Australia’s depressing retreat from big picture politics

Anthony Albanese is merely the latest in a line of Australian leaders across the past 17 years whose legacy is modest improvements but busted dreams.

he Prime Minister has tried to govern under his rubric of ‘safe change’ yet his reward this week was slipping into negative territory in Newspoll for the first time. 

The brief, bright episode of Australian exceptionalism is dying, slowly but decisively. The current focus of its demise is Anthony Albanese, yet he is merely the latest in a line of Australian leaders across the past 17 years whose legacy is modest improvements but busted dreams. The contemporary story of Australia is underperformance by governments and sullen suspicion by public. The nation needs bold, breakout policies but the electorate is wary of national-interest reforms or big changes, preferring instead single-issue causes and pursuit of narrow sectional interests. Big-picture politics is in retreat.

The voters may bemoan weak leadership but they are terrified of strong leadership. The upshot is a model of mediocrity by mutual consent. The Prime Minister has tried to govern under his rubric of “safe change” yet his reward this week was slipping into negative territory in Newspoll for the first time. 

Opposition Leader Peter Dutton and Prime Minister Anthony Albanese at St Andrews Presbyterian church in Canberra. Picture: NCA NewsWire / Martin Ollman

The debate will intensify over whether Albanese is fit for the job, in sufficient command of policy and, more surprisingly, whether he is losing his long-prized political touch. The spectre of underperformance is going to plague him just as it plagued the previous three former Liberal prime ministers, Tony Abbott, Malcolm Turnbull and Scott Morrison. The fear is of the Australian leadership malaise extending into yet another government.

How long since Australia had a genuinely successful long-run national government? Or is that a thing of the past?

Australia these days is run by the centre-left that enjoys a majority of state and federal governments. Yet the balance sheet is big government, high spending, weak productivity, poor growth and the rhetoric of compassion – a cycle that works for some time but ultimately doesn’t work.

Albanese has tried to govern under his rubric of ‘safe change’ yet his reward this week was slipping into negative territory. Picture: Nikki Davis-Jones

The Australian public is less forgiving, more populist, more impatient than before. It is more critical of governments but deeply sceptical of oppositions. But give Albanese his due. Next year he is likely to become the first Prime Minister since John Howard in 2004 to be re-elected from office. That follows four terms over 2007 to 2019 in which four successive prime ministers were deposed by their own parties. Yet any Albanese re-election will surely be compromised by the prospect of a minority Labor government.

For Albanese, the symbolism this week was bleak. Newspoll showed the Peter Dutton-led opposition in front for the first time since the 2022 election with a narrow 51-49 per cent two-party-preferred lead.

This coincided with the anniversary of the defeat of the voice referendum, the single most important failure so far of Albanese as a conviction leader, and the revelation of Albanese’s $4.3m joint purchase with his fiancee of a clifftop home, which clashed with the ethos of a nation mired in a cost-of-living struggle.

Finally, the good news from the labour market, with unemployment still relatively low at 4.1 per cent, suggested an interest rate cut remained far in the future.

The defeat of the voice referendum is the single most important failure so far of Albanese. Picture: Tim Hunter

The optics from the home purchase were disastrous, but even worse was the inevitable implication – that the timetable was being drawn for Albanese’s political sunset, the impression being next year’s election might be his last. He denies this, since no prime minister can tolerate such an idea to form in the public’s mind. But it is now lodged.

The urgent task for Labor is to hold its nerve, stay disciplined and direct itself to a meaningful election agenda. Above all, Albanese needs to rekindle a sense of leadership purpose.

Don’t think Newspoll points to a Dutton victory. He doesn’t win on these numbers. The Coalition starts too far behind. The large crossbench means it is easy for Albanese to fall into minority government and hard for Dutton to win enough seats to get commissioned as prime minister.

But there’s another factor. The divisive political culture that assails Albanese is guaranteed to visit its destructive impact on Dutton long before election day. The time of maximum vulnerability for Dutton is when the opposition begins to unveil its policies, giving Labor and the progressive media the opportunity to crank up their scare campaigns.

Lethal attacks on Albanese – at which Dutton specialises – won’t defeat Labor. The Coalition needs to show it is match-fit for office and few believe this is the situation.

The trap for the Coalition is apparent: if its policies are bold, Labor will run the mother of all negative campaigns, and if its policies are modest Labor will say the opposition has nothing to contribute.

Don’t think Newspoll points to a Peter Dutton victory. Picture: NewsWire / Martin Ollman

Don’t think the nightmare job of seeing off high inflation is the chief policy obstacle for Labor. Sure, cost of living is the public’s main concern going into an election year. But Labor’s systemic challenge is its absence of a long-run growth strategy. This is the coming crisis of Australian progressivism – it talks up renewables, the dividend from the energy transition, the Future Made in Australia project, expanding the care economy, more childcare and the merits of bigger government, but the pivotal flaw is the absence of a tenable growth agenda.

Progressive politics cannot work without ambitious economic growth and it’s not on the horizon. Economist Steven Hamilton has identified the coming Labor crisis: “Australia’s living standards have improved very little in the past decade and have actually gone backwards in the past couple of years. Our economy is not on a path that will generate the growth dividend to pay for the things progressives want. This way lies ruin.”

This represents a political and intellectual crisis for the centre-left. The Greens and teals don’t worry because they don’t have to govern. But the bind for Labor is diabolical because it knows without strong growth its mission will fail. Meanwhile, the tragedy is the denial of history now under way.

As Hamilton says, the current situation “represents an unlearning of the hard-learnt lessons of the past”. The glory days when Australian reformism largely led the Western world under the Labor dynamic of Hawke-Keating and the Liberal dynamic of Howard-Costello is long gone.

Both parties engage in ritualistic tributes to the age of Australian exceptionalism yet are incapable of recapturing its essence. The caravan of history has moved on. If you feel impatient about Albanese’s lack of drive in his first term, get ready for weaker, more compromised government over 2025-28.

Albanese is likely to become the first Prime Minister since John Howard in 2004 to be re-elected from office. Picture: Graham Crouch

Within Labor, nostalgia is rife. The frustration of the elders is a siren call. In their different ways, Paul Keating, Bill Kelty, Gareth Evans and Barry Jones, while not wanting to undermine the government, seem out of their minds about the mediocrity of the present. But they should not be – the roots of Labor decline are long and deep, reinforced by the fickleness of the political cycle.

Indeed, it is only two years since Albanese was heralded as an astute gut-instinct politician, a veteran who transitioned from insurgent to pragmatist, a battler in his personal life who grasped the Aussie values of egalitarianism and justice. In 2022 Albanese promised not radical change, just inclusive, stable, competent government. He almost sounded like a Tory.

Was all that just two years ago? Yet this week the commentary hovered around a question that barely dared speak its name: “Is Albanese finished?” No, he’s not. Albo is a fighter, typically underestimated. But, as happened with Abbott, Turnbull and Morrison, the demands of the prime ministership expose the limitations of every incumbent and that is compounded by the unique difficulties of the age.

The Australian public doesn’t trust the political class and is suspicious of most elites, often with good reason. It will back incremental self-interested change at the margin. But what is gone is collective support for major national-interest reforms that lift economic growth, and by lifting all boats locate everybody higher on the water. That has disappeared.

The mutual instinct that “we’re all in this together” has evaporated. It is replaced by an introspective protectionism, a sense that “I’ll preserve what I’ve got”. When someone else or some group does well, the instinct is to think “I’ve been ripped off” or “who took advantage of me?”. These are the divisions that arise from stagnant wages and progressive identity politics.

But they are the product of populism. The poison of populism exists only in grievance, in promoting the story of a hardworking people being betrayed by elites who serve their own interests. Once this takes hold, enlightened democratic opinion is jeopardised. Australia is not yet in that condition but it is perhaps not too far away.

The bigger story is that Albanese and Dutton are casualties of the structural and cultural revolution transforming our politics; witness the decline in the primary votes of the parties of government. Newspoll has the Labor primary at 31 per cent, down from its dismal low of 32.6 per cent last election, raising the historic question: can Labor endure as a majority governing party in its own right?

The Coalition primary was at 38 per cent, up from its 35.7 per cent last election, the lowest Coalition primary since Robert Menzies formed the Liberal Party in 1944. The trends show both major parties as losers in terms of overall support.

Even if Albanese survives as a minority prime minister, that’s a monumental failure given his comments after the 2022 election that he envisaged a long-term Labor government. Minority government will become a breeding ground for internal dissent, with the probability that leadership strife will return.

Labor suffers from the cult it perpetrated in opposition: attacking the character of the leader. While Morrison’s blunders opened the door for this attack, Labor’s assault on Morrison’s character became the issue that finished his government. The Liberals have not forgotten and can smell Albanese’s vulnerability. Comparisons between Albanese’s house purchase and Morrison’s Hawaiian holiday are far-fetched yet the link is dangerous enough.

Opposition Treasury spokesman Angus Taylor in his Warren Hogan Memorial Lecture this week offered the decisive economic framework the Coalition will take to the next election. It is mostly pro-market conventional but, significantly, it repudiates the rising centre-right state interventionist populism typified by Donald Trump that runs through right-wing parties across the West.

Taylor sketched the principles, not the policies. His agenda involved rejection of big government, support for market forces, a growth agenda based on increased productivity, a return to fiscal orthodoxy, limits on tax as a proportion of GDP, a budget balance over the medium term, a reduction of counter-productive regulation, more competition, and an energy transition based on unlocking more gas and promoting nuclear power.

Taylor identified housing as a priority, said there was “no silver bullet” solution, pledged action on supply and repeated the Liberal stance of allowing people to access their superannuation for a deposit. On tax, he said the Coalition tax reform test was about “growing the pie” and boosting investment.

It is time for the opposition to put some policy detail behind its ideological critique. With the public suffering from prolonged inflation eroding living standards, Taylor said: “We stand at a crossroads like we did over 40 years ago. Down one path lies greater government control, more regulation and higher taxes. Down the other, a future fuelled by private innovation, economic freedom, effective government services and a healthy low-inflation economy.”

Scott Morrison’s Hawaiian holiday. Picture: Twitter

Get ready for a campaign riddled with economic ideology. The Liberals, however, have not prepared the ground for bold policies. There are no such flags on the horizon. Will they have the courage to back themselves and offer something meaningful? The presumption, at present, is their bite won’t match their bark. But having declared a “crossroads” moment and invoking the Australian exceptionalism reforms that began 40 years ago, Taylor has raised expectations.

Have the Liberals done the hard work to seek a strong policy mandate? If they disappoint, the judgment on them will be harsh. The risk is that election 2025 will disappoint, with neither Labor nor Coalition rising to the challenge with bold policy agendas.

Appealing to Labor in his September 5 lunch speech, former union leader and reform age champion Bill Kelty said: “The Labor Party is a long way from done but at the moment it is mired in mediocrity. We need a Labor Party agenda in which the big issues are confronted.” Yet Kelty was honest enough to sketch the magnitude of the problem.

Asking what accounted for the government’s plight, he answered: “The majority of working people have had a savage reduction in their living standards. Since the GFC the reduction in real average earnings is between 5 to 9 per cent, depending upon consumption patterns. Since Covid the reduction in living standards has been even greater for a vast bulk of working people. Real wages have fallen and real taxes have increased.”

At some time there must be a circuit-breaker – a departure point where the country pivots to confront and respond to the challenges it faces. We await that moment.