Labor Finally Faces the Music: Cost of Living Crisis Takes Centre Stage

Australian Prime Minister Anthony Albanese speaks to media during a press conference in the suburb of Northmead in Sydney, on Jan. 16, 2024. AAP Image/Flavio Brancaleone

Commentary

As Labor parliamentarians gather in Canberra on Jan. 24, to brainstorm the cost of living crisis most of their constituents will be pleased to see the issue being addressed but bemused as to why it has taken so long.

As publicity stunts and PR operations go, having a special caucus or party room meeting to address an issue will guarantee headlines, and news coverage. It is front-page-worthy news and will lead the electronic bulletins.

With the special caucus meeting called by the prime minister comes the focus on how did Australia end up in this cost of living crisis and what can be done about it.

Having called a special meeting, the government now cannot deny the crisis. Indeed it is a confirmation of it.

So it must tread carefully and purposefully. The Australian people will demand decisive action because the expectations have been heightened.

Labor now, rightly or wrongly, owns the problem.

Taking Responsibility

The crisis did not happen overnight. It has gathered momentum for a considerable time as electricity prices, petrol prices, the cost of groceries, and interest rates along with rents have all headed north in an unrelenting manner while wages have not kept up.

There are some issues that a government with all the best will in the world cannot control. But having owned the totality of the problem they will be seen as responsible.

Energy prices are clearly cutting into the family budget and the Opposition led by Peter Dutton is powerfully reminding the Australian people of the prime minister’s promise to reduce household electricity bills, to the tune of $250.

This has not occurred and indeed the exact opposite is being experienced.

Wait for Mr. Albanese’s election promises to be quoted back at him from now until the next election.

With Chris Bowen, minister for climate change and energy, continuing to promote renewable energy as cheaper and reliable when the lived experience of every Australian is the exact opposite is not assisting.

Australians are not blind to the fact that as we are selling our coal overseas in record amounts, it is being bought by countries for the simple reason that it provides them with the cheapest and most reliable source of energy.

Back at home, Australians are being denied that same benefit by their own government’s deliberate policy.

The price of petrol at the bowser, while eye-watering, is subject to market forces, and being of a green hue, the government will not countenance a reduction on the fuel excise at the bowser to relieve the hip pocket.

A fuel bowser is seen with different petrol types in Sydney, Australia, on Feb. 29, 2012. Cameron Spencer/Getty Images

Interest rates are determined by the independent Reserve Bank of Australia (RBA) which has overseen an increase that is leading to mortgage stress for many homeowners.

With 13 rate rises in just two years, there is now believed to be over one million Australians struggling with their mortgage payments. People are genuinely hurting.

As the economy stalls, the likelihood of wages increasing will be less likely, and most importantly, less affordable. Albeit with the slowdown will come reductions in interest rates courtesy of the RBA.

Labor will be eagerly anticipating their arrival in time for the next election.

The increased intake of migrants while of clear assistance in areas of worker shortages, places more people in the workforce keeping wages lower. The increased intake is also placing extra pressure on housing demand driving up rentals.

A Herculean Task

With this conundrum before them the Labor caucus, very conscious it did not end 2023 well at all, needs their gathering to be more than just a talk fest.

Bold initiatives will be needed and the tough questions answered.

Treasurer Jim Chalmers hands down the 2023 Budget in the House of Representatives at Parliament House in Canberra, Australia, on May 9, 2023. Martin Ollman/Getty Images

Are substantial wage increases affordable and if so how will that play into inflation? How do you reduce the demand for housing and thus reduce rental costs if high numbers of immigrants continue to be welcomed?

The temptation to reverse the stage three tax cuts comes from the left wing of the Labor caucus. But they were promised by the prime minister in very unambiguous language. No wriggle room there.

To repudiate such a solemn promise would be electoral suicide, apart from not actually easing the cost of living crisis in a structural sense.

Prime Minister Albanese will painfully recall the taxation promises broken by his predecessors Julia Gillard and Paul Keating and the consequences, not to mention President George Bush Sr. of “read my lips” fame.

Having fully embraced the issue through the calling of a special meeting the prime minister will need some very tangible announceables with an immediate impact if electoral oblivion is to be avoided.

The Australian people will await the outcome and judge accordingly.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.