So what is Albonomics, and what will it mean for Australia?

It started with a $1 coin clutched between the thumb and forefinger of Anthony Albanese’s right hand during an election campaign press conference in Gladstone in 2022.

Under pressure over his economic credentials after famously being unable to name the unemployment rate on the campaign’s first day, Albanese pulled the coin from his trouser pocket to illustrate the hourly increase in the minimum wage hoped for by thousands of low-paid workers.

Within Labor, the coin and Albanese’s full-throated defence of the pay rise – in the face of tut-tutting from economists and the commentariat – was a turning point in the election, for it gave voters an insight into his economic outlook.

The coin has gone, but two years on from that moment, Albanese’s vision for the Australian economy is now evident with next week’s federal budget to cement its final, most important, elements.

Treasurer Jim Chalmers’ first budget in October 2022 contained the heading “a future made in Australia”.

The Future Made in Australia policy, first articulated in a major speech on the economy by Albanese last month, will be a central part of the budget. But it follows a string of ideas and policies, stretching from that $1 coin to economic gender equality and a renewed focus on housing.

Details of the Future Made in Australia policy, a collection of grants, tax incentives and government equity stakes in private businesses, have been scant. Next week’s budget will fill in the blanks.

Since winning office, Albanese has leaned heavily into the idea of getting Australia to “make stuff”. Treasurer Jim Chalmers’ first budget in October 2022 contained the heading “a future made in Australia”, starting with the promised $15 billion National Reconstruction Fund.

Speaking in Perth this week, Albanese argued his plan was not about pulling up economic drawbridges or cutting ties with key trading partners, but diversifying the economy.

The South Sydney Rabbitohs tragic used a football analogy to explain how he sees the economy and the Future Made in Australia policy.

“I’ve made it clear that in this time of fiercely contested global opportunity, our government is not going to sit on the sidelines and watch the game unfold,” he told business leaders in Perth. “Nor are we trying to play every position.”

Amid the turmoil caused to global supply chains by the COVID-19 pandemic, the competition for cash caused by America’s enormous Inflation Reduction Act, and the growing concerns about nations such as China, the policy squarely centred on the nation’s economic security.

French President Emmanuel Macron, in an interview with The Economist magazine earlier this month, went to the those very issues and what they meant to Western democratic nations.

He argued that when China was brought into the World Trade Organisation, it was expected that the then-emerging economic giant would abide by and respect international rules around trade and economic behaviour. That has proven a monumental mistake.

“The Americans have stopped trying to get the Chinese to conform to the rules of international trade. They have taken their own action. And we Europeans haven’t wanted to see this. That’s a huge mistake,” he said.

“When you have the No.1, the No.2, who decide in all conscience to subsidise critical sectors that they consider essential for them, who are prepared to put public money into attracting capacity, you can’t carry on as if this isn’t happening.”

Reinforcing his concerns about the new world economic order and the threats contained within it, Britain revealed a few days later that its Ministry of Defence had been hacked – by China.

Macron argued the European Union should dramatically increase research and development funding in areas such as AI and quantum computing.

That same week, Albanese was in Brisbane promising $1 billion in federal-state funding to set up the world’s first commercial-scale, useful quantum computer.

But Albanese’s economic outlook is not confined to manufacturing.

From July 1, the contentious stage 3 tax cuts will finally start flowing to Australians.

Before the October 2022 budget, Chalmers – among others – floated the idea of overhauling the cuts, worth $23 billion over the coming 12 months.

Albanese shut down the debate, partly to avoid criticism that he had broken his pre-election promise to keep the cuts in place.

Chalmers and Finance Minister Katy Gallagher.Credit: Alex Ellinghausen

By December last year, with inflation elevated and growing concern about the shape of stage 3, Albanese gave the green light to re-visit them. Now they are a centrepiece of the coming budget with the government already advertising their importance.

Albanese has leaned heavily into his family history.

In his speech on election night 2022, Albanese referred – again – to his early life growing up in public housing with his single mother in the inner-west Sydney suburb of Camperdown. Housing, be it public or private, has always been part of Albanese’s narrative.

That was put into action in the campaign when Labor promised several new programs to boost housing investment including its 2022 commitment to build 1 million new homes between mid-2024 and mid-2029.

The government now estimates it has promised $25 billion through 17 separate programs aimed at housing, be it construction, land supply or providing for the infrastructure and planning needed for those homes.

With rental vacancy rates at their lowest levels on record, next week’s budget is likely to contain more funding.

A stark contrast to previous governments, of all persuasions, has been the effort by Albanese and his ministers to put women at the centre of the economic debate.

On election night 2022, Albanese declared his government would make “equal opportunity for women a national economic and social priority”.

From abandoning the Julia Gillard-era policy to restrict access to the parenting payment that was overwhelmingly paid to single women to its changes to childcare and the introduction of superannuation on paid parental leave, its initiatives on gender issues have been couched as an economic imperative.

This week, Finance Minister Katy Gallagher argued economic equality for women was at the heart of the government.

“All of these areas we have been focusing on … [are] about making sure we’re driving the economic independence or equality of women so that that intersection is reduced, that women have financial capability on their own grounds so that it reduces the risk of violence in the family unit,” she said.

In a range of other economic issues, Albanese’s stamp is evident.

As he held up the $1 coin during the election campaign, Albanese said Labor would get wages growing again. Wage growth is now at its fastest level since 2012, while Labor has embarked on a series of contentious and union-friendly changes to industrial relations laws.

Inflation has been a defining feature of Albanese’s term in government.

A combination of COVID-era stimulus, broken supply chains, pent-up demand and ultra-low unemployment were delivering price pressures well before the 2022 election.

But on taking office, he and the government took ownership of the inflation problem that has forced the Reserve Bank to aggressively lift official interest rates.

This has prompted the government’s policies that deliver cost-of-living relief without feeding the inflation dragon.

From childcare to rent assistance and electricity subsidies, the government has produced a string of handouts all aimed at helping Australians. The May budget will contain more, likely an extension of electricity subsidies but also relief for university students with skyrocketing HECS-HELP debts.

Connected to its housing and manufacturing policies has been a concerted push into vocational education.

Another 20,000 fee-free TAFE places will be funded in next week’s federal budget.Credit: Rob Homer

The introduction of fee-free TAFE courses, outlined in its first year in office, has formed part of a change in policy direction that recognises the importance of vocational education to the economy.

The initial program, aimed at 180,000 places, has already proven successful with about a quarter of a million people taking advantage of the scheme. This week, Albanese promised another 20,000 fee-free places aimed at the construction sector.

One person who believes the Albanese economic vision is evident is Deloitte Access Economics lead partner Pradeep Philip.

“The government’s economic vision has been evolving over time, but I think you now have a much clearer picture of that vision,” he says. “You might not agree with the vision or think it’s not going to work, but there’s clearly a vision of where he wants the country to head.”

But Philip cautions there is a substantial difference between the rhetoric and promises from the government, and what is ultimately delivered.

“There might be a lot of good ideas, but it’s implementing them that is the difficult issue, and that’s where people get worried about public policy activism. We’re not short of ideas, but it’s the implementation that is the issue,” he says.

But not everyone is convinced that Albanese has a firmly fixed economic agenda.

“There’s definitely a lot of things going on, but whether it’s an economic narrative or reform vision is another story,” independent economist Nicki Hutley said. “It doesn’t feel to me that there’s an all-encompassing, coherent economic story rather than trying to deal with a range of issues.”

Hutley has deep concerns about the Future Made in Australia policy, arguing that despite all the rhetoric, the cost and what is actually going to be achieved through the program have yet to be revealed.

The stage 3 rejigged tax cuts, she says, don’t qualify as genuine tax reform. According to Hutley, both sides of politics have lost the ability to paint a picture of the Australian economy. “The budget speech is important in outlining what the government stands for,” she said. “But I think Australia has over the years lost that ability to deal with a grand vision of where the government wants to get to.”

Inflation has been a defining feature of Anthony Albanese’s term in government.Credit: Kate Geraghty

Leading up to Tuesday, Chalmers told this masthead the budget would be about relief and reform: “It’ll be about relieving cost-of-living pressures in the here and now and positioning our economy to take maximum advantage of these opportunities into the future. It’ll be about cost-of-living help, and a future made in Australia.”

It will be Chalmers’ third budget in less than 20 months. As treasurer, he is often portrayed as the economic voice of the government. But any decision by a treasurer has to go through cabinet. And the person chairing the cabinet is the prime minister.

Paul Keating’s reforms would have gone nowhere if not for the tacit support of Bob Hawke. It was John Howard who had to prosecute the electoral case for the goods and services tax despite saying the Coalition would “never ever” introduce such an impost.

Albanese has a long way to go before matching the length of tenure, or scope of economic change, that both Hawke and Howard oversaw during their terms in office.

But after almost two years into his prime ministership, the elements of the Albanese economic agenda are now clearly in focus.

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