 60% of all housing is some form of rent-controlled social housing. Almost anyone in Vienna, regardless of their income, can access this housing, which means you get incredible social diversity and a financially viable housing system. But what you also get is beautifully designed, well-built medium density apartments, and a city with proper investment in public transport and public parks. Australia’s poorly designed and built apartments and urban sprawl ultimately come from a housing system designed for profit.

If you think something like the system in Vienna is not technically possible in Australia, it’s worth remembering that at the height of the Commonwealth State Housing Agreement in 1971, Australia was building 136 public homes for every 100,000 people in Australia. Today, that rate under the current Labor government is just 9.8 homes.

In 1995, had Labor not cut federal public housing funding and governments had instead built public housing at the same rate as we did in the 1970s, today we would have an extra 900,950 public homes. That would have increased Australia’s public housing stock by over 200%, eliminating the entire social housing waitlist.

Indeed, before Labor’s cuts in the 1990s, the federal government once included a standalone Department of Housing that employed thousands of architects, town planners, and builders.

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Ultimately the question is social and political power

Labor and the Liberals will never fix the housing crisis, because both parties exist today to protect and expand a capitalist system that puts corporate profit over public needs. And a key pillar of Australian capitalism is housing. Both ultimately function as the political wing of a set of industries – banking, property developers, construction and real estate – that profit enormously from this system.

Historically and globally, the sort of changes Australia needs have come from mass political and social movements based on the power of a conscious, organised working class – not simply online articles or Instagram and TikTok videos. The added challenge in Australia is that the leadership of many established trade unions are captured by those integrated into the Labor Party that itself is creature of the capitalist state.

That doesn’t mean all hope is lost. But it does mean we need to start building a movement capable of challenging the power of Labor, the Liberals, the capitalist state and the big corporations who profit off this system on the backs of our labour, and our taxes.

Wealth inequality has reached historic proportions. The banks are posting record profits in the midst of a housing crisis, and teachers are paying more tax than multinational gas corporations.

But attempts to explain why things are bad often boil down to surface-level arguments: that Labor is timid, adopts the wrong ideas, or, at worst, is influenced by corporate donations and lobbyists. What if the broader structures of Australian government and the economy can tell us something about what is going on?

Understanding the state – spanning government departments, parliament, security services, and ‘independent’ institutions like the Reserve Bank and Productivity Commission – is key to grasping why big corporations dominate Australia’s political system.

No such thing as an ‘independent’ state institution

For starters, the modern Australian state developed within a global capitalist system. That process fundamentally shaped it.

As a result, it relies on the growth and profitability of this capitalist system. This is not just in terms of taxation revenue generated from profits and wages; the operation of the state itself is embedded in capitalism. For instance, governments borrow money by selling bonds to private investors and corporations, with prices effectively set by financial markets.

State institutions will ultimately prioritise the maintenance and growth of capitalism. This is why, for instance, the RBA gave commercial banks an additional $100 billion by buying financial assets from the banks (called quantitative easing) during COVID, which in turn pushed up asset prices (including house prices) and gave the banks bigger profits. This also increased inequality because very rich people own more assets.

Political parties don’t ‘corrupt’ an independent state. Instead, over the last century, Labor has become integrated into the governing logic of Australia’s capitalist state.

This is why focusing on the corrupting influence of lobbyists and donations on Labor and the Liberals gets things backwards.

Lobbying is the symptom, not the cause of a dodgy system

The fact that Labor and Liberal politicians go on to work as corporate lobbyists is frequently pointed to as a cause of ‘corporate state capture’.

But Labor isn’t making decisions that favour the banks or mining companies because a few ex-colleagues had a few chats over a glass of expensive wine. Trust me, they’re not that convincing.

The banks don’t wield so much power because former Queensland Labor premier Anna Bligh is the CEO of the Australian Banking Association. Bligh is there because the banks already hold enormous power over the economy. Of the five most profitable corporations in Australia, the big banks are four of them, and the total value of these four corporations alone is equivalent to roughly 38% of Australia’s GDP.

Of course, lobbying and corporate donations do buy influence. Various corporations are fiercely competing for everything from government contracts to favourable tax and regulatory decisions. But it’s because of the nature of the state – and the nature of Labor and the Liberals as political parties – that such a lobbying industry exists at all.

In other words, lobbying exists precisely because the state is already wired to serve corporate power. Lobbying just becomes another process by which the state determines how to best serve corporate interests.

As Christopher Pyne, ex Coalition defence minister-turned-lobbyist for defence contractors, said: “Lobbyists are a critical part of the system of Westminster government … The system would be the poorer without lobbyists. Anyone who doesn’t understand that, doesn’t understand how government works.”

Neoliberalism and the Australian state

We’re often told that the neoliberal right wants smaller government and lower taxes, while the left wants a bigger state.

But neoliberalism is not about small government and lower taxes. As the British academic David Harvey says, it was, and still is, about establishing the political dominance of big corporations and billionaires by breaking the power of organised civil society resistance, in particular organised labour, and expanding private markets and logic into public and social life. And the instrument for achieving that in Australia is the state.

For instance, government spending as a proportion of GDP has actually stayed roughly level since the 1980s, even going up in the last decade of Coalition governments.

Why is this the case? Well there is enough historical data now to conclude, as French economist Thomas Piketty has, that the historic falls in wealth and income inequality that occurred post-World War II was the exception. The current soaring wealth inequality is in fact capitalism’s norm. So is the concentration of wealth and power in the hands of a small few, and the destructive nature of the profit motive for human wellbeing, the climate and environment. The current system is working as designed.

But managing these contradictions is expensive and difficult and liberal democracies requires governing parties to acquire some form of passive public consent for this system, by way of elections. Governments must soften the harsher blows of capitalism, win public consent and prevent capitalism collapsing under the weight of its own contradictions.

Take electricity: three separate federal agencies exist just to make the dumb idea of a privatised electricity market work. Or childcare: over 75% of the $14 billion of yearly federal subsidies go to for-profit childcare providers. Public money is still being spent on services, but in support of for-profit models that integrate the private market into every aspect of our lives, causing harm and costing us money.

The requirement for passive consent is also why major neoliberal reforms often occur under Labor governments – think the massive wave of privatisation (including childcare!), financial deregulation and restrictions on union rights that occurred under the Hawke and Keating governments.

Labor’s union ties and ‘progressive’ image allow it to convince enough working people that Labor has their best interests at heart, drawing social groups that may otherwise resist pro-corporate reforms into the logic of the capitalist state.

It’s time to start asking the right questions

So, if we want real change, we need to start asking the right questions. Like ‘how do we build a set of institutions and large civil society organisations capable of counteracting the power of the Australian state, Labor, Liberals and the vast network of corporate lobby groups, think tanks and mainstream media outlets that uphold the status quo?’

‘What would it mean to govern when the Australian state itself would resist meaningful change that favoured everyday people – especially if such change threatened corporate interests?’

They’re big questions. But if we’re serious about systemic change, we need to start answering them.