When’s the next election? The PM’s upbringing might give us a clue

Around two years ago, Anthony Albanese told journalist Katharine Murphy that, growing up, he had to plan. “If I didn’t plan, my mum wouldn’t have food, we wouldn’t pay rent.” He told Murphy (who has since joined Albanese’s office as an adviser) that he had literally never run out of anything at home: not milk, nor frozen food, nor coffee. He paid every bill before it was due.

There is a clear analogue to one of Albanese’s traits as prime minister: his careful attention to planning and sequencing, his belief that a large part of political strategy is doing things in the right order. But I have often wondered if there is a second meaning to be glimpsed in these habits, one of those childhood lessons that never quite lets go of you: that Albanese believes in shepherding his resources, spending only what you have.

A young Anthony Albanese was careful with money.

The most literal reading of this has created some tension in the government, with revelations in this masthead last week that some ministers are frustrated with the restraint on spending imposed by the expenditure review committee of cabinet. Ministers want to do big things, which takes money, but have been told the budget won’t allow it. This discipline is imposed not just – or even primarily – by Albanese, of course, but by Treasurer Jim Chalmers and Finance Minister Katy Gallagher. Chalmers, when asked about the story, was diligently respectful of the ministers whose claims he was rebuffing; he also said, “if the price of being responsible and disciplined with taxpayer money is an occasional story like this, then so be it.”

The fact that such tensions are being expressed at this moment in time is perhaps due to the other way Albanese believes in “spending only what you have”.

When Labor announced that it would change the stage 3 tax cuts, many in the political class – myself included – said something along the lines of: the government has finally realised how to govern. You take bold decisions, pick a fight, and deal with the fallout. In essence, we were backing in the approach pursued by Hawke, Keating and Howard, in which you build political capital by spending it. A gambler’s model, if you will: betting big in the hope you’ll win big too.

There was some frustration in the upper levels of the government with this reaction. The implication seemed to be that, while the government had not decided earlier on this precise course of action – that is, it had not decided early on to break its tax cuts promise – it had always planned on essentially this political sequence, in which larger, more controversial decisions were left until later in the government’s first term, meaning the suggestion it had changed strategy in some fundamental way was misguided.

There has been much attention given to the difference between the tax cuts shift and other broken promises. The most common distinction made is between broken promises that hurt voters and those that benefit them. But there’s another, also important. When Paul Keating went back on his L-A-W tax cuts, it was a decade into Labor government, and plenty of voters had hardened opinions of him. Julia Gillard’s carbon price, coming after her move against Kevin Rudd, played into pre-existing suspicions of many voters, built on centuries-old misogynistic stereotypes about conniving women. Tony Abbott was hardly popular when his government’s disastrous first budget arrived, and it came early enough in his term to define him.

Albanese did something very different. He was a comparatively unknown quantity to many voters. Unlike Abbott, he spent the first year or so as PM establishing a calm and orderly style and tone. The gain from this restraint, underappreciated, was that he cemented himself in people’s minds in a certain way. There has been speculation about whether the broken promise would shift this; the truth is, in life as in politics, once we have formed a clear impression of someone it can take a lot to shift it.

The cost of this build-up-your-capital-before-you-spend-it is probably partly behind ministers’ frustrations now: it has meant not getting things done quite as quickly as some would like.

Now the government has another timing question to consider. Chalmers has for some time been rhetorically preparing the ground for a potential shift from tackling inflation to confronting a slowing economy. That effort stepped up in the last fortnight.

Albanese and Chalmers will no doubt have one eye on Joe Biden’s recent experiences. The past year in the United States has seen talk of a “vibecession”: the economy performs strongly, but everybody seems to think it’s bad. There was significant debate over why, exactly, people felt this way. Some, like social media figure Will Stancil, blamed the media for being unduly gloomy. Others, like analyst Nate Silver, drew a distinction between different measures of sentiment, pointing out that people felt alright about the present but miserable about the future, which as Bloomberg columnist Conor Sen noted could perhaps be partly blamed by the succession of crises: first the pandemic, now inflation, what next?

We can’t know, but to my mind one of the more persuasive theses is that inflation tends to dominate all else. Even when price rises begin to slow, people tend to compare prices not to what they were last month but what they were a year or two ago, meaning the damage lasts some time. I think this gains some weight from a study I mentioned last year, showing that governments that hold elections within two years of an inflation spike are overwhelmingly likely to lose. In Australia, inflation peaked at the end of 2022 – meaning Albanese would be very brave to call an election this year. (America’s inflation peaked a little earlier, and voters are starting to feel more positive, which could mean Joe Biden’s political hopes improve significantly by November.)

If our economy has slowed significantly by 2025, Labor may need whatever the opposite of a vibecession is: a bad economy where everyone feels good. The truth is that it is impossible to know: since the pandemic, both the economy and people’s reactions to it have been unpredictable, to say the least. There are some situations politicians can’t plan for, no matter how much they might want to.

Sean Kelly is author of The Game: A Portrait of Scott Morrison, a regular columnist and a former adviser to Julia Gillard and Kevin Rudd.