ALP ‘straddling a barbed-wire fence’ on energy and cost of living
There was a time, decades ago now, when campaigns were relatively low-key, simple affairs. Candidates would address one or two local public meetings and the major challenge of the campaign was to settle on the wording of a brochure that discussed policy issues, often in some detail, and to then ensure it was distributed to every household. The campaign consisted entirely of volunteers.
Those days are long gone. Campaigns, even at the most local level, are now costly, complex and highly professional affairs.
Campaigns now extend well beyond the formal 33-day period. The current campaign has been under way since at least October, and Friday’s announcement simply met a formal requirement. Both sides have slipped seamlessly into a higher gear.
Nevertheless, the formal campaign matters, and elections can be lost during this period. This is what occurred in 2019 when Scott Morrison ran over Labor to snatch a late win. By contrast, in 2007 and 2013 the community had clearly made a decision to change six or more months before polling day.
That is not the case this year. The election will be decided over the next five weeks.
All polls are recording a high vote for third parties and independents, whose second preferences will be decisive. In addition, there remains an unusually high “soft” vote; that is, people who are reluctantly supporting a party but may change depending on developments during the campaign.
It is why in the 2025 election everything will matter.
It is why there is an unusually high number of seats, as many as 40, where a real contest is under way. Where things settle in those seats will determine the next government. Public attention will be on the two leaders and the national campaign, as it should be. But there will be intense campaigning in each of these 40 seats, where local issues, personalities and organisational capacity will also be important. These contests will largely take place beneath the national radar, and it is why, on election night, we should expect some surprise results.
Typically, the first week or two of an election campaign is a contest between the parties to establish their preferred issues as dominant. That is not the case this time.
Real household disposable income per capita, the best metric of our living standards, fell by 8 per cent between March 2022 and December 2024. Food prices have increased by an average of 12 per cent, rents by 17 per cent and, incredibly, power and gas costs by 30 per cent. Over the past two years Australia has seen the largest fall in living standards in the developed world.
This is why one issue, the cost of living for ordinary Australians, is already established as the most important issue in the public’s mind and will drive the choice Australians make at the ballot box. The party that offers credible, achievable changes to assist household budgets will win the election.
Labor, as the incumbent government that has presided over this decline in living standards, is on the defensive. Based on current polls Labor is likely to form a minority government with the Greens and others after the election. Anthony Albanese will be trying to convince Australians he has a path to relieving the pressures on household budgets. But he will also attempt to leave enough wriggle-room to cut deals with the Greens and other crossbenchers.
It is why Labor is straddling a barbed-wire fence. Its commitment to the renewables time frame and other activist-left priorities places Labor in direct conflict with the changes needed to reduce cost pressures on households and small businesses. This will restrict Labor’s ability to offer a plan that voters find acceptable, and may well cost it the election.
The dramatic increase in cost of living is why the electorate is frustrated and volatile. And it is why Peter Dutton and the Coalition have an opportunity to achieve a historic win. At the end of budget week we have the mildest of offers from an incumbent government of 70 cents a day from the middle of next year. The Coalition is offering a mix of immediate fuel excise relief and changes to the gas sector designed to lower energy costs and assist households and small business.
The Coalition needs to gain 22 seats to form government – a very large hill to climb. But in recent times in state elections and by-elections we have seen very large swings away from Labor in some of the party’s traditional seats. These are the very seats particularly focused on their household costs, and it is why the fuel excise reduction and the gas announcement by the Coalition are such potent political policies for their candidates in these seats.
Budget week, on balance, goes to the Coalition. Labor will need to respond, or risk losing momentum. There is a real contest under way.
Brian Loughnane is a business and political strategic consultant. He was Coalition campaign director in four federal elections.
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