As parliament resumes, Anthony Albanese changes tack on RBA

Anthony Albanese during question time on Monday. Picture: NewsWire / Martin Ollman

Anthony Albanese has clearly decided it’s not a good idea to say Michele Bullock, as Reserve Bank governor, didn’t say something that she clearly did.

In the face of an incredulous reaction to the Prime Minister’s denial last week, the integrity and credibility of the independent Reserve Bank and a crash in public support for Labor’s economic management, Albanese has changed his tactics towards the RBA.

In what seemed like a good idea, after the RBA had just decided not to cut interest rates because inflation was higher because of “spending announcements by federal and state and territory governments”, Albanese simply said Bullock didn’t say that.

In a tense and volatile few days Jim Chalmers, Albanese and Labor’s grand economic plan were at odds with the governor and board of the RBA.

A dispute between the central bank and the government is dangerous territory at any time but when economic management, inflation and the cost-of-living are the top political priorities there is no room for a prime minister and treasurer to be on the wrong side of a determined, independent and tough-minded RBA governor.

Albanese’s blatant denial of the withering appraisal of the cause for inflation and interest rates being higher and longer than forecast put him at direct odds with Bullock’s public position.

As treasurer, Chalmers was trying to massage away the stinging assessment and shredding of Labor’s economic plans and forecasts but, as PM, Albanese went hard on denial and started casting the RBA as an uncaring organisation inflicting pain on mortgage holders and households.

Denial and blame shifting was the name of Albanese’s game.

But, with the resumption of parliament and the inevitable question from Peter Dutton about Albanese’s risible denial, the tactics changed: Albanese didn’t repeat his denial and instead looked for positive statements from Bullock about what the government was doing.

Bullock’s declaration that the government has a job to do and “I have a job to do” was used to keep the finger pointed at the RBA as the responsible body for interest rates but the emphasis shifted to what Labor is doing “to provide services and infrastructure for the Australian people”.

Albanese had backed away and found a more positive argument for government spending. Governments don’t win arguments against the Reserve Bank and Albanese showed wise – if belated – discretion.