Paul Bongiorno
The word is ‘absolutely’

Scott Morrison is desperately looking to generate a last-minute momentum shift in this election, but Anthony Albanese believes it is already occurring around the kitchen tables of the nation.

The Labor leader’s cautious optimism can be summed up in his one-word answer at the end of his Tuesday news conference. He “absolutely” supports a wage rise of 5.1 per cent so that the lowest-paid workers in the country don’t fall further behind in their struggle with the cost of living.

We are talking about two million workers earning $20.33 an hour – and the hike would add another dollar to their pittance. We are not talking about rises to executive salaries many multiples higher, which somehow make no contribution to inflation or add to the cost of services or products their businesses produce. There is absurdity in Scott Morrison’s hysterical charge that Albanese is a dangerous economic vandal about to destroy the Australian economy.

Albanese is committing to “support” this pay rise in any submission to the independent Fair Work Commission, something Morrison refuses to do on the pretext it’s not his job. That logic is of a piece with “I don’t hold a hose, mate.”

Labor was delighted when the prime minister decided to go to war on the issue, which is central to how Australians can cope with the rising cost of living. Morrison claimed Albanese had nominated the number with no thought whatsoever to the consequences.

For Morrison, it was more evidence that the Labor leader “is not up to the job of prime minister”. For Albanese, it was more evidence that the prime minister was out of touch and not willing to show the leadership the nation needs.

Morrison conveniently ignored the considered opinions of the head of treasury, Steven Kennedy, and the Reserve Bank governor, Philip Lowe, who both say wage rises do not automatically lead to inflation. The key to avoid the link is for government intervention to encourage productivity. Lowe has been arguing for months that real wages should rise and unless they are outpacing productivity there is no case to be made that they are driving inflation.

The RBA’s revised forecasts mean Australian workers face two more miserable years as rates rise and wages fall. Morrison says there is “no magic pen” to make wages rise. Albanese counters that at least he is trying and there are government interventions that would help, such as a new legal definition of an employee and legislated improvements to wages and conditions for the millions of workers outside the award system.

Labor says it is government policy to keep wages low. This is based on the stated views of Morrison’s former Finance minister, Mathias Cormann, who said lower wages were “a deliberate feature of our economic architecture”. By any measure, this policy has been a success. It has seen historic wage stagnation over the past nine years. Productivity gains went overwhelmingly to profits and not to wages.

Albanese is on strong economic ground when he argues his support for a 5.1 per cent wage rise is a recalibration for wages. He denies he was setting a precedent for future wage cases. Economist Warren Hogan told The Australian the “great bulk” of businesses should be able to afford a “one-off reset in wages”. He said the Fair Work Commission has already played a “critical role” in preventing the emergence of an “underclass working poor”.

The shadow treasurer, Jim Chalmers, says the shock inflation number of 5.1 per cent and the beginning of a new interest rate cycle has landed the economic debate on the kitchen tables of the nation. There is some evidence of this in a uComms poll for The Australia Institute in the Melbourne seat of Higgins. It found Labor was trusted more than the Liberals to increase wages growth, by just over 10 points. Labor was also a nose ahead on being trusted to tackle the cost of living (41-39). The poll found the Liberals’ Katie Allen looked set to lose to Labor’s Michelle Ananda-Rajah (49-51).

Chalmers rejects Morrison’s claim that Albanese was talking off the top of his head. Labor has been speaking about the issue from the outset of the campaign. Chalmers says a wage rise less than the inflation rate, by definition, leaves people behind. The lowest paid are emblematic of the entire workforce in this argument. Even if wages are rising, as the RBA says, its own figures point to real wages continuing to fall.

Labor’s welcoming of Morrison’s assault on Albanese for wanting to address cost-of-living pressures with higher wages is easily understood in light of the latest Consumer Pulse survey by Choice. It found anxiety about the cost of food and groceries is at its highest level in seven years. Four in five households report concern and 90 per cent of Australians believe the price of daily essentials is rising faster than their capacity to pay for them.

Labor is counting on voters noticing the party is on their side when it comes to cost-of-living struggles. It is by far the major issue of the election. But according to those close to him, Morrison, who will launch his campaign on Sunday in Brisbane, thinks there is a soft element to the polls and he can move enough of it back his way for another “miracle” win.

However, he is in a much weaker position than 2019. Then he narrowed the gap in the polls average from six percentage points at the beginning of the campaign to three with two weeks remaining. In Newspoll it was on two – statistically lineball. This year the average lead to Labor at the beginning of the campaign was 7.8 percentage points; now it is 8.6 and appears to be pulling away. In Newspoll the Labor lead is eight points.

There is no doubt the RBA’s rate rise is a major factor here. The Liberals have made rising interest rates a benchmark for poor economic management since the 2004 election. They can hardly be surprised that voters feeling the pinch have taken them at their word and marked them down.

But Labor’s campaign spokesman, Jason Clare, poured cold water on any temptation to early jubilation. On Monday he urged people to ignore the polls and “treat them with suspicion”. “They were wrong last time,” he said. “I suspect they will be wrong this time as well.”

One senior Labor figure, who was burnt by the 2019 defeat, says “any seat poll giving us a 52-48 lead, we treat as lineball”. So the extensive seat rundown in The Australian is good for morale but hasn’t calmed nerves. That YouGov poll gives Labor 80 seats for a majority of five and government in its own right.

A report on 10 News First on Tuesday claimed the Liberals’ New South Wales division research showed support for the government collapsing in Reid, Robertson and John Howard’s old seat of Bennelong, with the Liberals also not on track to take Parramatta and Gilmore from Labor. But these polls are being treated with scepticism. The leaking smells like the old reverse psychology trick, trying to scare wavering Liberal voters back to the fold. When a government is this embattled, it rarely works.

Interstate Liberals are furious, singling out the unconscionable delay in preselecting candidates in some of these key seats as a major factor. They blame Scott Morrison and his factional ally Alex Hawke.

One Liberal source says polling in the seats being contested by the teal independents is diabolical in Sydney and Melbourne. Newspoll has the teal independents falling short everywhere except Kooyong and Goldstein in Victoria.

Scott Morrison dismisses any talk of his treasurer, Josh Frydenberg, losing the hitherto blue-ribbon seat of Kooyong. It is unthinkable for him, as was the idea Howard would lose Bennelong in 2007.

But just how Morrison thinks relitigating past elections can work for him is mystifying. He did just that at a tense news conference with NSW Premier Dominic Perrottet. The two publicly differed over the state’s anti-corruption commission.

Morrison’s crude attempt to compare what happened after Kevin Rudd was elected in 2007 and what would happen if Anthony Albanese was elected revealed a remarkable blind spot. Rudd, he said, crashed the budget and wasted money on school halls and roof insulation. Rudd’s so-called school halls scheme cost $850 million, with an audit finding $17 million of it could have been better allocated.

These numbers are nothing compared with the cumulative budget deficits Morrison has delivered, reaching $224.7 billion over four years and heading to gross debt of $1.2 trillion. And that’s not to mention the $40 billion paid out to businesses that pocketed JobKeeper payments they didn’t need after the treasurer forgot to formulate an integrity safeguard mechanism for the scheme.

It’s hard to believe an Albanese government couldn’t improve on that performance. If the polls are right, voters are ready to “Give Albo a go.” 

This article was first published in the print edition of The Saturday Paper on May 14, 2022 as "The word is ‘absolutely’".

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