Tax cuts, bill relief and more on offer, but Anthony Albanese and Jim Chalmers just can’t sell it
Anthony Albanese and Jim Chalmers couldn’t sell water to a dying man in the desert.
From this week, wage rises, tax cuts and energy subsidies are all going to put more money in people’s pockets.
Yet since the budget, Labor’s primary vote has gone only one way – down.
Either voters don’t buy the bull or Labor’s proclivity for political felo-de-se has deafened the electorate to its more boastful claims on the economy.
And hanging over all this is the spectre of what may be coming. Don’t underestimate the electorate’s ability to sift the flour.
Publicly, the Treasurer is on a positive spin over his cost-of-living relief. Privately, however, he will be sweating bricks for the next six weeks, gripped by fear over what the central bank may or may not do in August.
This is now looming as the central test for Chalmers and the government – both economically and politically.
It will be the pivotal moment that will decide the course of the contest until the next election.
If the key selling point is that people are better off thanks to Chalmers, the underlying truth is that nothing has actually changed. The pain has just been rearranged.
The key question now is not whether more pain is to come or whether the current pain is prolonged. And Labor has clearly identified borrowers as the guinea pigs. This says a lot about its strategic posture.
If the RBA keeps rates on hold, as will be its inclination, then the pain can be blamed on the RBA. This is the political upside for Chalmers.
But if all the state and federal government spending does lead to a rate rise, then it will be Chalmers who owns it. He will have inflicted more pain.
More likely than not, the RBA doesn’t hike. But this will be a close-run thing. And if even if it doesn’t, Michelle Bullock is likely to rattle the sabre.
This doesn’t give Chalmers the clear air he will be seeking.
The political stakes couldn’t be higher for Chalmers or Albanese. And this all feeds into election timing.
If rates don’t rise in August Chalmers gets over a crucial hump.
With the energy rebates from the commonwealth and state coffers feeding into the price index, there is every chance the Treasurer meets his promised target of getting headline inflation back within the 2-3 per cent band.
He will have bought himself a cut in headline inflation with the assistance of state Labor mates.
This is where the political narrative and economic reality collide. From a political perspective, it will be a great story to tell.
People will expect that if headline rates look good, why doesn’t the RBA cut rates.
But as we know, the headline rate is not the determining factor. And this is the nuanced debate Chalmers is clearly happy to have.
It won’t be Chalmers that has to make the argument, the talking points to every other Labor minister and backbencher will do the work.
If it hasn’t dawned on Michele Bullock yet, it soon will. Chalmers is setting her up. Bullock has so far given Chalmers rhetorical cover in her public statements about inflation and the budget.
The RBA board’s statement, however, tells a different story.
There is no equivocation about its view that state and federal government spending is adding to the problem.
Our Future Made in Australia seizes net zero opportunity
We have a chosen a better path that is mainstream and middle of the road, which will make our people and businesses more prosperous in the future we make together.
Berko Bandt is an existential threat to Labor
In the wake of an outrageous act of terrorism perpetrated by Hamas on October 7, the Greens’ immediate answer was to blame Israel and call for a ceasefire.