It’s the economy, stupid. Australian inflation is back up and the national mood is as sour as the Indigenous Voice to Parliament referendum campaign.
After peaking at 8% last year, the rate of consumer price inflation has been falling — but all too slowly. Consumers and the Reserve Bank (RBA) agree: inflation is still far too high. What’s more, progress has stalled. The rate of inflation was down to 4.9% in July, but in the latest data it has popped back up 5.2%.
As the next chart shows, the recent uptick is largely due to petrol inflation. Petrol prices soared over $2 a litre in August, leaving petrol 13% higher through the year.
The more prices rise, the less a dollar can buy. That’s stressful. Living standards are falling as the money we earn — and our savings — buy less. That’s even more true for households with a mortgage. Mortgages aren’t included in the consumer price index, and the cost of servicing one has soared.
Many households are under a pinch right now. No wonder the consumer confidence indices are showing extreme gloom.
It’s a bad time to run a referendum that asks Australians to think about other people, to be generous, to embrace the risk of change. I believe the Yes vote could win in this country at a different time. There’s a rump who’ll never vote for it, and an informed clique who would always vote for it, but then there’s a vast middle for whom Indigenous issues are far from everyday consideration. These people aren’t bad, just not in a giving mood.
At the start of 2023, polling showed about a quarter of Australians were undecided on how they would vote on the Voice. More recent polling shows many of those uncertain voters have broken for No. That coincides with rising interest rates and the collapse of consumer confidence in the chart above.
Economic stress drives political outcomes. The clearest recent example is Europe, where Germany, with low unemployment, elected the moderate Angela Merkel chancellor four times in a row, while Italy, where unemployment rose over 13%, has swung to the right-wing populist Giorgia Meloni.
When times are hard, people care about the in-group — they resist inclusivity. An invitation to widen the circle of people they care about is not likely to be popular.
When Anthony Albanese became prime minister in May 2022, and promised in his election night speech to progress reconciliation, interest rates were just 0.35%, and the argument that inflation was “transitory” seemed plausible. His intent was good, and with unemployment sitting at 3.5% and the lethality of COVID falling, it was reasonable to hope the door was opening on a period of optimism.
It wasn’t.
Albanese’s popularity is, of course, tied to inflation and the referendum. His approval ratings remain higher than Opposition Leader Peter Dutton’s but have fallen into the negative. If the referendum fails and inflation drags out to 2025, it is hard to see his approval lifting.
The RBA projects inflation to be above the target band until the end of 2025. That means the next federal election campaign will take place after three years of non-stop rapid price rises. The opposition will be able to claim that the government didn’t do enough to prevent them while pursuing a failed referendum.
Despite the economic environment, Dutton is unlikely to win that election. His personal unpopularity, combined with the fact Albanese is still in his first term, means a Labor victory in 2025 is most likely. But a healthy margin like 2022’s, where Labor could form a majority government, is not guaranteed. Labor has just 78 of the 151 seats in the House of Representatives, barely above half. Displeasure with major parties could well be a theme repeated in 2025.
The Greens are running hard on cost of living while Albanese pursues reconciliation. The Victorian Greens are demanding a price freeze on groceries. Barely a day goes by when Queensland Greens wunderkind Max Chandler-Mather isn’t in the news on housing.
Renters are struggling especially hard as rental markets get extremely tight. Rents are one of the few categories where inflation has not peaked and is still on the upswing. The Greens are making great political capital from this.
Greens Leader Adam Bandt said recently: “Renters are powerful and the Greens are the party of renters. We have won more money for housing for renters, and rent control is next. Renters have watched on in horror as Labor has refused to cap and freeze soaring rents. I say this to Labor: if you continue to ignore renters, your political pain has just begun.”
Bandt seems to have his finger on the pulse of Australia: we’re stuck on cost of living right now. His party may be the great beneficiary.
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Jason, its always a bad time for a Federal referendum, only about 15% of them have got up since Federation. And they have no chance without bipartisan support which was never going to happen for the forthcoming one. Makes you wonder about a lot of things, including the political nous of Albo. Would have been smarter to legislate the Voice and perhaps have a referendum down the track once all the conspiracy nonsense has been disproved.
It’s a real mystery to me what was going through Albanese’s head in calling the referendum. Did he see the high levels of support early on and assume he could write history and win the referendum without bipartisan support?
It would have been hugely advantageous to quietly seek bipartisan support early on. If they got it then they could have held the opposition to it and probably won the referendum. If Dutton refused, use that refusal to bludgeon the opposition and refuse to hold a referendum blaming Dutton personally and reap the political rewards as a result.
As you say, one wonders about Albanese’s political capacity at times.
Albo could have waited until Dutton is replaced by a more moderate leader. It’s got to happen at some stage, he’s electoral poison.
Most people have empathy, whether or not they also have money will not affect their vote. The question is, how swayed are they by the bs of the Dutton machine? Albanese has been criticised for having the referendum when in fact it is the LNP’s failure that stands out as terminally disgusting.
And the enablers inc. RW MSM cyclical or regular messaging over the long term, used to target above median age rusted on audiences for anti-ALP votes whether cost of living, rental, inflation, border or migration, now indigenous recognition ‘crises’….. Brexit and Trump for many were reactionary kick backs against the governments and media messaging of the day; too easy.
From handing out how-to-vote flyers at a number of elections I get the impression that a lot of politically disengaged people resent having to vote. I don’t think it’s much of a stretch to suggest that if politically-disengaged people are feeling generally resentful at being under-resourced, they’re more likely to react by voting negatively. Along the lines of, ‘the system is rigged, so why support it?’
My ex-wife says it’s all bs anyway, so she always votes informal. We had a long discussion once about what is important in life. Her view boiled down to relationships, and fashion. After a lot of thought, when I asked which was the most important, she said, “Fashion”.
I suppose that she felt that she could always count on fashion, always rely on it. Whereas the other not so much (which is a bit of a joke, all things considered). Anyway, what I’m saying is that reliability is a big deal, and the thought of voting for some stranger who you fully expect will let you down is anathema. And let’s face it, if we all registered a donkey vote things would have to change.
So you’re saying that a whole bunch of people voting No to something nice for Indigenous people are also likely to be putting their hands out for the government to do something nice for them.
Perhaps.
But the Greens’ gaslighting on renting is next level.
We all know what the problem is: bring 2000 newcomers into the country each day in the midst of a housing crisis and renting will be tough.
Asked about whether immigration was contributing to the problem the boy wonderkind responded “Australia was built on immigration”.
Sweet Jesus.
So what do the Greens stand for? Open borders or homeless Australians?
Sooner or later the penny will drop.
The current level of immigration is an inequality machine.
All the undergraduate bromides about dog whistling, xenophobia etc change nothing.
Can’t help but agree. The current crop of immigrants are not the skilled workers we desperately need. There are still far too many students and uni graduates not really working in their field of study but are here to set up base and use this country as a second home for their progeny with all the benefits this country has to offer and their home country doesn’t – free education, free healthcare (Medicare), better public transport, rule of law, less corrupt cops, civil peace not civil war.
The current crop of Greens are champagne socialists, and should change the name of the party.
> The current level of immigration is an inequality machine.
Well said ??
So emojis became question marks.
Those were meant to be claps.
In the recent housing forum MCM held, he admitted there is a “hard limit” in the amount of people we can accept. So where’s the limit MCM? According to the evidence we’re there already.
In other words, you are saying that voters are treating this as akin to a by-election: they can kick the government without ending it.