Vulnerable Anthony Albanese faces flash points home and abroad

US President Joe Biden, who arrives in Israel on Wednesday, will host Anthony Albanese for a state dinner at the White House next week. Picture: AFP

Anthony Albanese is confronting a tidal wave of economic, security and strategic flashpoints that will test his authority and leadership at a time of heightened domestic ­vulnerability after the voice referendum was emphatically rejected by voters.

The threat of global conflict intensifies every day with wars in the Middle East and Ukraine, China, Russia and Iran operating unprecedented foreign interference, cyber offensive and disinformation campaigns, and rising concerns about Islamic extremist violence.

The fracturing of geostrategic stability and alliances is happening at breakneck speed, driving up oil prices, heaping pressures on supply chains and threatening a global recession that Australia had hoped to avoid.

As the US and China jostle for global supremacy, supported by their proxies, the margins for error are at frightening narrow levels.

US President Joe Biden, who will host a lavish state dinner for the Prime Minister at the White House next week, arrives in Israel at a tinder box moment for the Middle East.

The octogenarian, who turns 81 next month, faces pressure-cooker negotiations amid concerns over his mental sharpness and physical health.

Unless plans change in the coming days, Albanese will travel to Washington next week followed by trips to China, the Cook Islands and San Francisco.

The stacked travel itinerary coincides with the Prime Minister struggling to manage domestic issues and reeling from a shattering blow to his mandate for sweeping Indigenous policy reforms.

He is also receiving disturbing updates from his top national security and economic advisers.

With rising expectations of a Melbourne Cup day rate rise on November 7, Reserve Bank of Australia governor Michele Bullock on Wednesday said “shock, after shock, after shock” was making the fight against inflation harder. Ahead of a consumer price index update next week, Bullock said the nation faced a “challenging economic environment” and warned that successive shocks were keeping inflation elevated and entrenched for longer.

Despite 12 interest rate hikes biting hard on finances, inflation remains sticky and the housing market increasingly volatile.

Following a meeting of Five Eyes intelligence chiefs in Palo Alto, California – and shortly after the Pentagon released evidence detailing “coercive and risky” acts by Chinese fighter jet pilots – ASIO director-general Mike Burgess on Wednesday joined FBI ­director Christopher Wray in accusing Beijing of unprecedented intellectual property theft.

The US-China relationship casts a long shadow over efforts by Albanese to develop a working relationship with Beijing while ­accelerating closer defence and strategic ties with Washington through the AUKUS pact.

Given the deteriorating state of world affairs, Albanese must cultivate and maintain deep connections with global leaders, particularly Biden and Chinese President Xi Jinping.

But the consecutive overseas trips complicate his re-engagement with Australian households and businesses facing higher interest rates, living and petrol costs, a housing crisis, and potentially a recession.

As international tensions stifle the government’s pivot back to the cost-of-living crisis, those closest to Albanese say he has suffered personal damage from the referendum defeat. Labor strategists are concerned about the residual fallout from the voice campaign.

Buying time to get his domestic agenda back on track, the PM has cut the parliamentary calendar to nine lower house sitting days in the final 10 weeks of the year, raising questions about Labor’s commitment to transparency.

ALP sources warn the expected hits to brand Albanese and Labor won’t show up immediately. There are fears some people grappling with cost-of-living pressures will stop listening to Albanese after he personally staked his leadership on the referendum push.

“In a cost-of-living crisis, it is particularly difficult to advocate for constitutional reform. We’re going to take a few days to assess things. It is an interesting position with the PM being so close to the whole exercise and with the party machine having to step in and deliver support on the ground,” a Labor source said.

With the government shifting focus to the economy and national security, Peter Dutton is embracing being back in the game. A senior Liberal source, who points to recent missteps including the Covid inquiry and Qantas, said the referendum defeat was “a heavy loss any way you look at it”.

“The voice dominated the whole year and it remains to be seen just how badly and how quickly that residual effect on Albanese is because these events often build up over time,” they said.

“There won’t be baseball bats out tomorrow but it goes to his judgment, competency and priorities – choosing the wrong priorities at a time when people are doing it tough.

“Is it going to change national polling overnight? Probably not. But it’s certainly a heavy defeat and that’s never good for an incumbent Prime Minister. It’s very good for Peter to be on the side of more than 60 per cent of voters.”

Facing mounting internal pressure, Albanese is tasked with re-engaging voters and convincing them that Labor is laser-focused on their core priorities.