Albanese takes credit but tests loom

Anthony Albanese claims political ownership of the Fair Work Commission’s decision to lift the minimum wage and the knock-on effects.

Albanese’s post-election honeymoon, where Labor blames the Coalition for the ­energy crisis and cost-of-living pressures, will end on October 25 when Jim Chalmers hands down his first budget. Picture: NCA NewsWire / Dan Peled

Anthony Albanese has claimed political ownership of the Fair Work Commission’s decision to lift the minimum wage and the knock-on effects it will deliver amid soaring inflation, a national energy crisis and rising interest rates.

The Prime Minister was right to argue during the election campaign in favour of a wage rise for low-income workers to combat inflation, flatlining wages and ­incoming pain for mortgage holders and families struggling to pay for groceries and petrol.

But difficult economic headwinds lie ahead. Albanese’s post-election honeymoon, where Labor blames the Coalition for the ­energy crisis and cost-of-living pressures, will end on October 25 when Jim Chalmers hands down his first budget under the backdrop of a looming US ­recession, war in Ukraine and supply chain disruptions.

As promised, Labor’s budget will focus on fiscal restraint, boosting productivity and easing cost-of-living pressures that could extend well into next year.

Albanese and Chalmers face an increasingly challenging environment where their productivity and climate change agendas will be hamstrung by ­deteriorating economic and ­energy settings.

Union leaders will legitim­ately argue the FWC decision to lift the minimum wage for 184,000 Australians by 5.2 per cent and 4.6 per cent for 2.5 million workers on higher award rates is too low.

But the decision takes into ­account the ability of employers to cover the costs as they confront inflationary pressures and soaring electricity prices.

The Coalition welcomed the pay bump for low-income earners at the same time as opposition employment spokeswoman Michaelia Cash foreshadowed its political attack lines.

Amid expectations that global pressures will escalate in coming months, Opposition Leader Peter Dutton will focus on a predicted economic growth slump and its impact on small businesses and the unemployment rate.

Adopting the traditional conservative approach, Cash said there was “no point of having a pay rise” if Australians’ lost their jobs. Dutton will need to temper an all-out negative campaign with Albanese’s more optimistic tone about the nation’s future.

If business leaders such as Australian Industry Group chief executive Innes Willox are right – that the wage hike will “add fuel to the inflation fire” – the ­Coalition will heap pressure on Labor if it doesn’t contain budgetary spending and fails to support Australians through the current crises.

While the Albanese government’s cautious approach to pulling gas triggers and overreaching in its initial response to economic and energy pressures is the smart move three weeks after the election, big decisions lie ahead.

The October budget looms as the first real test for Labor as it ­attempts to shed its modern history of opting for the quick fixes and cash splashes.

Albanese has outlined a vision where Labor governs for the long term.

To succeed, he must maintain his commitment to middle Australia and manage the expectations of Labor stakeholders who believe their interests are more important than those of mainstream voters.