On Australian politics: A despatch from Canberra
Australia is the next AUKUS country to face voters and Labor is in trouble.
I have just returned home to London from a couple of weeks in Sydney and Canberra, Australia where I had the chance to catch up with a range of contacts in the government, Liberal party, think tanks and the like.
My time back coincided with the US election and was timed for the Australian Institute of International Affairs conference in Canberra where I was pleased to moderate the final plenary session on what now for Australia, after Donald Trump’s spectacular political resurrection.
The headline story of the week was dominated by Kevin Rudd — Australia’s former prime minister, reinvented as a widely-regarded China scholar and serving — to all accounts extremely effectively — as Australia’s Ambassador to the United States.
The reason for this was because Mr Rudd spent the morning after Trump’s re-election hastily deleting criticisms and tweets of Mr Trump that he’d made before becoming Ambassador, and often as part of his campaign to instigate a royal commission into Rupert Murdoch.
Mr Rudd has long blamed the Murdoch media for leading to his demise — his colleagues ousted him from the prime ministership in 2010 and then reinstated him in 2013 before the party lost government altogether.
It’s as untidy as it is unnecessary and some have called for him to stand down, but this is not something that the government or the opposition will seek despite Trump advisers Steve Bannon and Dan Scavino Jnr intimating Mr Rudd might be a problem and unable to work with the incoming Administration.
Time will tell. If anything happens it will likely only be because Mr Rudd has determined his past behaviour cannot serve Australia’s interests. But this is pretty unlikely — Rudd’s proxies in the Australian media have made it clear that he’s not going anywhere and shouldn’t because he’s successfully built ties with MAGA Republicans.
In the wider scheme of things and the future of Australia’s alliance with the United States, the Rudd drama is all, of course, embarrassingly small fry.
Still, it does underline particularly for his critics, (and there are many) that for Australians, even digesting the most consequential result in modern US political history had to be spent discussing it in the frame of the former PM.
‘It’s always about Kevin’, grumble his detractors, but at least in this instance, they are right.
Albo the third term of the Rudd government
There is a deeper and more underlying concern this episode highlights for the Albanese government that goes beyond the Opposition’s clever tactic of linking the Captain’s Pick of Rudd for Ambassador to Prime Minister Anthony Albanese’s judgement.
As one Labor figure put it to me: ‘The Albanese government is the third term of the Rudd government.’ And that’s not a compliment. Most of the current Cabinet were serving in Rudd’s ministry and many of them were personally involved in that infighting.
And that’s playing out today in a different but also self-harming way. The current government is drifting, it lacks a narrative, a coherent strategy for re-election and the Prime Minister doesn’t look match fit for the looming election.
He is regularly not across the details, responds with stunning tetchiness and arrogance to media questions and botches his attacks when on the back foot.
He has also spent a lot of political capital on unforced errors such as buying a $4.3 million coast house in the middle of housing and cost-of-living crisis and revelations he was on the Qantas gravy train, asking for his young adult son to be given access to the exclusive Chairman’s Lounge and benefited from freebie upgrades, including when he was transport minister.
It’s remarkable that he’s lost so much support over inconsequential issues rather than a big policy fight that might involve selling a reform that includes losers but in the long run, would give him sorely-needed gravitas as a change-maker.
But what’s most surprising is the complete inertia of his cabinet.
Scarred by the Labor leadership wars of 2010 - 2013 they now dare not criticise the prime minister, lest it be viewed by a press gallery — trained on a diet of leadership crises — as positioning or undermining or worse … the precursor to a spill.
If the prime minister is performing badly, his colleagues appear to be the last ones willing to tell him.
Part of this is loyalty, part of it is PTSD but it is also a testament to one of the Prime Minister’s unrecognised skills, his complete command over the party. Albanese has always been a Labor man first and foremost and his grip on the machine shows.
In the first term of the Rudd government, there were half a dozen figures who could mobilise MPs including David Feeney, Don Farrell, Mark Arbib and so on.
The current caucus is depleted of factional heavyweights and the one or two figures left who are capable of that sort of internal influence (including Senator Farrell, now Trade Minister and one of the government’s best-performing ministers) are totally loyal to the PM. They would rather go to a loss than reinforce to voters that the Rudd-Gillard leadership wars were the norm.
Albanese started out with multiple leadership rivals: Jim Chalmers, Chris Bowen, Ed Husic, Tony Burke, Clare O’Neill (in the future), Tanya Plibersek, Bill Shorten and Richard Marles.
Through time, attrition and performance, those options are whittled down to Marles and Burke. Burke has made his intentions clear in the past but is totally loyal to Albanese and Marles would be unable to lead a putsch alone.
The NSW and Victorian divisions are riven at any rate. The other potential candidate Jim Chalmers has no natural support base coming from Queensland where Labor is an exotic species federally.
This all leaves Albanese comfortable that he can continue to coast poorly and remain unchallenged and in his criticism-free zone.
The government will go to the polls anytime between February and May. One figure told me there would be a budget (set for 25 March), and another said the PM wants to go in February, certainly the PM has discussed with the Labor premier moving the date of the WA state election date which is required constitutionally if Albanese wants to go in the weeks before that poll is scheduled.
But guessing the date is a mug’s game and ultimately pointless as we are essentially in campaign mode already and the election date is only a question of three or four or five months.
So who’s going to win?
The opposition leader Peter Dutton has years of baggage as a hardman and unlikeable right-wing figure who made a name for himself when Home Affairs Minister bagging lefties and refugee advocates on right-wing talkback radio.
He should be unelectable in the left’s mind. But he’s led the Coalition to an enviable polling position — either neck-and-neck with Labor or even ahead.
That’s given way to some speculation Dutton could even win but I don’t believe this is very likely.
The Coalition is in a worse position since 2022 having lost the Aston byelection and suffered two defections.
Dutton needs 21 seats to get to the required 76 and the public mood is currently just not there for that scale of a landslide.
In the Ruddslide of 2007, Labor won 23 seats and there was a serious and positive mood for change. People wanted John Howard off their television screens and out of their lives, for my British readers this was similar to the mood in the lead-up to the last UK election.
Things are nowhere this bad for Labor in Australia right now.
I assess Albanese has one last big mistake to make, one last story he can’t shut down properly and the voters will turn. Right now they are disappointed and consider him a waste of space but they don’t have their baseball bats out.
The last time the voters were in baseball bat territory (for Labor) was in 2013 and even then the Coalition gained 18 seats and it was after years of this mood. So talk of Dutton winning majority within a few months is ‘getting a bit carried away’, as one Liberal strategist put it to me.
The most likely scenario is that Labor loses its two-seat majority and slides into a minority government propped up by Teals and Greens. Short of winning outright this is the dream scenario for the Coalition as they believe it will be a rerun of the chaotic minority government that Julia Gillard led until 2013 and ended in a Coalition majority government, despite the supposedly unelectable Tony Abbott leading the opposition.
It would also enable the Coalition to target the metropolitan teal seats which fell in 2022 to mostly women independent candidates. How to govern in majority on a suburban-led strategy is the difficulty the Coalition still needs to square — its pathway to majority victory ultimately depends on winning back those progressive and wealthy soft-liberal seats that were once occupied by Prime Ministers, such as Wentworth in Sydney’s eastern suburbs, Warringah in Sydney’s lower north shore and Kooyong in Melbourne.
I grew up in the then Independent-held seat of Calare in central west New South Wales. Independents, once they gain a seat, are difficult to dislodge in Australian politics and Peter Andren held the seat of Calare until his death.
But if teals are seen to prop up a Green-Labor government, this will be a powerful way back to the metropolitan elite for the Coalition in another three years’ time.
But Labor thinks it can hold majority
Yet I was surprised by the confidence of some in the prime minister’s inner circle, including strategists, who think Labor can hold a majority.
They hope to gain a Green-held seat in Brisbane following the Greens’ recent performance in the state election in Queensland and gain in Tasmania where two seats, Bass and Braddon, are held by Liberals. They also believe that Sturt in South Australia is achievable — I’m personally sceptical of this as in every election I’m told the seat is in play only for the Liberals to hold.
Leichardt in far-north Queensland is also up for grabs with the popular veteran local MP Warren Entsch retiring.
In Labor’s favour is Peter Dutton. ‘The voters hate him,’ one cabinet minister told me.
Dutton’s vulnerabilities are his binary, strongman approach to politics. He doesn’t do shade very well and has barely even tried to bother showing a softer, cuddly side. Labor will paint him as uncaring and run scare campaigns on his plan for nuclear energy and his past record on health — which has always been a strength issue for Labor.
But Albanese is the Coalition’s greatest strength too. The Coalition will pounce on the PM for being weak and overseeing a cost-of-living crisis. They hope to win back Aston and Goldstein in Melbourne, target the suburbs and the regions and possibly win back the teal seat of Curtin in Perth.
I’m disinclined to draw too many parallels between the US result to Australia — they are very different voting mindsets — but it is absolutely the case that the economy, or cost, will be the number one issue this election.
And that bodes badly for the incumbent.
$6 coffees
I was last in Australia in March and the cost of living and eating out etc has always been expensive (Australia also has far higher wages offsetting the higher cost of living) but this time the prices were off the charts.
Coffees are now $6 and I nearly fell off my chair when I bought my first flat white upon landing in Sydney.
Okay so that was in Bondi Junction, I consoled myself.
But no, this was the new norm. Even on the Central Coast, Ettalong, (think suburban battler territory) the coffee was $5.50. Brunch for two was $80. These are insane prices and it was fine enough for me because I was spending pounds, but these were seriously belt-tightening prices.
The coffee example is particularly symbolic — Australians are obsessed with speciality coffee and at $6 a cup, it’s the difference between someone buying two or three coffees a day to one or none. Six dollars for a coffee felt like one of those psychological thresholds crossed.
Not only is this small delight on the way to work taken away but obviously cafes are taking in less at a time when the cost of everything is so much more.
Dutton has been particularly sharp and retail on this with his message for some time now.
Take for example his interview with the ABC’s Patricia Karvelas — one of the best interviewers in Australia — this week: ‘If you’re a local cafe at the moment and … your turnover’s down by 40 per cent, people aren’t buying a second coffee during the day, or they’re buying a coffee every second day, or they’re ordering a muffin instead of a full meal; those businesses are suffering at the moment and they don’t have the scale, or the advantage that big business does.’
I don’t envy Labor’s National Secretary Paul Erikson trying to craft a campaign around this sense that life is harder, the cost of enjoying it is so much more, often out of reach and nothing is letting you get ahead, which is essentially the vibe that will dominate the 2025 election.
As Biden found, it’s impossible to tell voters that inflation is stabilising when prices have skyrocketed and no one thinks those prices are ever going back to ‘normal.’
NAB is now not forecasting an interest rate cut until May. This dynamic could be particularly turbulent if the Trump Administration starts a trade war aimed at weakening Australia’s largest trade partner China, immediately after the inauguration.
So while Dutton might set no one’s world on fire he has an easily available grievance campaign to run and we do know that inflation and incumbency are dual political killers right now.
Coalition not ready
One of the biggest hurdles for Dutton is the quality of his team. His frontbench has one star — Senator James Paterson who seems to single-handedly hold the entire Australian government to account — and few other heavy lifters.
Those who try are often own-goalers, such as Bridget McKenzie who tried to lead the charge against the Prime Minister over his Qantas freebies only to discover she had a bunch of her own undeclared upgrades to declare. If it’s possible to combine an eye-roll and facepalm emoji that’s what we’d deploy right now.
Most of the frontbench is comprised of Scott Morrison’s unwanted leftovers and the Coalition, only three years out of government, needs much more time to rebuild and advance talent. It also desperately needs to boost the diversity of its MPs and elevate competent women. The Coalition mocks Labor’s quotas to its peril.
Labor can easily suggest to voters that Dutton is not quite ready for government. Indeed, there’s a case to make that rewarding the Coalition so soon after their worst-ever defeat vindicates their inability to diversify their ranks and sort out a coherent suite of policies, not least on climate change.
But Labor would need to argue its agenda far better than it has, as well as present to voters a plan for making housing more affordable and prices come down, it’s also the case that the politics of climate change are changing and not in the left’s favour.
Campaign will be the unknown factor
In reality, Albanese and Dutton are each other’s best assets so much of this will come down to the campaign.
Albanese campaigned poorly in 2022 and lost the Voice referendum. Dutton is untested in campaign mode and Labor is hopeful that the opposition leader’s current tactic of holding few press conferences and rarely with the press gallery means he’ll fall over in the opening weeks when he can’t escape the daily pressure.
Stoic in the face of Trump
But I’ll finish this despatch where we began — the election of Donald Trump.
Rudd dramas aside, Albanese and Foreign Minister Penny Wong have responded to the US election result flawlessly.
They endorsed Trump’s mandate for change, reminded Australians to be confident of their place in the world, paid tribute to the work of Kevin Rudd in shoring up Congressional support, including with MAGA republicans, for AUKUS and said Australia will, of course, work with Mr Trump, just as we did in the past.
The opposition’s Simon Birmingham has warned Australians not to catastrophise Trump’s return but warned that how the President negotiates an end to the Ukraine war will be an early test of the second Administration.
It’s been sensible and grown up.
One dynamic I am keen to monitor is whether Trump will keep Albanese and Wong on their toes, particularly when it comes to Australia’s softened tone on China under Labor.
Labor’s greatest achievement in office has been ‘stabilising’ the relationship with China and unlocking the economic coercion that the CCP imposed on Australia under the former government.
However, the government bungled the sale of this achievement by over-politicising its success and blaming the Coalition for Beijing’s bullying. Australians don’t like any sense that China can divide us.
Additionally, Albanese and Wong have also given the impression that they are reluctant, slow or downright unwilling to raise points of contestation with China as a result of getting the trade restored.
Australia has consequently been slower to add its name to US-led statements and actions on China, for example in condemning Beijing’s provocations against the Philippines. Labor could afford to take the Biden Administration for granted but this will not be possible under Trump.
Coffee - should have come to the Blue Mountains - normally pay $4.50 here but even in tourist dominated Leura yesterday only paid $4.70. But proprietors tell me less domestic visitors because of cost of living issues. You are right about "Albo" - big disappointment. A party "smoke filled rooms" . politician rather than a leader. For me, it maybe unpopular, but Julia Gillard was our best recent Labor PM. Totally across her brief - dealt a rough hand in parliament and party but managed to stay a decent human being. It would be so nice and so much better for the Coalition if they did not automatically oppose every policy or initiative. Dutton is bad but Sussan Ley is worse - vacuous in policy development except in saying no. Chalmers is a smart technocrat as Treasurer - God help us if we end up with Angus Taylor! Both big parties trying to squeeze the Teals - especially with Don Farrell's proposed reforms to political donations. But there again Farrell's background is with the "Shoppies" Union - more Catholic than progressive.