Suddenly, when ALP officials surveyed the economic and political landscape for 2025 there were ten smoking volcanoes, most of which look likely to erupt in coming months.
They concluded: “The sooner we go to the polls the better, irrespective of the Reserve Bank interest rate decision”.
And so, confirming the Geoff Chambers’ prediction of an early election, this week alarm bells were ringing in most areas of the public service in Canberra, indicating the government wants to call an early election.
It is possible Anthony Albanese might change his mind but the fear of these erupting volcanoes makes that unlikely.
Once the election is called the running of Australia goes into caretaker mode. Accordingly, it make sense to complete contracts and other routine public service business affairs which otherwise would be stalled by the caretaker period.
Some past governments (of both major parties) have used this process to force through controversial measures, and hopefully the Albanese government won’t play that game.
There are at least 10 potential erupting volcanoes (one blew this month) which could contribute to the Prime Minister’s decision to change his stated position of planning to run his full term:
• Volcano One: Peter Dutton’s approval rating is steadily rising and if an election is delayed this trend may continue. At this point Albanese can still be a winner, perhaps in partnership with the Greens, despite their policies on the Middle East.
• Volcano Two. The deterioration of the Victorian government’s ability to govern is gathering pace, and if the election is delayed much further the question of what to do about the state ALP government will not only dominate every Victorian voter, but will become a national issue.
• Volcano Three. Just before Christmas I issued three alerts for 2025 markets. One of those alerts was that a large number of enterprises, having advertised for senior positions, had suddenly reversed their hiring decisions.
Short-listed candidates were told the position was no longer being filled. This was the first indication a large number of Australian enterprises were no longer hiring because of the uncertainties and the looming lower productivity impact of the government industrial relations legislation.
Roy Morgan Research calculates unemployment differently to the ABS, but in any marked change the two indices almost always run in parallel. Morgan reports that unemployment has skyrocketed from 8.6 per cent in November to 10.1 per cent in January. The unemployment impact of the hiring freeze is set to explode in ABS figures in coming months.
• Volcano Four. The strong retail sales we noted in the final months of 2024 covering areas where non-mortgage or rent-stressed consumers are spending, including many young people living at home, is continuing. But the low Australian dollar of recent months is affecting retail purchase prices and will lift the cost of hi-tech goods and appliances and many other areas in coming weeks.
• Volcano Five. The Albanese government has set all sorts of housing targets but failed miserably to address the problems of the industry including the nightmare of council permit delays around the country. Home renovations continue to be strong but there has been a dramatic collapse in the past two weeks in the ordering of major building construction materials. Vast areas of the building industry have given up . Volcano five has already erupted and the impact of the lava will spread in coming months. The ALP will need a new housing policy to compete with the Coalition.
• Volcano Six. The unhappiness in the community with the government’s migration rush will increase month by month in 2025 because state governments cannot handle the crime that’s partly caused by the influx.
• Volcano Seven. The badly planned Albanese government renewable energy push will continue to increase power prices and their gas policies look like creating shortages in some states.
The massive power subsidies are concealing the truth but, and as 2025 proceeds, the ALP energy mess will be better understood by the population. In addition the Coalition may learn how to sell their energy policies which offer a lower-cost alternatives via greater use of gas and following the world in producing nuclear power.
• Volcano Eight. Like vast areas of the private sector, government costs are exploding and that’s being made worse by a public service hiring binge. The government’s forward revenue projections look bad given what is happening in China in the light of the Trump administration’s tariffs. Fear that the next government – no matter who wins – will not be able to continue the massive subsidies will increase in coming months. Dutton has discovered that it is possible to keep benefits but slash the bureaucracy – a version of what Elon Musk is doing in the US. He may develop better policies in this area as each month goes by.
• Volcano Nine. With an Australian national hero, whistleblower Richard Boyle, facing 40 years jail for telling the truth about ATO tax collection methods, parts of the organisation feel free to treat small and medium business deplorably. Hostility and fear in this area of our community is rising rapidly.
If the election is delayed the Coalition might just wake up and have a proper tax collection policy. That would be a disaster for the government.
• Volcano Ten. The world’s first tax on unrealised investment gains has be given a potential beachhead in parts of superannuation. People are waking up that if there is a joint ALP- Greens government the impact of this tax will widen dramatically. Treasury see it as the way to cover energy subsidisation and lower government income. It’s a potential disaster for stock markets and financing entrepreneurship.
Should the Prime Minister change his mind and call an early election, it will not be a hard decision.
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