Economic and strategic challenges face Albanese

As the sun comes up on Monday, after a tumultuous but orderly election in our vigorous democracy, Australia faces the same formidable national security and economic challenges it did last week. We congratulate Anthony Albanese and his Labor team on their victory on Saturday. It shows, as we said on Friday, the incoming prime minister is a formidable politician: “A man of great depth, if little non-political experience, thoughtful, considerate; an authentic man who over many years has shown himself to be a collegiate and capable figure of substance in the labour movement.” His rise to the prime ministership, after growing up with his single mum, an invalid pensioner, in a housing commission home, says much about his ability and determination. It also reflects something great about our nation, in which humble socio-economic circumstances are no barrier to aspiration and success. Mr Albanese’s victory was a “really big moment”, as he says, and he is ready to “get down to business” when he returns from Japan on Wednesday.

Mr Albanese has made an important call heading off to the Quadrilateral meeting in Japan with incoming foreign minister Penny Wong. Their attendance signals continuity of Australia’s policy. As Mr Albanese says, his key message to Joe Biden, Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi, all important allies to Australia, will be “that you have a strong partner in Australia, that we want to work with our friends, consistent with what I see as the three pillars of foreign policy: our alliance with the US, our engagement with the region and our support for multilateral forums”. These will be even more important in the new parliamentary term in preserving the West’s security. It is of concern that after concluding its security agreement with Solomon Islands, Beijing is pushing to expand its ­influence in Papua New Guinea. It has offered to prevent violence during coming ­ elections.

To enable Mr Albanese’s attendance at the Quad, Richard Marles will be sworn in on Monday as deputy prime minister. The new government’s economic team, treasurer Jim Chalmers and finance minister Katy Gallagher, will also be sworn in to start work. Australia, like much of the world, faces a difficult economic climate with rising inflationary pressures. It is the wont of new treasurers taking the reins to look over the books and declare the budget and the economy in the worst possible shape, and far worse than the outgoing government admitted. It can be handy for everything from delaying tax cuts to scrapping spending promises. Dr Chalmers, who worked for former Labor treasurer Wayne Swan and wrote his doctorate on Paul Keating, doubtless picked up a few tricks. But the “things are worse than we thought’’ excuse will not wash in the current environment. Nor will dressing up heavy social spending as “productive investment’’.

Budget repair will be important medium to long term. But after the worst health crisis in a century and the worst economic shock since the Great Depression, Labor inherits a strong economy. Unemployment is 3.9 per cent. And low welfare spending and high terms of trade are producing a substantial fiscal dividend. Dr Chalmers has already begun softening up the public for bad economic news. He complained last week that the Coalition “borrowed more, spent more and taxed more than the last Labor government, but delivered much less’’. It has delivered “a full-blown cost-of-living crisis, real wages going backwards, and a trillion dollars of debt that they had already doubled before the pandemic’’. The budget, he said, was “absolutely heaving with rorts and waste and a trillion dollars in Liberal debt’’. In fact, the Coalition balanced the budget in 2019, the first time for any federal government in 11 years. The Coalition borrowed big during the pandemic. But Labor, judging by its criticisms at the time, would have spent even more on JobKeeper, on $300 vaccine incentive payments and free RATs. Its pre-election costings showed deficits up to $10bn greater over four years. In honouring its pitch to encourage higher wages, its challenge will be to do so without fuelling inflation and interest rates and, ultimately, risking a slump in jobs. Mr Albanese, Dr Chalmers and Senator Gallagher should not forget that under similar conditions to today’s, with rising energy prices and inflation, the jobless rate soared from 2.7 per cent in 1974 to 10 per cent in the 1982-83 recession.

As Mr Albanese leads the nation, he will need to be mindful that he won office with a paltry 32.8 per cent of the popular vote – his party was the first choice of fewer than one in three voters. That was lower than in 2019 when Labor lost under Bill Shorten. What mattered on Saturday was that Labor did well where it needed to and the damage inflicted on the Liberal Party by the teal independents in once-heartland seats. The Coalition vote slumped to 35.4 per cent – about 10 per cent lower than when Tony Abbott won office nine years ago.

That is a base from which the Coalition can recover. The Nationals held their seats but the Liberals have much to analyse and important decisions to make as regards their loss of such seats as Wentworth, North Sydney and Mackellar in NSW; Ryan and Brisbane in Queensland; Higgins and Goldstein in Melbourne, and; Hasluck and others in WA. Preselections, male and female attitudes to policy and leadership style, and balancing the concerns of the party’s “broad church’’ and its relationships with the National Party must be examined. Young people’s voting patterns also matter, considering Abraham Lincoln’s insight that: “The philosophy of the school room in one generation will be the philosophy of government in the next.’’ How far are “sustainability’’ and social justice teaching shaping voting trends?

Questions about why and how teal independents, whose policies were virtually non-existent apart from climate change and a federal ICAC, gained such traction in Liberal seats will be vital. It beggars belief that Monique Ryan, who is close to winning Kooyong, Sir Robert Menzies’ old seat, from Josh Frydenberg could do well with no tax or defence policies. “Dr Ryan would not be making tax policies or declaring war,” was her campaign director’s flippant answer when asked. A grasp of the nation’s challenges should be basic for all MPs. As our 31st prime minister starts work, we are encouraged that in a lower house with 15 or more Greens, teals and other independents, the Albanese government appears to have won an outright majority. That will promote stability and the national interest. We wish the new government well.