This week, the Reserve Bank of Australia played itself into the federal election campaign in a way we haven’t seen for 15 years. Whatever the impact of its 0.25 percentage point rate rise on Tuesday – the first in more than 10 years – it is certainly not a positive for the struggling Morrison government.
What we do know is that apart from capitalising on the Anthony Albanese stumble in week one, Scott Morrison has had a less than impressive campaign thus far. To win he needed to generate momentum as he did in 2019, but the early tightening in the polls has stalled and, as the campaign reached the halfway mark, the average lead to Labor two-party preferred has risen to 7.1 per cent across the five published opinion polls.
Labor’s decision to launch its campaign last weekend, timed to generate attention ahead of pre-poll voting next Monday, achieved much more. It galvanised the party faithful, still reeling after their shock loss in 2019. “Albo delivered everything we could ask of him,” was the view of one seasoned campaigner. He needed to, of course, after his memory lapse on the unemployment rate and the official interest rate raised anxiety levels into the stratosphere. Morrison was still using that stumble in his response to the RBA’s rate rise, claiming the Labor leader was incompetent.
After the previous week’s shock 5.1 per cent rise in the consumer price index, the scene was set this week for the Reserve Bank to finally get off the fence and begin addressing runaway inflation. Had the board not moved on rates, as the RBA’s former governor Bernie Fraser warned, the perception would be it was compromising its independence.
Every galah in every pet shop in Australia, to borrow from former treasurer turned prime minister Paul Keating, knew what was coming. It was economics 101. On Monday the prime minister was asked if an interest rate rise would hurt the Coalition’s chances at the polls. Without batting an eyelid, Morrison claimed the rate rise was about “what people pay on their mortgages”. He said that’s what he was concerned about, “it’s not about what it means for politics”.
In chiding the gathered journalists, he said: “I mean, sometimes you guys always see things through a totally political lens. I don’t.” Somewhat whimsically, he added: “And Australians don’t.”
Albanese was derisive: “Everything this guy does is political.” He reminded voters that when Morrison was quarantining in The Lodge he didn’t take his economic adviser or his national security adviser, “he took his photographer”.
In the final two weeks of the campaign this most political of prime ministers now has the job to turn what Labor calls the “full-blown cost-of-living crisis” that has occurred on his watch into a negative for his opponents. It will be a very hard task because whatever else the rate rise does to voter sentiment, it dramatically fed into Labor’s mantra that “everything is going up except your wages”.
This claim holds up despite the RBA explaining that the board’s decision to move rates – after guaranteeing they would not rise before 2024 – was based on anecdotal evidence of wages already rising. They may well be, but there is no way wages will rise at the same rate RBA governor Philip Lowe is forecasting for inflation this year. The shadow treasurer, Jim Chalmers, is on firm ground talking about the “triple whammy” of skyrocketing inflation, falling real wages and interest rate rises.
All Morrison really has left is to claim that however bad things are on his watch, they would be worse under Labor. In this he has undermined himself. Five months ago he assured Australians his better economic management was a guarantee of avoiding petrol and electricity price rises and interest rates going up. Liberal advertising has resorted to averages over nine years to support this boast. It is of course little consolation to working families struggling with cost-of-living pressures.
Morrison is pushing a contradiction, blaming the rate rise on forces he can’t control, such as the war in Ukraine pushing up energy prices or the supply disruptions internationally due to the pandemic, and yet saying only he can keep them lower. On the contrary, as the RBA points out, he is keeping them higher, and a major contributor to inflation is the billions of dollars thrown at the economy in the March budget.
A difference between this campaign and 2019’s is Morrison’s credibility deficit. Neither candidate for the nation’s top job is held in particularly high esteem if the opinion polls are any guide, but Albanese’s failure to capture the nation’s imagination hasn’t stopped a consolidation of Labor’s lead in the past two Newspoll surveys, no matter what Morrison has thrown at him.
Not to be underestimated is the contribution to federal Labor’s cause by the most popular premier in Australia, Western Australia’s Mark McGowan. At the Perth campaign launch he gave an unequivocal endorsement to Albanese, saying the Labor leader was resilient, authentic and “the real deal”.
In the context of this week, nothing was more pertinent than his assertion that “the Liberals and the Nationals can’t manage money”. McGowan used his government’s performance in the west to show the failure of the Liberals compared with Labor. Not only is the WA state economy the best performing in the country but, according to Deloitte Access Economics, “one of the best performing economies in the entire world”. WA’s success, he says, “funds the nation”. Albanese is hoping this burst of state chauvinism sees voters in the west send two or three extra Labor members to Canberra.
Morrison’s ability to make up ground in the final days of the campaign is being mightily hampered by what he calls the threat of a “cavalcade of independents”. Not one but six hitherto safe Liberal seats are under serious challenge from teal independents, so called because their largely Liberal “blue” connections are heavily tinged by their “green” concerns for climate change action and a federal integrity commission.
Morrison seems utterly incapable of addressing these concerns. He point blank rules out negotiating with any of them on these issues. In a rhetorical flourish on Radio 3AW he asked: “Why would we run a government based on policies that we don’t agree with?” He claimed their demands on emissions reduction would “destroy the economy” and their call for an integrity commission would amount to setting up a “kangaroo court” that is a “public autocracy” holding elected officials to account. Seriously. It is an astonishing view from the prime minister. Taken to its logical conclusion, it would abolish any independent agency set up to scrutinise government.
Treasurer Josh Frydenberg, whose seat is under threat from teal independent Monique Ryan, has distanced himself from Morrison. He’s in good company. Outgoing New South Wales Independent Commission Against Corruption commissioner Stephen Rushton describes the critics of ICAC, who include the prime minister, as “buffoons”. Frydenberg says he wouldn’t have chosen the words “kangaroo court”. Neither would NSW Liberal premier Dominic Perrottet, who publicly defended his state’s ICAC from Morrison’s uninformed and ill-tempered attacks.
The Liberals know they have a real fight on their hands. A poll by uComms for The Australia Institute found in the seat of Goldstein, for example, a remarkable swing to independent Zoe Daniel against incumbent Liberal Tim Wilson. Two-candidate preferred, she would win 62 to 38 per cent on respondent allocated preferences, or 57 to 43 per cent allocating preferences on an historical basis in independent seats at the 2019 election.
Even if this poll is overstating Daniel’s support, it is clear a real bandwagon is rolling in the seat, as it is in Kooyong, Mackellar and North Sydney. The on-the-ground support is amazing, with volunteer numbers in the hundreds. One Liberal MP says if he could get more than 100 volunteers, he would think he was on fire. On polling day and at pre-poll centres these volunteers handing out how-to-votes on every booth will maximise their candidate’s chances.
The Liberal incumbent in the WA seat of Curtin, Celia Hammond, is being challenged by Kate Chaney, niece of former Fraser government cabinet minister and deputy leader of the parliamentary Liberal Party Fred Chaney. In hard-hitting opinion pieces in The Age, The Sydney Morning Herald and The West Australian, he says he believes the party he served “has lost its way”. He believes party politics are incapable of reform from within and that change can come only from the outside, so he is urging support for his niece and other independents.
One party insider complained of just how hard this election is for the Liberals. “We are having to fight two campaigns,” he said. “One against Labor, the other against these teal independents.” The level of government concern is rising faster than inflation.
This article was first published in the print edition of The Saturday Paper on May 7, 2022 as "Every galah in every pet shop in Australia".
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