The Australian Labor government nervously and narrowly held onto the electorate of Dunkley, in outer southeast Melbourne, in a by-election on Saturday triggered by the death of Labor’s former sitting member.

Both Labor and the opposition Liberal-National Coalition ludicrously claimed to draw comfort from the result. Labor was visibly relieved. It had feared losing the seat, reducing its parliamentary majority to just one. An anxious Liberal Party also hailed a rise in its vote after its defeat and the collapse of its affluent electoral base of support in the May 2022 federal election.

The results underscore the ongoing disintegration of support for the two main parties of rule and the political establishment as a whole, and the immense disconnect between them and the working class, including on the cost-of-living crisis. The burning issues of the Gaza genocide and the existential threat of a world war posed by the US-led turn to war against Russia and China were also deliberately buried throughout the campaign.

The campaign was marked by widespread disinterest in the ballot, disaffection with the political establishment and hostility directed toward both the government and the opposition.

Labor’s candidate, Jodie Belyea, received around 41 percent of the overall vote by depicting herself parochially as a “tough” fighter for the local area. This was slightly higher (0.9 percent) than Labor received in Dunkley at the 2022 federal election.

Yet, Labor’s vote fell sharply in the northern working-class areas of the electorate where people have suffered a devastating fall in living conditions since the Albanese Labor government scraped into office in May 2022. At the same time, Labor’s vote picked up markedly in the wealthier southern neighbourhoods.

On a “two-party preferred” basis, which compares the two major parties after other candidates’ ballot preferences are allocated, Labor had 52.7 percent against the Liberal Party candidate’s 47.3 percent. That was a “swing” against Labor of 3.6 percent from the 2022 election.

This was about half what the Liberals needed to win the seat, enough to raise the prospect of Labor being reduced to an unstable minority government at the next federal election, which must be held before May next year.

The Liberal Party’s primary vote was 39.1 percent, 6.6 percent higher than two years’ ago. But that reflected the absence in the by-election, unlike in 2022, of candidates from two far-right formations—Pauline Hanson’s One Nation party and billionaire Clive Palmer’s United Australia organisation.

While picking up this far-right base, the Liberals failed miserably in their efforts to whip up broader anti-immigrant sentiment following the recent High Court-ordered release of detainees from indefinite immigration detention and the arrivals of several refugee boats. Liberal leader Peter Dutton’s deputy Sussan Ley had declared that if people in the electorate had “a problem with Victorian women being assaulted by foreign criminals” they should “vote against Labor.”

That scare campaign was fuelled by a far-right outfit, Advance, which spent a reported $300,000 spouting similar themes. As well as its social media propaganda, Advance bought a full-page ad in the Herald Sun newspaper that warned “rapists, paedophiles and murderers” had been let loose in the community.

The election was also a disaster for the Greens, the third party of the capitalist rule. Their vote plummeted to 6.4 percent, 4 percentage points lower than 2022.

In a bid to justify the result, the Greens said it reflected their decision to devote few resources to the by-election because outer suburban areas like Dunkley are not their priority. That underlines the Greens’ orientation to more affluent inner-city electorates, as well as their perspective of forming a coalition or de facto coalition government with a minority Labor government after the next federal election.

An editorial today in the Murdoch media’s Australian newspaper pointed to the concerns in the ruling class. “Extrapolating an anti-Labor swing of this size across the board at a general election would force the Prime Minister into minority government with the Greens, the teals or other independents. The potential for chaos would be profound.”

Prime Minister Anthony Albanese took office in 2022 after Labor won a national primary vote of less than 33 percent. That was Labor’s lowest vote in nearly a century, despite the implosion of support for the widely-hated Coalition government which had ruled since 2013.

For the past 22 months, backed by the trade union leaders, Labor has presided over falling living standards for working people, with the cost of living escalating substantially higher than wages. It has intensified the attacks of the previous Morrison Coalition government on every front, including by letting loose the COVID pandemic and ratcheting up the AUKUS military alliance with the US and UK to prepare for war against China.

During the campaign, Albanese relentlessly promoted the government’s rejigging of the “Stage 3” income tax cuts for which Labor had voted under Morrison. Far from alleviating the impact of soaring mortgage payments, rents and prices for electricity, groceries and other essential items, the tax cuts amount to a pittance for most workers—about $2 a day for those on $40,000 a year. The vast majority of the tax cuts still goes to the wealthier layers taking home more than $200,000 a year.

In the northern, more working-class suburbs of the Dunkley electorate, households are under extraordinary pressures. In Carrum Downs, more than 80 percent of mortgage holders and 75 percent of renters experience “negative cash flow,” defined as their total weekly expenses exceeding their total weekly earnings. Thousands of people, in other words, are every day becoming poorer and going further into debt.

Labor’s vote declined in these areas. While results at different booths varied, in Carrum Downs South, Labor’s primary vote was down 6.2 percent since 2022, while at the central Carrum Downs booth it was down 5.3 percent.

By contrast, in some wealthier southern areas, Labor’s vote rose. At the Mount Eliza West booth, Labor’s primary vote was up 6.2 percent, in both Mount Eliza and Mount Eliza South it was up 3.6 percent and in Mount Eliza Central it was 3.9 percent higher.

The Labor government has given its full support to Israel and its ongoing Gaza genocide. Albanese has further integrated the Australian military and intelligence agencies within US forces, including in the Red Sea.

Neither this genocide nor the AUKUS pact and associated massive nuclear submarines deal targeting China were mentioned by the major parties in the Dunkley campaign.

The pseudo-left organisation Victorian Socialists sought to divert the hostility to the government over the Gaza massacres by pushing the bankrupt line that a vote for its candidate would “send a message” to the government to “take a stand against war and use its diplomatic power to push for justice for the Palestinians and a lasting peace.”

That pitch, which received 1.7 percent of the vote, was aimed at disarming the anti-war movement, which has seen millions of people protesting worldwide, and channelling the opposition back behind the same Labor Party that is completely committed to backing Israel and US militarism. Such fake “left” campaigns seek to block the development of the revolutionary socialist perspective that is required to end imperialism and war.

Given the parliamentary instability, sections of the Australian ruling elite are becoming increasingly frustrated, demanding even harsher measures against the working class, to further slash spending on social services to make way for rising military outlays.

On Saturday, the morning of the Dunkley by-election, the Australian newspaper issued an editorial complaining that the government was not doing more to slash spending on disability services and to boost corporate profits through so-called productivity measures. The editorial denounced the government’s tax package tweak as “designed to play to the mob” and a “crude appeal to the masses at the expense of structural reform.”

This vilification of the population (“the mob,” “the masses”) is a warning of preparations for more authoritarian and repressive forms of rule as the political system implodes.