Economy, not Assange, is where PM’s focus must be

Anthony Albanese once again strayed off course in his fulsome embrace of convicted security traitor Julian Assange. For ordinary voters, the real news is that interest rates are going up, productivity has hit the floor and bracket creep will make short work of any benefit from the coming stage three tax cuts. To add insult to injury, more than half of the jobs created over the 12 months to March were government-funded in the “care economy”, including childcare, disability and aged-care services. Productivity Commission deputy chair Alex Robson warned on Thursday that “labour productivity seems to have reverted to the stagnation we’ve seen for most of the past decade”. This was on top of the latest inflation figures showing core inflation was up, not down, last month and bets are mounting that the Reserve Bank’s next move in the cash rate will be up as well.

As the economic train wreck has been unfolding, the public image of Mr Albanese is one of championing a long-time fugitive from US justice. Regardless of what your attitude might be to Assange’s actions, he pleaded guilty to crimes against our closest international ally and, by extension, all Five Eyes security partners, of which we are one. Opposition foreign affairs spokesman Simon Birmingham said the Prime Minister had sent all the wrong signals and was irresponsible and inappropriate in welcoming home Assange on the same day he pleaded guilty to US charges. Senator Birmingham has a point.

So does opposition home affairs spokesman James Paterson when he states that prime ministerial comparisons of the WikiLeaks founder and Cheng Lei, Sean Turnell and Kylie Moore-Gilbert were wrong. These were Australians who were innocent and persecuted by authoritarian powers. The depth of feeling in the US over the Assange issue was expressed by former vice-president Mike Pence, who said the Biden administration’s plea deal with Assange was “a miscarriage of justice and dishonours the service and sacrifice of the men and women of our armed forces and their families”. Mr Pence said there should be no plea deals to avoid prison for anyone who endangers the security of our military or the national security of the United States. Ever. Assange has been reunited with his family and it remains to be seen what his next moves will be. On past form, Senator Paterson is probably right to say Mr Albanese’s embrace of Assange will “not age very well”. The bigger problem for Mr Albanese is what the Assange affair says about the Prime Minister’s discipline and ability to stay focused on the issues that really concern mainstream voters. Assange is a cause celebre primarily for the inner-city sophisticates who gravitate toward the Greens and teals. The fact Mr Albanese was taking calls from Assange on the day it was confirmed inflation was back on the rise, and interest rates might soon be as well, only served to reinforce the point.

Before the start of this parliamentary sitting, the government let it be known the two-week period would be used to focus exclusively on the cost-of-living issue. Opposition Leader Peter Dutton issued a challenge with his plan to support nuclear power to underpin the faltering electricity system. But the government has spent much of the first sitting week distracted by what to do about West Australian Labor senator Fatima Payman, who defied her party’s position and backed a Greens motion in the Senate to recognise Palestine as a state. Mr Albanese told parliament he was showing strong leadership and taking corrective action by banning Senator Payman from attending a single caucus meeting before parliament rises for a five-week break.

The government is no doubt hoping voters will reward it for the increased pay packets from tax cuts that take effect from the start of the new financial year on July 1. However, the win is likely to be short-lived, with the bigger economic challenge becoming more apparent. This is the rise in government spending, the failure to contain inflation and the entrenched negative trend in productivity. The common theme is big government with increased public sector spending crowding out small business, households and the private sector.

As we report on Friday, productivity dropped by 2.2 per cent in the non-market sector in the year to March, against a 0.8 per cent increase in output per hours worked in the market, or private, sector. Public sector wage increases are only making the situation worse. RBA governor Michele Bullock has repeatedly said wages growth at around 4 per cent was not consistent with returning inflation back to target without a lift in productivity. As we noted on Thursday, the government’s workplace relations reforms, the latest of which begin in August, are not productivity-orientated, and a $60bn jump in federal and state government spending in the new financial year will add to inflation and risk keeping interest rates higher for longer. The first parliamentary week of the current sitting has effectively been squandered. The window for an early election is closing and there is little to suggest things will get easier, economically speaking, for Mr Albanese after that. The economy, not Assange, is the issue voters care about and where the Prime Minister’s focus must be.