After polling day, our leaders will come clean about the trouble we’re in

Australia is in a Truman Show election campaign. Both major parties are carefully, wilfully myopic. They direct our attention to details of domestic affairs as if Australia can carry on undisturbed. It’s an artificial reality in a contained environment.

The leaders occasionally acknowledge the larger world outside. Like the directors of The Truman Show, they can’t conceal that there is a reality beyond the sound stage of Truman Burbank’s idyllic village, but they prefer to avoid the fact that a historic upheaval is under way.

Illustration by Simon LetchCredit:

One consequence is that many of the programs and promises of the campaign will be unaffordable or irrelevant once the ads stop and the corflutes are packed away.

The election will have come and gone. And failed to brace Australia for the reality beyond.

It’s not that the Labor and Liberal offerings are necessarily bad or stupid. Many are positive, desirable, even admirable. They’re just inadequate. For instance, at the second leaders’ debate 10 days ago, the ABC’s David Speers said to Anthony Albanese and Peter Dutton: “A lot of people say, where’s the serious reform?”

He asked each to name “the one big change you’d like to be remembered for?” Albanese’s answer: “We want the universal provision of affordable childcare so that it is as natural to have your child have access to childcare as it is to have access to the public health.”

And Dutton’s: “Energy is the economy.” He outlined his plan for an East Coast gas reserve to increase domestic supply. “It will help bring the cost pressures down across society.” And he cast ahead to his proposed nuclear energy vision.

Universal childcare and cheaper energy are fine ambitions, setting aside the specifics of how each proposes to achieve them. But they’re expensive and the federal budget already is in deficit.

Next week both parties are obliged to publish a reckoning of how they propose to pay for their many costly promises. So we’ll be able to see whether they’re affordable, right? Only in Truman terms. “The election,” says ANU economics professor Warwick McKibbin, “is surreal”.

“We are not realising that there’s a fundamental shift occurring in the global economy. We should be thinking about repositioning Australia for the next few decades, we have to rethink our geopolitical alliances and the economy,” he tells me from Washington, where he’s in demand as one of the world’s foremost economic modellers.

This election is like The Truman Show, untethered from reality.

“It’s really extraordinary watching the Australian election from here. It’s chaos in Washington – you can’t rule out all sorts of extreme outcomes.” Donald Trump has put the world on the cusp of a wrenching financial crisis, for instance.

Since the end of gold standard in 1971, the entire global system is anchored by the US dollar and the US Treasury bond market. US sovereign assets have been the standard. But now Trump is the sovereign, and what sort of standard is that? Confidence is ebbing and the system teeters. “It’s a one-way shift to China, it’s crazy strategy,” McKibbin says.

“But,” he says, in Australia’s election “they’re proposing all these nickel and dime policies like the tax treatment of lunches and, ‘Are we having an EV tax or are we not having an EV tax?’ These tiny, tiny things.”

Neither Albanese nor Dutton speaks of setting Australia up for the next 30 years and some of their undertakings will be lucky to survive 30 days.

It hasn’t even been 100 days since the onset of Trump’s pandemic of madness, the Trumpdemic. Yet some of the costs are clear already. The IMF this week forecast that Trump’s tariff moves so far have wiped out a quarter of all the growth expected in the Australian economy this year compared to its forecast issued in January.

Inevitably, this will impair Treasury revenues. The federal budget deficit will be aggravated. How have the two parties of government said they will respond?

Treasurer Jim Chalmers acknowledged “a time of extreme global uncertainty” but only to try to win an edge over the Coalition, posing a choice “between responsible economic management and stability under Labor or harsh cuts and mismanagement under Dutton and the Liberals”.

His shadow, Angus Taylor, said we should all be “alarmed” at Labor’s failures and urged the rebuilding of Australia’s fiscal buffers. In other words, neither has made any policy response.

So next week’s end-campaign policy costings will be barely worth the paper they’re printed on. What was not sensibly affordable last month might not be affordable at all next month. And that’s excluding the risk of a possible global financial crisis.

Neither Jim Chalmers nor Angus Taylor has made an effective policy response to Donald Trump’s actions.Credit: Dominic Lorrimer; Bloomberg; Getty

An incoming government will need to prepare for the possibility of issuing an economic and financial statement or mini-budget over the next few months.

The doyen of Australian national security strategists, Paul Dibb, shares McKibbin’s incredulity at the Truman Show quality of the election campaigns. “The risk of a third world war is real,” says Dibb, Australia’s chief defence strategist in the late stages of the Cold War and a professor emeritus of strategic studies at ANU.

“We are underrating what this monster is up to,” he tells me.

‘[Trump] is a fool, he’s dangerous, he brooks no other point of view – and he’s casual.’

National security expert Paul Gibb

Does he mean Vladimir Putin, Xi Jinping or Donald Trump? “I mean Trump,” he says. “He’s a fool, he’s dangerous, he brooks no other point of view – and he’s casual. To pretend nothing has happened is a highly dangerous and stupid path to go down. This could go really bad on us. It’s no good saying this will just blow over in four years. What if one of his sons or J.D. Vance succeed him?

“I know prime ministers and opposition leaders have to stand by the alliance and say ‘we’ll manage this’, but Trump is stirring the possum with Putin, he’s stirring the possum with Xi – and these are not casual players, and they are rearming, both of them.”

Not that he necessarily expects Trump to start a war on purpose. But he likes to quote the US scholar Walter Russell Mead: “World War III is becoming more likely in the near term, and the US is too weak either to prevent it or, should war come, to be confident of victory.”

Dibb points to Australia’s vulnerability, as demonstrated last month by the Chinese navy task group that circumnavigated the continent: “At the height of its power, the Soviet Union didn’t do that.”

Beijing’s message? “It was boastful, carefully planned, it’s coming from the leader of China – ‘Look at what we can do, Australia’. And we are just limping along with this foolish bloody election.”

But both major parties have promised to increase defence spending. Albanese is in the process of lifting it from 2 per cent to 2.3 per cent over a decade. Dutton this week committed to boosting it further, to 3 per cent over the same span. Dibb is unimpressed. Current spending is inadequate and future percentages of GDP vague and unhelpful, he says. Australia needs to identify the specific capabilities that it needs and attach specific funding to it.

“The Australian Defence Force is highly professional, but it’s a small peacetime force. It doesn’t have the capacity to sustain itself in a serious conflict, not at all.

“When I wrote the 1987 Defence White Paper, Australia had six battalions. How many do we have now? Six. We had six submarines. How many do we have now? Six. We had 10 to 12 surface combatants. How many do we have now? A bit less than that”, with ship retirements expected to take the fleet to nine by next year.

“We had about a hundred fighter jets. How many do we have now? About a hundred. What does that tell you? We have exactly the same size force we had in the mid-1980s. There’s a dangerous laziness in the atmosphere.”

Both McKibbin and Dibb think that this moment of upheaval presents Australia with opportunity as well as risk. For instance, McKibbin says: “Getting rid of the risk-free asset that holds down the global financial system” – US Treasury bonds – “means there will be a lot of capital seeking a home, and Australia would seem to be an attractive place to invest it.”

Dibb says that Australia can’t become self-sufficient in defence because it’s too enmeshed with the US already, but he advocates greater self-reliance, a close alliance with Japan and an assertion of Australian power over its northern approaches.

If Australia were to finish upgrading its air northern air bases and build a base in its Cocos Keeling Islands group, “we would have the capability to deny China its maritime commercial traffic including 80 per cent of its oil imports” – establishing a potentially potent pressure point without waiting for AUKUS submarines.

The Lowy Institute’s Michael Fullilove identifies our moment in history as the counterpoint to the post-World War II moment when the US set up a new global order. One of its architects, Harry Truman’s secretary of state Dean Acheson, titled his memoir Present at the Creation.

“Trump rejects Acheson’s creation completely,” Fullilove tells me. “Truly, we are present at the destruction of an international order that has been so congenial for Australia. Yet these disturbing developments have hardly been mentioned during our parochial election campaign.”

By pretending that a planet-scale upheaval is not happening, our political leaders are not helping Australia deal with it.

Truman Burbank eventually breaks out of his artificial reality, only to be tested by a mighty man-made storm. But he survives and steps through the exit into the unknown in high spirits with a salutation to his unseen audience: “In case I don’t see ya, good afternoon, good evening, and good night.”

Peter Hartcher is international and political editor

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