Outlook Conference: Coalition’s golden chance to win back economic territory

Opposition Treasury spokesman Angus Taylor at the National Press Club in Canberra on Wednesday. Picture: NCA NewsWire / Gary Ramage

Labor and the Coalition are now engaged in a renewed battle for territory over competing economic credentials.

For Peter Dutton, it is a legacy issue. Reclaiming ground. The Liberal Party cannot hope to rebuild until it works out its narrative for the past.

For Anthony Albanese, it’s about defending the future.

Both the Opposition Leader and his treasury spokesman Angus Taylor have, in the space of a week, mounted a new and more spirited case for the success of the Coalition’s pandemic management.

Their budget reply speeches have been heavy on record.

“Now, not every decision during Covid was perfect,” Taylor told the National Press Club on Wednesday.

“But Australia’s economic recovery is a testament to the Coalition’s economic management.

“The Coalition left Labor with a strong economy and a rapidly improving budget position – in far better shape than most thought was possible even a short time ago.”

Up until this, the argument has lacked conviction from the Coalition side.

Dutton clearly believes that Labor’s budget has now afforded the Coalition a strategic opportunity to reclaim economic territory, point to its own economic success in government while handing ownership of the inflation crisis to the new government.

Having been on the offensive since the election over what it claims was a wasted decade, Labor now finds itself on the defensive over the budget.

This marks a notable shift in the political battle. Labor, up until now, has got away with blaming the former government for a debt and deficit dilemma and stagnant wage growth.

For Albanese and Treasurer Jim Chalmers, the task ahead is now shielding Labor politically from the economic damage – both in terms of household budgets and slowing growth – that is coming.

In addressing The Australian’s Outlook Conference, both defended the decision not to splash cash around to ease cost-of-living pressure, rightly claiming to do so would only have thrown fuel on the fire and added to the inflationary problem.

The key message that Albanese and Chalmers know they must re-enforce is that the budget – however unfavourably it has been viewed by the punters – was a product of “responsible” economic management.

Albanese is taking the same approach to economic management as he is to national security.

Labor must hold the line, no matter what.

The Prime Minister knows that it is on these two issues that present historical vulnerabilities for Labor.

To maintain this will ultimately require a new level of discipline within the Labor ranks.

Albanese’s political strategy can be viewed through the prism of 2025. He has identified the risk issues for the next election, and in terms of the politics, is working back from there.

If inflation starts coming back down next year, he will be able to claim the government had a big hand in it, bolstering the economic credentials he is seeking to establish as a long-term proposition over short-term sugar hits, as popular as they might be.