Albanese v Dutton: a contest over trust
This is a contest between a flawed government and a still unconvincing opposition. The risk for Albanese and Dutton is that neither captures the Australian imagination and that both major parties struggle, with their primary vote support suggesting the May 3 election may become a pointer to a more fractured nation and another big crossbench.
Australia faces a brutal yet uninspiring election. This is an election that revolves around “who do you distrust least” – Anthony Albanese or Peter Dutton. It is a contest between a flawed government and a still unconvincing opposition.
The prospect is that a divided nation will vote for a minority government. The Albanese-Dutton contest will be loaded with negatives – and this drives unambitious and impractical agendas. It will be dominated by a narrowcast cost-of-living contest, the fear being that Australia is locked into a holding pattern, marking time in a world moving faster and getting more dangerous.
Albanese seeks to become the first prime minister since John Howard in 2004 to be re-elected, breaking the cycle of de-stabilisation while Dutton seeks to terminate a single-term Labor government, a feat not achieved since 1931.
The risk for Albanese and Dutton is that neither captures the Australian imagination and that both major parties struggle, with their primary vote support suggesting the May 3 election may become a pointer to a more fractured nation and another big crossbench. This election is more unpredictable than usual and the campaign will be more decisive than normal.
Shadows have fallen across Australia’s future. The national interest imperative for Australia today is to be more competitive, strategically stronger and more productive – but that’s not happening in this election and the nation will end up paying an accumulated price. The election dynamic is that Labor is weakened, its record is flawed, but the pivotal point of the entire campaign may settle on Dutton’s ability to project as a strong prime minister. He seeks to model himself on Howard and diminish the Abbott-Turnbull-Morrison era.
Dutton’s pitch is that Australians are worse off today than three years ago, with people suffering from high shopping prices, skyrocketing energy bills, rent and mortgage stress, crime on the street, losing out on home ownership and the battle to see a GP. The Opposition Leader says the Australian dream is broken and, unless Labor is removed, “our prosperity will be damaged for decades to come”.
Dutton has an effective “back on track” slogan. He pledges a five-point recovery plan – a stronger economy with lower inflation, cheaper energy, affordable homes, quality healthcare and safer communities – yet he has failed to provide a credible economic policy, a tenable reform agenda and, so far, prioritises a halving of fuel excise over tax cuts and tax reform, signalling a cautious, even a “small target” Coalition tactic.
Albanese’s message, flashing his Medicare card, is that “only Labor can make you better off”. He invokes his 2022 pitch: “no one held back, no one left behind”. He claims people will be $7200 worse off under the Coalition and depicts Labor as the party that is “building for the future”. Albanese’s message, following Jim Chalmers’ budget, is that the “economy has turned the corner” and the worse is behind.
Albanese runs on his record. But is that his problem? He highlights cost-of-living relief, higher wages, more bulk billing, cheaper medicines, help with energy bills, cutting student debt and a new personal income tax cut. His weakness is offering more of the same to a pessimistic public, with many people seeing him as a weak or indifferent leader.
Hence Labor’s pivotal ploy – its effort to destroy Dutton as it destroyed Scott Morrison in 2022, with Albanese claiming Dutton will “cut everything except your taxes”. He says Dutton is the great risk to Australians but the danger for Labor is that its scare against the Liberal leader won’t work a second time.
There are two harsh realities you won’t hear about in the campaign – Labor’s election agenda and mandate if re-elected is grossly inadequate to the needs of the nation across the next three years while the Coalition assumes the spending and tax reforms it intends to implement in office cannot be successfully marketed from opposition. So don’t expect to hear a lot about them.
For Albanese, the election prospect is humiliation but survival. With Labor holding a notional 78 seats and the Coalition a notional 57 seats in the new 150-strong chamber, the idea of Dutton being able to achieve a win in his own right is remote. It would be a herculean feat.
Yet virtually every recent poll suggests Albanese cannot win a second term as a majority prime minister. To defy these numbers would constitute a stunning recovery. For Albanese, being forced into minority government after one term – a repeat of the Rudd-Gillard fate in 2010 – would represent a devastating setback, demanding all his skill to manage a minority executive reliant on a crossbench of Greens and teals.
While Dutton is running for victory after one term, forcing Labor into minority government would empower the Coalition after its dismal 2022 defeat and open the prospect of a substantial change of government at the subsequent poll, a repeat of the Tony Abbott story. The collective risk for Albanese and Dutton, however, is public disillusionment with the major parties caused by their mutual policy inadequacies.
Remember, it is Labor’s weak 32.58 per cent primary vote in 2022 that has limited the government ever since and driven its pervasive caution.
The fear is a 2025 election campaign of bipartisan mediocrity leading to a compromised new parliament and a weakened government.
On Labor’s side, the comparison will be made between Albanese and Jim Chalmers as to who is the best campaign performer – a pointer to the future. On the Coalition side, this is Dutton’s first campaign as leader and his test will be to curb thought bubbles and stick by precise policy positions, otherwise he will be in trouble.
With his momentum faltering Dutton, in his budget reply on Thursday night, put more substance into his alternative policy agenda but still suffers from the gulf between his promise and his policies. He pledges a stronger economy, cutting red and green tape, making Australia a mining, agricultural, construction and manufacturing powerhouse, but there is little detail on how the Coalition will realise its better economy or deliver a better budget bottom line.
A pivotal judgment from Dutton and opposition Treasury spokesman Angus Taylor – at least so far – is their rejection of tax cuts and tax reform in the campaign while attacking Labor for increasing income tax by 24 per cent. They dismiss Labor’s modest tax cut for everyone in Chalmers’ budget, worth $5 a week from July 1, 2026, and $10 from July 1, 2027.
Dutton’s judgment is that people want immediate cost-of-living relief rather than tax cuts down the track. But the contradiction remains: the party pledged to lower taxes is the party opposing Labor’s election tax cut. This reflects Taylor’s conviction that tax relief is a function of spending restraint and must be tied to a new fiscal strategy implemented in office.
Energy policy offers the most dramatic differences between Dutton and Albanese, proving that the climate wars are as intense as ever and energy bipartisanship is a forlorn hope. Dutton’s more expansive policy involves ramping up domestic gas production, forcing 10-20 per cent of export gas into the east coast domestic market, decoupling the domestic price from the international price and accelerating gas investment, projects, pipelines and new fields – an ambitious agenda that will provoke conflict and commercial challenges but cannot deliver his pledge of lower energy prices in the short term.
In the immediate term Dutton offers a populist cut in fuel excise for 12 months to help people with cost-of-living pressures and nuclear power in the distant long run, though whether this is ever a realistic option in Australia remains dubious. At the same time the Coalition has responded to grassroots hostility towards renewable infrastructure, with Dutton saying: “There’s no need to carpet our national parks, prime agricultural land and coastlines with industrial scale renewables.”
This is a frontal assault on the Albanese-Bowen renewables-driven climate policy that is being undermined by the experience of higher power prices not likely to dissipate any time soon. While Dutton’s policy will face resistance in the teal-held seats, it has the potential to win support in suburban and regional Australia.
Dutton promises a stronger defence budget but postpones the figures to the campaign. He still needs more details on the 25 per cent cut in permanent immigration. He pledges to “energise” defence industry – that’s essential – but he doesn’t say how. He attacks Labor’s industrial relations policies but, apart from pledging to revert to a simple definition of a casual worker, says nothing about most of Labor’s pro-union anti-productivity IR laws.
On safer political ground, he prioritises the attack on criminality in the building industry – restoring the construction industry watchdog and de-registering the CFMEU. There is tax relief for small business, access for first-home buyers up to $50,000 of their super for a home deposit, commitments to women’s health, youth mental health and policies for a safer nation with more social cohesion.
Dutton pledges to “rein in inflationary spending” but there is little framework on how this happens. He will end Labor’s off-budget funds – the $20bn Rewiring the Nation Fund and the $10bn Housing Australia Future Fund, scrap the $16bn production tax credits and reverse Labor’s increase of 41,000 Canberra-based public servants – while pledging not to cut frontline service-delivering roles.
Dutton makes a big claim. He says: “This election matters more than others in recent history.” But why? Is that because of Labor’s failures or because of the Coalition’s alternative credo? That credo remains a work in progress.
The Coalition goes into this campaign short on the policy agenda it needs to make this a truly decisive election.
This means that Dutton, presumably, will have a lot to reveal in the campaign. That is an opportunity as well as a risk. How much fresh policy will Albanese announce? He is smart to have a short five-week campaign.
This Chalmers budget has exposed Labor’s limitations. It is locked into a social spending escalation difficult to break; a productivity outlook – the prime driver of living standards – that is stagnant; high personal income tax far into the future; and in a more dangerous world that demands a further lift in defence spending, Labor repudiates such a choice.
Yet the budget reveals Labor’s ability to offer a plausible case for re-election with the economy in recovery mode. Chalmers said: “Inflation is down, incomes are rising, unemployment is low, interest rates are coming down, debt is down and growth is picking up momentum.” Labor’s problem is that it cannot repair the substantial 8 per cent fall in living standards since it took office. If people vote on cost-of-living outcomes, then Labor loses. But they vote on a comparison between Labor and Coalition policies and, in reality, both sides are vulnerable. Labor, however, cannot escape responsibility for the flawed tax-spending legacy it leaves after three years.
The election will test whether the Australian public prioritises debt and debt reduction or if economic accountability is a forlorn political notion. Australia under Labor is marching into a new identity as a high government spending, high personal income tax nation – the significance of the budget is to confirm the trend but almost certainly underestimate its extent.
Labor’s fiscal rules are too weak. The budget for 2025-26 plunges into a $42bn deficit after two earlier years of surpluses. This is followed by a decade of deficits. The headline deficit over the next four years (including off-budget spending) totals a monstrous $283bn. Gross debt will reach $1.223 trillion in four years. Spending in real terms (taking account of inflation) increases by 6 per cent in 2024-25, an extraordinary figure outside a downturn crisis. It is forecast to rise by 3 per cent in 2025-26; that’s still high. The budget forecasts spending to settle across the next four years at a plateau of around 26.5 per cent of GDP, distinctly higher than the recent trend.
It is idle to think productivity will be an election issue. But its legacy – falling living standards – will affect nearly everybody. The Productivity Commission’s quarterly bulletin released this week shows labour productivity declined 0.1 per cent in the December quarter and by 1.2 per cent over the year. Productivity Commission deputy chairman Alex Robson said: “We’re back to the stagnant productivity we saw in the period between 2015 and 2019 leading up to the pandemic. The real issue is that Australia’s labour productivity has not significantly improved in over 10 years.”
Here is an omen – unless productivity improves then Australian governments will struggle, the community will be unhappy and restless, and national decline will threaten.
Yet budget week was a sad commentary on our shrunken policy debate. The election prelude has been a Labor and Coalition brawl over one of the smallest income tax cuts in history. The Coalition voted against Labor’s tax cut, branded it a “cruel hoax”, pledged to repeal the tax cut in office and delivered instead a halving of fuel excise with Dutton saying the proposal would be introduced in parliament on the first day of a Coalition government. It would be implemented immediately, last only 12 months and cost $6bn.
The gain is $14 a week for a household filling up once a week and with a yearly saving of $700 to $750. For households with two cars filling up weekly the saving will be around $28 weekly or close to $1500 over 12 months.
Dutton said it would help people commuting to work, driving kids to sport and pensioners doing it tough. His populist excise cut looks a winning cost-of-living ploy.
But not so fast. By opposing Labor’s tax cut, the Coalition gives Labor a powerful rhetorical campaign. The tax cut is small but, as Chalmers said, “meaningful”. It threatens, however, to become symbolic.
“Labor is the party of lower taxes,” Albanese told parliament on Thursday to Coalition jeers.
It means a Dutton government would be pledged to increase taxes for all taxpayers. (But probably would not have the numbers to repeal the tax cut anyway.) Defending the tactics, Taylor said the excise cut was “highly targeted relief, temporary but also immediate”.
Chalmers told parliament the Coalition stood for three things – higher personal income tax, secret cuts to spending and no permanent cost-of-living relief.
In this election Albanese fights on two fronts: against the Coalition and the Greens.
Dutton fights on two fronts: against Labor and the teals given their blue-ribbon Liberal seat gains from 2022. The election will test whether the Coalition still has an existential problem with both young and female voters. It is fatuous to think these burdens are expurgated.
The nation is crawling ahead, living conditions are in gradual repair and policy is locked in a slow lane. Our political system – Labor and Coalition – is running shy of the challenges that demand an ambitious response. But elections are chances to shift the nation’s mood and open new doors. Let’s hope both Albanese and Dutton rise to the occasion and the opportunity. This is what Australia needs.
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