Labor’s steady start but one huge misstep

FIVE weeks in and the two big flavours so far of the Albanese Labor government and of Anthony Albanese in particular are a rather quirky combination of cautiousness and globe-trotting.

Has there ever been a previous PM who’s spent more of the first few weeks in office on a plane and in global glad-handing? Indeed, who hopped on that first plane within days of election night? Maybe the two have gone together; less a case of “when the cat’s away….” and more the practical reality that when they are not at their desks – as it’s not just been the PM – they can’t get up to too much ‘doing things’ mischief.

That might be a tad harsh; for I suggest that slowlyslowly has been the deliberate intent of especially incoming Treasurer Jim Chalmers, along with Finance Minister Katy Gallagher. And in the febrile caustic world we face, could there be two more important ministers than this duo? And, again, especially Chalmers, with a PM who has clearly demonstrated the Whitlam characteristic of having little interest in either the economic reality or the economic detail?

That campaign-opening inability to nominate arguably the two most basic and even more significantly important statistics – the cash rate and the jobless rate – was not a one-off brain fade but a really fundamental revelation we should do well not to forget.

Let me hasten to add, though, that while Albanese has displayed those Whitlam characteristics, albeit lacking Gough’s grand imperial flair that made them almost a leadership positive, I am most certainly not suggesting we are therefore embarked on a Whitlam Version 2.0 government.

Quite clearly, from the PM and especially Treasurer down, the model is HawkeKeating. Indeed, as one of my editors puts it, Chalmers has a ‘degree in Paul Keating’.

Further, just like Keating did in 1983, Chalmers has spent his first month closeted with treasury secretary Steven Kennedy and Reserve Bank governor Philip Lowe, sucking up what they have to tell him.

Keating almost literally sucked out all that then treasury secretary, the renowned John Stone, could teach him; and then discarded him.

More immediately, the governance ‘model’ that is very definitely not intended – given so many ministers including the PM actually experienced the searing lunacy of it from the inside – is that of Kevin Rudd.

Now, there has been one huge and increasingly uncomfortable exception to the cautiousness, which could prove devastating, and not just to the government but even more importantly to the economy.

This is the government’s explicit support for a 5.1 per cent minimum pay rise – which, apart from anything sits rather awkwardly with Chalmers joining with Lowe in urging a general pay rise that start with a ‘3’.

The government’s been rather ‘twee’ – trying, that is, to have it both ways – by not explicitly nominating the 5.1 but calling instead for lowpaid workers to “not go backwards”. It’s also tried to limit the number to very low-paid workers. And it really ‘had to do it’, given the promises in the campaign and indeed the earlier attacks on the Morrison government’s approach to the wage issue.

But it is just not sustainable in the reality of acute and widespread labour shortages and with the inflation number at the end of July going to print closer to 7 per cent than 5, and heading higher. Generalised wage rises of 5 per cent-plus would be devastating and upfront terminal.

The recourse to a Hawkestyle summit is no solution, as the government lacks the non-government participants in business and the unions of 1983, or the policy options.

A final point: none of this subtracts from the utter insanity and devastating destructiveness of the government’s 2030 43 per cent emissions cuts.