In the back of the Imperial Hotel on glitzy Chapel Street in South Yarra, in the “Red Room”, candidates vying for the blue-ribbon seat of Higgins met for their first debate before members of the gay business organisation GLOBE, where there were more questions about asylum seekers than marriage equality.

The Red Room — named because, well, it is red —  looks like something out of Twin Peaks. It was standing room only — as there were few chairs — in the small room for the 50 or so members who gathered to watch the five candidates on stage, or on what host Joy 94.9’s Dean Beck described as “gallows”, face questions from asylum seekers to business investment, negative gearing and LGBTI rights.

As the attendees headed in, we were handed flyers by the Asylum Seeker Resource Centre. The crowd was a broad mix of people from gay lobby groups, businesses in the area, party supporters, and even one IPA representative, fresh from defending Roz Ward’s right to free speech.

Assistant Treasurer Kelly O’Dwyer should not have much reason to worry about her seat. The electorate of Higgins has always been in Liberal hands, but the Greens are pouring resources into the contest after the party won the state seat of Prahran in 2014 off the back of preferences. A good portion of Melbourne’s LGBTI community resides in Higgins, and O’Dwyer’s appearance at the event last night is a key indicator that she is serious about securing their vote. Both Labor, with Carl Katter (yes, half-brother of Bob), and the Greens, with Jason Ball, are also taking the seat seriously, putting up gay candidates in the seat.

Last-minute additions to the debate were the Nick Xenophon Team candidate Nancy Bassett, and Australian Equality Party candidate Rebecca O’Brien.

The questions were chosen from those submitted before the event, and it was clear early on that asylum seekers would be the most popular topic discussed.

O’Dwyer stuck to the party’s long-standing policy. “We don’t want to see people being encouraged to come here by people smugglers, we’ve made that very, very clear,” O’Dwyer said, adding that the government had removed children from detention.

Katter said Labor’s policy was “a good middle ground”, more compassionate than the Coalition’s, but one that still maintained regional processing of aslyum seekers. “We need to remember 1200 people died while people were getting on boats,” he said, adding that the centres should be opened up to scrutiny from doctors and lawyers.

When O’Dwyer was asked whether media access would be opened up to the detention centres, the minister said that the current government policy “is one we believe is working”.

“It’s not one that is working for those who are being abused in these detention centres, mentally [and] physically,” Beck responded.

“I don’t think it is actually as secret as you might think,” O’Dwyer said, stating medical professionals were able to access the centres — despite the Border Force Act preventing them from talking about it.

“They haven’t stopped the boats, they’ve just stopped us knowing about it,” Ball said.

Unsurprisingly for a business group, there were also questions on negative gearing and small business, playing well into O’Dwyer’s wheelhouse.

“I’d like to know what each of you are doing to assist business to thrive not only in Higgins, and not only for gay people, but Australia in general,” one attendee asked.

Katter said Labor would give small business a tax cut, because as small business was the largest employer of Australians, by helping small businesses, Labor would help workers. Bassett said Xenophon was a strong advocate for small business. Ball said that the biggest challenge for business was transitioning to renewable energy in Australia.

“We need to embrace the technologies of the future which are powered by clean energy, which will create jobs, which will create opportunities for our country.”

O’Brien said Australian Equality Party was “absolutely pro-small business”, and was focused on ensuring equality for LGBTI people.

O’Dwyer talked up the company tax cut for businesses with annual turnover of less than $10 million, versus Labor’s policy of the tax cut only for businesses with $2 million in annual turnover.

It was followed by another question in Liberal heartland: “Like many people in the audience tonight, and in the LGBTI community, I have investment properties, and negative gearing is important to me. What’s your personal position [and] your party’s position to negative gearing … and how do you think property prices will be affected?”

All candidates maintained their positions: Labor wants negative gearing only for new properties. Liberals aren’t changing negative gearing. Greens want it abolished. NXT will keep negative gearing. Equality Party supports abolishing negative gearing.

Then it turned to what the parties would do for the LGBTI community and the Safe Schools program. O’Dwyer struggled to name many things except saying Attorney-General George Brandis was getting the states to remove discriminatory laws, and claimed that Labor would abolish the Human Rights Commission’s LGBTI commissioner role — previously part of “Freedom Boy” Tim Wilson’s role. Labor has, on the other hand, actually promised to have a dedicated LGBTI commissioner.

Bassett was honest about the NXT’s chances: “The Nick Xenophon Team has no plan to form government, so we don’t have any budget regarding funding for the LGBTI support services, but we will always support the best policy that is put forward.”

Ball mentioned the Greens’ controversial policy to remove religious exemption clauses from anti-discrimination legislation. Labor shadow attorney-general Mark Dreyfus has said that Labor had no plans to remove the exemptions, but Katter said he would personally advocate in Labor caucus to remove the exemptions. O’Dwyer said that “people hold very sincere views, and they hold those views based on religious beliefs” and she did not support removing the exemptions.

When talk turned back to legal support for asylum seekers, Beck interrupted O’Dwyer talking about the money provided to support asylum seekers in Australia.

“You spend more keeping them offshore,” he said. “As the MC, I’m allowed to interject.”

“You only interject on me, Dean,” O’Dwyer replied.

When O’Dwyer went on to talk about services provided to asylum seekers in Australia, Beck cut her off saying she didn’t answer the question.

The final question, the elephant in the Red Room, was marriage equality. Unsurprisingly all candidates at the event were in favour of marriage equality, and O’Dwyer admitted she wasn’t successful in convincing her Coalition colleagues not to go down the path of the $160 million plebiscite after the election.

“I do expect that having people own the decision to change the Marriage Act is not a bad thing, as long as we have a respectful debate, which I think we can.”

Ball said Australian Christian Lobby managing director Lyle Shelton’s comments this week making comparisons to the Nazis showed a respectful debate was unlikely.

“The Australian Christian Lobby is one of the frontrunners who will get public funding for a ‘no’ campaign for the basic rights and dignities of the LGBTI community if Malcolm Turnbull, Kelly O’Dwyer, and the plebiscite get to go ahead,” Ball said.

“This is just a delaying tactic, and it’s just a tactic that is going to cost our economy and our government close to half a billion dollars,” Katter said. “If we are in this deficit disaster and we need to manage things, what an absolute waste of money.”

This week, O’Dwyer has faced criticism from her own side, namely from Tony Abbott’s former chief of staff Peta Credlin on Sky News for not defending the government’s proposed superannuation changes: “Kelly O’Dwyer is completely absent from the campaign. I haven’t seen her out there articulating the government’s case,” Credlin told Sky.

O’Dwyer told the audience that the hardest part of the campaign so far had been trying to balance being in her electorate and her ministerial responsibilities. O’Dwyer had to dash as soon as the event ended to get on a plane to Sydney to give a speech at the Tax Institute at 7.30am today.

Katter said he had been asked a few times why he was running in a non-marginal seat (O’Dwyer won the seat with 59.9% of the vote after preferences).

“I think it’s a rather funny question. I’m running to promote Labor values. I’ve never run in a seat before, and I need to prove myself and make a difference.”

Ball said it was about making sure his team of volunteers, and he, weren’t overworking themselves during the campaign.

“Ensuring they’re being looked after, as well as looking after myself, and making sure I’ve also got time off,” he said.

“Take plenty of time off!” O’Dwyer joked.