The cage fight that passes for political debate in the Australian parliament is drawing to an unedifying close for the year. The Dutton-led opposition has rushed to exploit every fear and panic, and heads to the summer break convinced it has the Albanese government ready to yield. The prime minister, however, has not yet hit the mat and is confident the noise generated by his opponents and the seasonal media pile-on is over-hyped.
Anthony Albanese has never lacked self-confidence, but within the ranks and beyond to the broader Labor Party there is a push for some reassessment. Out in the branches the Labor base is unhappy. MPs have brought to Canberra the message that their constituents are looking to the government to do more to relieve their financial squeeze.
Brian Mitchell, a backbencher from Tasmania and a member of a caucus economics committee, asked the treasurer at Tuesday’s party room to meet with the committee to discuss the cost-of-living crisis and the need for the government to expand its relief measures.
Mitchell, who clings to his seat of Lyons with a margin of less than 1 per cent, says the burden of fighting inflation is falling too heavily on the 30 per cent of the population who have mortgages. He says wealthier Australians, many of whom are actually benefiting from higher interest rates and contributing to inflation with their spending, are not pulling their weight.
The backbencher baulks at making suggestions on how these Australians could do more. Tighter tax concessions or even a fairer income tax system were left dangling. Mitchell told The Saturday Paper: “That’s up to the treasurer and better economic brains than mine.”
Mitchell says corporations such as Coles and Woolworths, which are making record profits, are doing so by hiking their prices – a direct input into inflation hitting struggling families and borrowers. On that, there is some accord with the Greens. Party leader Adam Bandt is signalling he will ramp up pressure on the government next year to address the disparity.
While MPs did not question Albanese on the government’s economic settings at the party room gathering, in his pep talk the prime minister said, “caucus should be proud of the government implementing election commitments that are making a real difference to the lives of Australians particularly on cost-of-living pressures”.
It is precisely on this point that another Labor MP, Jerome Laxale, who is similarly on an ultra-thin margin of one point in his Sydney seat of Bennelong, is urging a review of the application of these policies.
Laxale says they have been tightly targeted and welcomed by many people but “we need to start looking at expanding eligibility of those programs – cheaper medicines, fee-free TAFE and electricity rebates – to a larger cohort of people”. He says by doing so the government would also be helping to contain inflation because treasury analysis has shown these measures had already had a quarter of a per cent deflationary impact.
Laxale told The Saturday Paper he was speaking out for his constituents and ensuring their concerns were firmly on the treasurer’s radar. He says cost of living is hitting in middle-income areas and he is encouraging the government to look at it in the run-up to the next budget.
The treasurer, Jim Chalmers, says he won’t be making major announcements or treating the midyear economic and fiscal outlook (MYEFO) as a mini-budget with new relief measures. He will take the customary opportunity to update key forecasts. Next year’s budget, however, will play a critical part in the Albanese government’s re-election strategy.
Laxale recognises his suggestions would have an impact on the budget’s bottom line. But while Albanese and Chalmers are both keen to have another surplus or near surplus, he says it is for them to juggle these competing demands.
Speaking earlier to The Australian, the Bennelong MP said he was open to the stage three tax cuts being tweaked or dropped. “We will have to look at the needs of the electorate next year and see where the economy is at by then and see where we land,” he said.
In parliament, the shadow treasurer, Angus Taylor, picked up on these comments, asking Albanese if he would rule out breaking his election promise to deliver stage three tax cuts in full. He didn’t. “We haven’t changed our position on stage three tax cuts at all,” the prime minister said. This is a consistent line that holds until the government alters its position. There is plenty pressure on it to do so, which will grow if Michele Bullock, the new governor of the Reserve Bank, keeps ratcheting up interest rates.
Bullock incensed Mitchell with her recent speech to other central bankers in Hong Kong. She acknowledged Australians were “very unhappy” with their central bank after 13 rate rises in 18 months. Despite the noise, she said, Australian households and businesses “are actually in a pretty good position. Their balance sheets are pretty good”.
Mitchell was not alone in thinking the governor was “tin eared” to the plight of many. Former treasurer Wayne Swan used the same words. Bullock’s Hong Kong speech followed on from her view that inflation was now more “homegrown”, with Australians paying more for their haircuts and dental work.
The treasurer will be hoping Bullock is impressed by the October monthly inflation figure of 4.9 per cent, which is down from 5.6 per cent in September. Chalmers says it’s a substantial moderation and better than the market expected.
Economist Stephen Koukoulas says the result comes before Bullock’s November rate hike and she is in danger of crushing the economy if she keeps going. He says “inflation is in freefall: from 8.4 per cent to 4.9 per cent in 10 months”.
After crunching the monthly numbers – something the RBA doesn’t do – Koukoulas came up with an optimistic scenario. He says inflation was “minus 0.3 per cent in October and is set to fall to 3 per cent by year end, especially as petrol prices feed into the data and some large increases from late 2022 are set to drop out of the running rate”.
Koukoulas says the RBA is “looking very, very silly”. The figures he has produced are within the bank’s target range. The treasurer is more cautious but this analysis would be an answer to all his prayers. As the cost-of-living crisis eases, less-grumpy voters may be more inclined to think kindly of the government than they are at present.
The latest batch of opinion polls, especially Monday’s Newspoll, helped darken the mood in the Labor camp and cheer its opponents. Although the two-party preferred 50-50 split would not deliver government to Peter Dutton, it would push Labor into minority. The swing against the party in the poll, if it were uniform, would probably see five seats fall to the Liberals.
There are also 18 independent and Greens seats between Dutton and the Lodge. He needs at least 21 to gain the treasury benches in his own right. What would be giving him heart is the collapse in approval for the way Albanese is performing. Tabbed in all the polls, it was particularly significant in Newspoll, where for the second month running the prime minister has a higher dissatisfaction rating than Dutton. There is a dead heat with both leaders on a net satisfaction rating of minus 13. Of course, more than a year out from the next federal election, this poll and the others are not predictive of the result. They are more market research on how the parties are travelling. A senior Labor strategist says it is normal in the second year of a parliamentary term for voters to assess the government, but “it is not until the third year, closer to the election, that they begin weighing up the choice before them”.
The Greens and the independents saw a rise in their support in the polls. A seasoned Greens campaigner says an unpopular Labor leader augurs well for the party in the metropolitan seats where there is already a tight contest.
Newspoll was in the field as the ugly political furore blew up over the High Court’s striking down of indefinite immigration detention. The Greens and most of the cross bench were highly critical of the government and opposition for racing to the bottom over how tough they could be on border security. The opposition did not baulk at smearing all detainees as “hardcore” criminals.
The pointscoring was more unedifying after the High Court handed down its reasons on Tuesday, sparking a new scramble for urgent legislation. The Greens’ Nick McKim called for a calm response. “The parliament as a whole need to stop panicking, reflect on these reasons in detail, and reject the base politics of fear and division,” he said.
It was the sort of call that saw thousands of voters turn to independents promising more respect in the exercise of politics and more seriousness in the contest of ideas. It is certainly how Labor’s Senator Patrick Dodson practised the art when he came to the Senate in 2016.
Now 75 and battling cancer, he will retire on January 26. Often dubbed the “father of reconciliation”, he always sought to advance unity rather than division, something that was recognised across the parliament.
In caucus, Albanese said: “Senator Dodson has brought honour, decency and respect to everything he has done as a senator.” There were tears and a prolonged standing ovation from his colleagues.
Australians, I am sure, would join the applause if there was more respect and less cage fighting in our parliament more generally.
This article was first published in the print edition of The Saturday Paper on December 2, 2023 as "Win at all costs of living".
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