Economic growth top priority

In his pre-parliament pep talk to the Labor caucus, Anthony Albanese pledged to “hit the ground running” on Tuesday to “break the inertia” left by the previous government. His government will introduce “at least” 18 pieces of legislation in the first parliamentary sitting week. The legislation will enshrine Labor’s 43 per cent emission reduction target, introduce reforms from the aged-care royal commission, provide 10 days’ domestic violence leave and establish Jobs and Skills Australia, a national body aimed at driving vocational education and training and strengthening workforce planning.

The government is understandably keen to get on with its agenda. But it needs to avoid a scattergun approach, to avoid too many new impositions on business and to co-ordinate its efforts towards its overarching challenge – economic management.

Jim Chalmers’s economic statement on Thursday is set to be the most significant speech of the week, coming at a crucial point. Despite US unemployment falling to a 50-year low of 3.6 per cent in June, the world’s largest economy is tipped to be officially in recession by the end of this week. On Wednesday, the Australian Bureau of Statistics will release consumer price index data. Economists expect it to show inflation has accelerated to its fastest pace since 1990, from 5.1 per cent in March to 6.2 per cent or even higher over the year to June. That outcome would be likely to lead to a third consecutive 0.5-percentage-point rate rise to 1.85 per cent at the Reserve Bank’s board meeting the following Tuesday.

Dr Chalmers has foreshadowed that his statement to parliament will be “really blunt’’, especially in relation to inflation and the impact of interest rate rises on economic growth. “I think some people will find that a bit confronting, but I think it’s important that people understand what we’re dealing with,” he said. What the public does not want to hear is Dr Chalmers blaming the previous government for the economic challenges it faces, especially after Labor urged the Coalition to spend even more in the pandemic. What the public and business need to hear is the government’s strategy for reducing its own spending as interest rates on government debt increase, and how it will promote productivity and growth.

Workplace Relations Minister Tony Burke has taken a retrograde step in dismantling the building industry watchdog so early. Meeting that promise could have waited until the economy was in a stronger position and the government had an alternative plan to avoid a surge in industrial action on building sites.

Higher infrastructure costs will be passed on to taxpayers and the higher costs of commercial projects to consumers. Already the Electrical Trades Union is seeking to take advantage of the building code’s abolition to reinstate clauses that require employers to convert casuals to permanent employment and limit use of labour hire. This week will set the scene for the government’s parliamentary style and how the opposition will hold it to account.

At a time of high debt and inflation, “it’s the economy, stupid” must be front and centre.