As the fog of inflation lifts, Dutton is cast in a harsher light

Last August, former union leader Bill Kelty reportedly affirmed what he said was Paul Keating’s diagnosis: “The government needs a greater dose of imagination.” Given the Albanese government’s general lack of ability to surprise, demonstrated over three years, it’s a hard point to argue with.

What, then, of the Coalition? Right now, the Coalition seems flush with ideas. Last weekend, Peter Dutton appointed a shadow minister for government efficiency. Four days later, the Coalition committed to supporting the crypto industry, providing it with “certainty”. Two days after that, Dutton told us more about his plan to cut the public service. First to go would be advisers on cultural diversity and inclusion, change managers and “internal communication specialists”.

Illustration: Joe BenkeCredit:

Getting déjà vu? One of Donald Trump’s first acts as president was to appoint Elon Musk to head up a new Department of Government Efficiency. A key promise of Trump’s campaign was to back crypto. And in the past week, Trump has ramped up his attacks on diversity, equity and inclusion programs – the same DEI programs Dutton criticises.

Or take the fact that a few days before this seemingly Trump-inspired rush, Dutton announced tax breaks for business lunches. Unlike the others, this is not something Trump recently announced. Instead, it’s similar to a policy Trump backed in 2020.

This is no great sin – politicians are always borrowing from other politicians (as I’ve pointed out before, there’s overlap between the policies of Labor and the US Democratic Party). The potential trouble for Dutton lies in the timing.

Last week was the best week the government has had in a long time, for one reason: new inflation figures make a pre-election rate cut far more likely. It may come in two weeks. If not, it is likely to come in April. There is even a chance we’ll see two cuts before an election in May, if that is the date the PM chooses.

The political significance is potentially massive. It is not that a rate cut, on its own, would suddenly convince voters to love the Albanese government. It is the context into which that rate cut will arrive.

First, it may come at a time when voters are already becoming more optimistic. Last November, I referred to an Essential poll finding that more people believed the country was heading in the “right direction” than at any point since May 2023. In January, that number rose higher still. An interest rate cut, then, would act as affirmation of something voters are already beginning to believe.

Second, it is in line with Albanese’s pitch for his first term. Asked recently about his legacy so far, Albanese listed avoiding recession, creating a million jobs, fading inflation, completing the NBN and Gonski, turning around a decline in Medicare and taking steps towards universal provision of childcare.

That list, examined closely, comes in two halves. The second half is about everything outside the economy. It is substantial. But at the same time, it betrays the government’s lack of imagination: it is all about finishing projects begun by previous Labor governments. The one very bold item, universal childcare, the government is only taking “steps” toward.

In a sense, though, the first half of the list provides the government’s alibi for this: it has been busy dealing with a complex economy.

If inflation remained high, the entire list would ring hollow. It would sound like a set of empty economic indicators alongside a humdrum agenda. Voters wouldn’t give it the time of day. But if interest rates – the dominant symbol of inflation – begin to come down, the whole list may take on a different hue. The government’s meek argument that it has been laying the “foundations” for a second term begins to sound plausible; the implicit argument behind this – that progress has been gradual because the government has been busy dealing with the economy – is arguably justified by its success in that task.

Which brings us to the nub of the timing issue. For the past two years, voters have been stuck in the fog of inflation. So has the political debate. But now that we are emerging from that fog, there is the chance to look around and see more clearly: to gain a sharper view of both government and opposition.

That view doesn’t flatter either side. It doesn’t suddenly make a flatfooted government look inspired. But it does perhaps present a more realistic perspective on the huge barrier that inflation had presented to reasonable public conversation around reform. The debate around the Indigenous Voice was the clearest demonstration of that.

For the Coalition, that sharper view does it no favours at all. For over two years, we have been waiting for serious policies. Amid the fog, it didn’t need much. But with that fog lifting and the need for substance more apparent, this is the answer we have been given over the past fortnight: the unimaginative adoption of a series of policies borrowed from an unserious man. Is this really all there is?

And this is before you consider the thinness of these headline announcements. Recall past Coalition confusion over the details of its migration and nuclear policies. For months, Dutton has referred to the “waste” of the government hiring an extra 36,000 public servants. It seemed like he would cut some, if not all, of them. But then his new spokeswoman, Jacinta Nampijinpa Price, told The Australian the Coalition “won’t be cutting” public servants before, later, clarifying that it would.

The government, meanwhile, will continue telling what it sees as a hugely positive economic story: in words used by both Albanese and Treasurer Jim Chalmers last week, “inflation down, wages up, unemployment low”. You could argue Albanese overreaches when he claims this as a “legacy”: economic conditions tend to be fleeting. But as voters blink away the fog and look around, they might, for the first time in a long time, be willing to give him the benefit of the doubt.

Sean Kelly is a regular columnist and a former adviser to Julia Gillard and Kevin Rudd.