Labor’s voice referendum didn’t break Dutton – it made him
Peter Dutton’s calm, commonsense opposition to the voice – even as he was being attacked – cemented his relationship with middle Australia, which identified with him and felt the same sneering insults. This week, he faces another huge challenge.
The next three budget parliamentary sitting days are the beginning of the making or breaking of Anthony Albanese, Peter Dutton and Jim Chalmers in the short term and Australia in the longer term.
It is extraordinary that going into the last sitting of the parliament before an election a first-term Labor government is behind in the polls, generally assumed to be heading into minority government and using a personal attack on Dutton as Opposition Leader and a massive spending program as its bases for re-election.
Labor has no positive narrative with which to weave an argument for re-election based on first-term achievements or fulfilled promises and looks instead to say things have been better under Labor than they were under the previous Coalition government and will be worse if the Liberals are re-elected.
There are positive achievements on real wages, employment and inflation, but they are mired in counterproductive reactions and lacked the real focus they required from day one of the Albanese government.
This has come about because the Prime Minister, after being elected in 2022 on a promise to relieve the cost of living, immediately led the new Labor government into a grand distraction over the disastrously failed referendum on an Indigenous voice to parliament.
It also has come about because the Opposition Leader, against all expectations, held together a badly beaten Coalition, patiently picked fights he thought he could win, didn’t allow himself to be baited or bullied into playing to Labor’s agenda, used a nuclear energy policy to bridge some differences over energy and meeting net-zero carbon emissions, and connected with middle Australia in the suburbs and regions.
Dutton is now under pressure to provide an alternative government and not just wait for Albanese to fall over, in the reasonable assumption that if the Coalition is elected in its own right it won’t be just another government with a small target and no mandate for necessary change.
Albanese believed the Indigenous voice to parliament referendum would be the early political downfall of Dutton, who would be seen to be old-fashioned, too conservative and out of touch with modern Australia. Albanese was dead wrong.
Indeed, Dutton’s calm, commonsense opposition to the referendum even as he was being attacked cemented his relationship with middle Australia, which identified with him and felt the same sneering insults.
Labor’s referendum didn’t break Dutton, it made him – and delivered the unlikely threat he is today.
Just as there is an assumption that a two-seat majority for Albanese going into this election, with a swing against Labor, won’t be enough to hang on to majority government, there is an assumption that Dutton can’t win the necessary 20 seats he needs to form majority government.
Historically low support for the ALP, lower support for the Coalition than is necessary for election, redistributions, a fracturing of institutional support, demographic change, reluctant conservative voters emboldened by the referendum defeat, and unpredictable support for third parties – the Greens, Climate 200 independents and Muslim Voice – make this election almost impossible to predict.
Unlike the 2023 referendum result, the 2025 election is bound to be close. A minority government is likely, and any outright victory for the ALP or the Coalition is unlikely to be a landslide.
Of course, the subject matter of the referendum is not an issue for next week’s parliament or the election but the issues of political judgment, being in touch with voters, personal conviction, the power to persuade (or not), strength of leadership and ideological attachment all resonate through the current issues that will decide the election.
Not one poll, politician or party – even the Climate 200 teal independents representing Australia’s richest electorates – doesn’t recognise that the high cost of living is everyone’s No.1 priority and that will, again, decide the election.
Although the daily debate has moved decidedly back to the cost of living, with price inflation keeping people well aware of the long-term effects of economic pressures long after headline inflation moderates, it is not the only issue that will sway voters’ minds during the all-important campaign.
The disruption on global trade and defence arising from Donald Trump’s election, with warnings of possible recession in the US and a Chinese economic downturn, and calls for huge increases in defence spending beyond the AUKUS nuclear-powered submarine program, takes concerns about cost of living to a new and broader plane.
Albanese has had difficulties in the past when he has not taken up issues of Chinese naval aggression personally with Beijing’s leadership, and his lack of awareness about the People’s Liberation Army Navy task group circumnavigation of Australia, including a live-fire exercise reported first by a Virgin Airlines pilot, has perplexed the public.
The Prime Minister’s readiness to offer Australian boots on the ground in Ukraine, joining a European coalition of the willing, may seem popular but lacks proportion when revelations of failing submarine maintenance mean a capability gap in dealing with future Chinese assertiveness at sea.
But Albanese, intent on targeting Dutton, wants to be seen to be standing up to Trump over tariffs and said this week: “The contrast can’t be starker between my government that stands up for Australian interests and Peter Dutton, who last week had an opportunity to actually stand up for Australia, and instead chose to back in the Trump administration with their tariffs rather than standing up for Australian jobs and Australian industry.”
Trump’s global impact is also felt on the basic tenet of belief for Labor that renewable energy is the answer to delivering targeted carbon emission cuts by 2030 and 2050. Despite the obvious failures of industry ventures on green hydrogen, offshore wind farms, fire danger on solar farms, the pressing need to increase gas supply, the extension of coal-fired power stations and failed deadlines on transmission lines, there is no sign of any change from Albanese or his Treasurer.
Indeed, in his major pre-budget speech in Brisbane this week, Chalmers put the carbon-free economy at the heart of our future at a time of churn and change, saying: “We’ll do that by investing in our competitive advantages. By looking for opportunities to join with our partners in new, resilient supply chains. By becoming an indispensable part of the net-zero economy.”
Having won the 2022 election brandishing a $2 coin as a symbol of Labor’s intent to lift wages and cut taxes while the Scott Morrison-led Coalition wanted to hold workers back, Labor lurched into a referendum campaign that couldn’t have been further from the day-to-day thoughts of middle Australia struggling with rising power, fuel, grocery and housing prices.
For the first half of the term ALP senators and MPs campaigned as one on an issue that was supported by the corporate, affluent and academic elite but was doomed to fail across the nation as ordinary Australians, including in Labor electorates, rejected the concept.
The 2023 referendum demonstrated how out of touch Albanese was with the public as cost-of-living pressure rose with inflation and interest rates and so many of Labor’s promises were unfulfilled or unattainable on energy prices, housing and renewable energy projects.
Many of Labor’s big government solutions to lift living standards and wages – such as taxpayer-funded wage rises for care economy workers, changed industrial laws, regulation, renewable energy subsidies, massive increases in public servants and rebates to make up for the failed 2022 promise to cut power bills by $275 – served to keep underlying inflation higher for longer.
Facing the final parliamentary sitting of his first-term government before calling the May election, Albanese has to use this last chance to regather lost momentum, lift drastically low Labor support, take advantage of his incumbency and, in increasingly uncertain global circumstances, make the argument that while people are hurting under the pressure of cost of living they will be worse off under a Coalition government.
Albanese goes into the election with a majority of just two seats that must be held or improved on to avoid outright defeat or the enervating and destructive political limbo of minority government, which would put his leadership in doubt.
Dutton has to recapture the extraordinary momentum he developed in just one term in opposition after the defeat of a long-term Coalition government, turn the personal attacks on him back against Albanese’s “weak leadership”, maintain discipline in his ranks, prosecute the case in this budget week that people are “worse off” now than when Labor was elected in 2022, and aim for the almost impossible target of winning 20 seats to form a Liberal government in its own right.
The Opposition Leader goes into the election with an openly declared claim he can win but he has to temper enthusiasm with the reality and the politically potent argument that the likeliest outcome based on current polling is a minority Labor-Greens-teal government reliant on the Greens in the Senate.
Next week Dutton’s big challenge is trying to overcome the impetus of a pre-election budget and delivering a budget-in-reply that Albanese demands should be an election manifesto.
Dutton has frustrated Albanese – and several Liberals – with his determination not to produce detailed policies until the election campaign proper. Even the nuclear policy still lacks crucial detail.
Next Thursday in the Opposition Leader’s traditional budget-in-reply speech Dutton will again hold back on expansive policy and more likely concentrate on one or two broader policies – such as immigration – that he has conflated into a cost-of-living and housing crisis issue.
This week Dutton also tried to “change the conversation” and zeroed in on organised crime in the Victorian building industry and linked the CFMEU with Labor political donations while highlighting violent anti-Semitic acts in Melbourne. Law and order is another issue that rates below cost of living but will be crucial in particular regions.
But Dutton, after a couple of slips and the inevitable fall in support as the election gets closer, is running out of time and is going to have to make those make-or-break commitments.
If Dutton emulates Tony Abbott and wins enough seats to turn Labor into a minority government after just one term his leadership should be safe and form the basis for a two-term strategy against a weakened government at a time of grave economic, political and strategic uncertainty.
Chalmers’ immediate task is to bring down a budget on Tuesday – something many in Labor felt would not happen – within two weeks of an election being called.
Chalmers faces the most difficult budget formulation since Peter Costello’s tough turn-around budget after the 1996 election of the Howard government.
But Costello was bringing down his first budget for a new government in its first term to recast the deficits of Labor’s recession and was three years from an election.
Chalmers’ budget next Tuesday is his fourth, at the end of the term, on election eve and must address everyone’s No.1 priority of relieving cost-of-living pressure with more direct relief from soaring energy costs.
This week Chalmers warned there would be “fewer surprises” in the budget given that Albanese has been campaigning since January, spending at least a $1bn a week – $689m just on Thursday for cheaper medicines to add to the $8.5bn Medicare package – and some would be kept back for the campaign.
At the same time Chalmers has to at least try to put forward a credible economic plan to keep inflation down as the OECD predicts that economic uncertainty in the US and China is going to lower growth in Australia and warns of longer and higher inflation if there is no proper economic and fiscal policy.
In other words Chalmers, in his fourth budget, which will forecast a decade of deficits, has to save Labor’s bacon with direct relief and rebates for pensioners, students, jobseekers and renters, massive infrastructure spending and no plans to rein in bracket creep in the personal income tax system while arguing his economic plan is better than Dutton’s.
For Chalmers, the weight of crafting a budget that pleases everyone to prevent Labor from becoming only the second one-term government since the Depression has the advantage of being seen to lift Labor out of the doldrums if it works but also has the disadvantage of copping the blame for a loss if it doesn’t.
Next week’s budget and three parliamentary sitting days will not decide the outcome of the election or the fate of Albanese, Dutton, Chalmers and the nation – too much has gone before and too much is yet to come in the campaign – but, for a budget that supposedly wasn’t meant to happen, there will be more riding on it than any budget for at least the past three decades.
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