Can Labor move past the blame game and govern the country? - The Centre for Independent Studies
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Can Labor move past the blame game and govern the country?

The period immediately following an election is about as good as it gets for a majority government; especially one that has been in opposition for an extended period of time.

You get hailed around the country as the harbinger of much-needed change. Many are anxious to openly distance themselves from the previous government and be seen to be supporting the new regime.

Supporters of your party genuflect in the direction of the latest messiah, even if they once claimed you were just a very naughty boy.

Prime Minister Albanese hasn’t missed out. He and his foreign minister have begun their term dancing to acclaim on the world stage. France is again willing to talk to us. The Pacific Islands are feeling the love. “The anti-climate change dinosaurs are finally gone,” you can imagine them telling an international audience.

They even moved quickly to put the cross-bench back in its place, carving back their staffing allowance —, a decision with minimal benefit but a significant probability of backfiring in the future.

But every new government finds a time when the rhetorical flourishes of opposition run up against the reality of running the country.

Labor may yet find its honeymoon period is unusually short; confronted by a confluence of events partly of their making (for example their promises on referenda), partly not (inflation).

First, Labor are not starting with a high primary vote. And by making themselves such a small target during the campaign, their mandate is rather limited. Far more so than the scope of the challenges they are facing.

One of the biggest — whether they appreciate this fact or not — is the inflation crisis. This is much bigger than just the CPI: it includes the cost of energy, sluggish productivity and fiscal stability among other issues.

We’ve been in a low inflation environment effectively since the RBA gained independence in the 1990s. Huge swathes of the electorate have never seen the devastating effects that persistent high inflation can have on an economy. Inflation is terrible news for many workers, the unemployed, renters, retirees and those on fixed incomes.

It is an open question whether the public will be willing to accept the corrective measures necessary to bring inflation down.

In opposition, Labor did nothing whatsoever to foster understanding of budgetary or economic realities. On the contrary, Labor actively encouraged the public to believe they could have more government spending without any cost — as long as the ‘rich’ started paying their ‘fair share’.

During the election, Labor was still promising larger deficits. Even now, Labor is supporting the idea that wages should be keeping pace with inflation. The ACTU (and apparently the Fair Work Commission) seems to believe this won’t be inflationary. Don’t bet on that.

Of course the ACTU and FWC won’t face consequences if they are wrong. However the government doesn’t have the luxury of betting things will just sort themselves out. In fact, there is a good chance they will cop blame regardless.

If they act, they will disappoint their supporters who want more spending and new programs. If they don’t act, the negative effects of inflation will eat away at public perception. And not acting brings with it the growing likelihood that the RBA will cause a significant increase in unemployment.

Or the first ‘real’ recession in 30 years. Another recession ‘we had to have’.

Part of the cost of living woes, but also its own point, are the problems with energy. A government seeking to embark on a significant energy transition could hardly start from a worse place than sky high prices, plus potential issues with reliability, in the middle of a cost of living crisis (or a recession).

The people seem to have expressed a preference for action on climate change, but will the consensus hold up in face of challenging economic circumstances? What if unemployment rises to 10% or more?

Labor is hostage to changing public opinion in another area too. It has promised to front two referenda: one on Constitutional Recognition and one on the republic. In particular, by tying itself so strongly to a referendum on the Voice, Labor is taking a huge risk.

Right now, public opinion also appears in favour of both proposals but the hard parts have not even begun. Expectations have been raised despite the complete lack of detail on what the Voice will do or what it will look like. Elites in business and media might be on board but no-one has even tried to convince ordinary Australians why this is important.

Instead, they are already being told the only reasons to vote ‘no’ are racism or ignorance. Good luck with that campaign strategy. Especially when the ‘no’ campaign starts in earnest.

As for the republic, after the launch of the latest bizarre model, they don’t even need a ‘no’ campaign to start burning support.

Already wiser heads inside the government and out are hedging their bets on timing. While the loss of either referendum would take quite a bit of shine off ‘master campaigner’ Albanese, another Labor leader abandoning his great moral causes would be far worse.

This is yet another challenge facing the new government where success won’t be particularly to their credit — Noel Pearson and the activists behind the Uluru Statement would rightly claim credit. Yet, failure will fall primarily on the new government.

No politician ever thinks that losing an election is a good thing, but cynics might just start to wonder whether Labor has inherited a poisoned chalice. Can they move past the blame game and govern the country?

Simon Cowan is Research Director at the Centre for Independent Studies.