As Australia’s economic challenges mount, the Albanese government is dodging political landmines all over the place
It’s little wonder so many in the Coalition weren’t too worried about losing last month’s federal election.
Some even joked they might now have time to play golf.
But there was more to it than just an urge for the occasional round of 18. Barely a week into governing, Labor’s frontbench is fast learning it’s not getting a honeymoon period.
If anything, this is as easy as it will get.
After almost a decade in the political wilderness, the tasks before Labor are mounting by the day. That’s before it gets to the agenda it’s been elected to deliver.
Making life even worse are a series of landmines — some even laid by Labor before the last election — that risk blowing up in the newly minted government’s face.
There was a pivotal moment in the campaign that some in Labor think won the election.
Anthony Albanese was under pressure over wages and found himself agreeing that the Fair Work Commission should lift the minimum wage by 5.1 per cent — to reflect the most recent inflation figure. No worker should go backwards, he argued.
The Coalition seized on the moment and said setting a figure was an overreach. But it soon found itself looking like it was against Australians getting a pay rise. Labor wanted a fight on wages and the then government had given it one on a silver platter.
Labor won the election and, even before all the votes were counted, stormed into office vowing to be working from day one.
Among the first things it did was make a submission to the Fair Work Commission on the minimum wage. What came next was a classic case of wanting your political cake and eating it too.
An economy — and government — under pressure
“Economic conditions are particularly challenging given inflation is at a 21-year high of 5.1 per cent and is expected to increase further in the near-term due to persistent and compounding supply shocks,” the government wrote in its submission.
“In considering its decision on wages for this year, the Government recommends that the Fair Work Commission ensures real wages of Australia’s low-paid workers do not go backwards,” it added. In the submission document the back half of the sentence was in bold; an effort by the government to nail its message.
Labor knows it can’t outright ask for a 5.1 per-cent increase in the minimum wage.
It’s not just because it fears setting a precedent, though Employment and Workplace Relations Minister Tony Burke has sought to pre-empt attacks like that.
“You don’t start … with putting a fixed number on things in the submissions, as a rule,” he told the ABC this week.
“But the cost of living crisis is so acute for people on lower wages that that’s why we felt the need to put in that straight principle that those workers should not be going backwards.”
The trouble is, inflation could be much worse than 5.1 per cent by the time the new minimum wage takes force.
Treasurer Jim Chalmers all but predicted that when he spoke after the Reserve Bank of Australia raised the cash rate by 0.5 per cent — its biggest single jump in decades.
“It is the universal expectation across economists, the government and the Reserve Bank that this inflation challenge will get harder before it gets easier,” Mr Chalmers said.
Labor might have positioned itself as being for higher wages during the campaign and now it’s in government. But if inflation continues to climb as expected, it will face greater pressure to do more to help those struggling to make ends meet.
Another trap to be managed: soaring petrol prices
Albanese will be asked to guarantee further rises in inflation too will be met with higher wages. It’s a commitment he won’t want to make but that won’t stop the question being asked.
Chalmers used the RBA rate rise to repeatedly say the government would offer more cost of living measures in its October budget.
It’s a reminder that wages are only one lever the government can pull to take the pressure off.
But this leaves Australians facing four months of getting by with what they have now, in a world where everything feels like it’s getting more expensive by the day.
You need only drive past a petrol station to see that. And here too lies another trap set before the election that the government now needs to manage.
Labor backed the Coalition’s halving of the fuel excise in the March budget. Both sides in the lead up to the election insisted it was a six-month measure and the full tax would be reapplied to the prices in September, when they hoped prices would be cheaper.
Three months since that decision, prices are back above $2 a litre, showing few signs of cooling any time soon.
You can imagine how popular Chalmers will be if he decides to reimpose the extra 22 cents per litre. The blowback from households will be one thing; imagine how businesses already struggling with soaring gas prices will respond.
The thing about fuel prices is that you can’t miss them. Even when you’re not buying petrol, the price is literally up in lights, reminding you just how expensive life is.
It’s little wonder it took 13 years to reverse the last “temporary” change made to fuel excise in 2001.
Be careful what you wish for…
Economists say cutting the fuel excise went some way to helping ease inflation. Reimposing it, you’d expect, would just inflame it. Most economists were against cutting the tax, even temporarily, given it strips billions from a budget already drowning in deficits.
It leaves Labor in the difficult position of saying it’s “for budget repair” while extending a policy that blows a hole in revenue.
Critics accused Labor of having a light agenda ahead of the election. The party gets particularly irritated at suggestions it played a small target strategy to win.
Global conditions have given Labor a bigger agenda — and headache — than it expected. War in Ukraine is grinding on, China is becoming ever more assertive in the Pacific and supply chains are struggling under unprecedented demand.
Then there’s the integrity commission it has promised for this year, and its pledge to legislate emissions reductions targets.
It’s little wonder Coalition politicians wanted a rest. But they should be careful with what they wish for.
Labor spent nine years out of power when it last lost government.
The joy of a couple of rounds of golf will wane as the years pass, with each game another reminder that you can’t change the nation from the 19th hole.
After all, as the adage goes, your worst day in government is still better than your best day in opposition.
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