Opinion
Whatever his achievements as PM, another rate rise would just about bury Albanese
Niki Savva
Award-winning political commentator and authorAfter the May consumer price index figure released in June showed inflation had nudged up, a senior member of the Albanese government confessed: “A shiver went up our collective spines … it is very worrying.”
In the space of a few days around that time, the government had delivered a tax cut for every Australian taxpayer, provided energy bill relief for every household, increased paid parental leave, restricted the sale of vapes, secured the freedom of Julian Assange, and continued to stabilise relations with China while securing partnerships in the Pacific, particularly with Papua New Guinea and the Solomon Islands.
Illustration: Dionne Gain
All of that counted for nought, wiped out by another round of speculation that the Reserve Bank would have to increase interest rates.
Since then, thanks to ongoing anxiety about the cost of living and Dutton’s clumsy dance of the seven veils on nuclear power – a performance that would have seen a seasoned performer booed off the stage, but which became weirdly transfixing – followed quickly by Fatima Payman, Donald Trump and then Kamala Harris, the government has not had a single perfect day to sell its message about how much it is doing to try to help. Not that people will believe it if they don’t feel it.
Wednesday’s inflation figure, bang on the Reserve Bank estimate of 3.8 per cent for the June quarter and thereby leaving no reason to increase rates, did not have the same chilling effect on the government but it is still seen as a brief respite rather than a reprieve.
Another rate rise would gravely damage the government. It would almost certainly tip the economy into recession, making political recovery in time for the election extremely difficult.
Albanese has to decide whether to go later this year, call it in late January for March or hang out until May. He also has to evaluate the many potentially negative repercussions from a Trump loss or victory in November.
Albanese has been busily road testing his themes for the election. So has Dutton, by simultaneously sharpening and softening his attacks.
According to Dutton, everything, including, presumably, if the Olympic medal tally falls short of expectations, is Albanese’s fault. Union corruption has forced up housing prices. Cost of living problems have been worsened by the government either doing too much or not enough. Higher interest rates off the back of still high inflation are the government’s fault for spending too much, except on tax cuts which still should have gone to higher income earners. Crime has increased because the government has deported few criminals or allowed too many into the country.
Dutton continues to use migrants as a weapon, holding them almost as responsible as Albanese for whatever has gone wrong. He told the Victorian Liberal Party last weekend, “…we bring in a new migrant every minute and overwhelm our housing market, infrastructure and services”.
He has cut through. Maybe a bit too much.
Whereas once he would combine accusations with full frontal personal assaults on Albanese, Dutton now prefers a different formulation, unfortunately undermined somewhat by Barnaby Joyce’s unwise bullet analogy, which seemed oblivious to the escalation in threats to MPs and their families and the attempted assassination of Trump.
Joyce did manage to fix one minor problem he thought he had. Soon after he gave up the grog, he told people he was worried it would make him boring.
Anyway, back to Dutton.
“It’s obvious to all Australians now, the prime minister may not be a bad person, but he’s a shocking prime minister and he can’t make decisions that, ultimately, are in the best interests of our country,” he said last week.
Note the switch. Albanese is a good bloke, but hopeless. It hasn’t gone unnoticed inside the government. Albanese remains confident Australians will still see Dutton as negative or nasty.
Colleagues are less sanguine. “It makes him sound less of a prick,” one said.
There are also doubts about the likely success of Albanese’s strategy to assert he is the only one who can offer stable government after the election.
There are a couple of problems with this. Firstly, it implies there is no prospect of Dutton either winning or doing well enough to form a minority. A campaign built around that would undercut any attempts to amplify the risks of Dutton becoming prime minister.
Labor has to decide. Either Dutton is a threat, or he isn’t. The polls now suggest he is.
The other thing about stability is that it’s only a plus if voters believe it has delivered what they want or need. Clearly, right now, they do not. Albanese needs a more substantial agenda than that if he is to secure another term in government.
Albanese’s reshuffle was essential if poorly executed. There was no valid reason to move Clare O’Neil from Home Affairs, except to provide camouflage for the removal from Immigration of the hapless minister, Andrew Giles. Nevertheless, giving Immigration and Home affairs to Tony Burke and Housing to O’Neil should work to the government’s advantage. Not only should but must.
Both Burke and O’Neil work hard and communicate well. However, they need to fix the problems, not just find better ways to talk about them.
For instance, the government has allocated a whopping $32 billion for housing, plus a few billion more for rent assistance, yet not a single house has been built so far out of the Housing Australia Future Fund established last November.
No wonder the JWS Research True Issues survey taken days after the budget, showed Australians rated the government’s performance on housing second worst after cost of living. There is little confidence the next survey due later this month will show any improvement.
Niki Savva is a regular columnist and author of The Road to Ruin, Plots and Prayers and Bulldozed, the trilogy chronicling nine years of Coalition rule.
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