Is it the economy or not, stupid?

Is it the economy or not, stupid?

The government says you can’t trust Labor to manage the economy, but also that the economic downturn is out of its control

Yesterday’s shocking inflation figure and the impending interest rate rise have brought the election campaign firmly back into economic territory, with a renewed focus on the rising cost of living and stagnant wages. The Coalition has been eager to shift the blame (what else is new?), suggesting that cost-of-living pressures are beyond anyone’s control, and continuing to insist that our economy is “one of the strongest in the advanced world” (it’s not). Shadow treasurer Jim Chalmers’ key line for the day, spoken at almost every opportunity, is that Scott Morrison “loves to take credit when things go well but never takes responsibility when times are tough”. It’s an effective critique, although there’s no doubt that all politicians try to take credit for the good. But there is a particular cognitive dissonance in the Coalition’s claims that there was nothing it could have done here, that there isn’t anything anyone can do to lift wages, yet all the while arguing that you can’t risk Labor. It’s the economy, stupid. But does the government think we are stupid?

It’s utterly bizarre to watch the Coalition maintain that it couldn’t have prevented this situation, while in the next breath argue that we can’t trust Labor, and that the nation needs the Liberal Party, the Good Economic Managers, at the helm. It was not so long ago that the prime minister was warning of scary rate rises under Labor, claiming that only he could be trusted to control petrol and interest rates (a declaration that many people at the time suspected might come back to bite him). Today’s conflicting claims show a similar level of contradiction to what we saw in the wake of the budget, when the government insisted everything was going great, while at the same time trumpeting its (temporary and targeted!) cost-of-living relief, which was an acknowledgment that everything very much wasn’t.

It’s obviously not true to say that the government of the day can’t have any impact on inflationary pressures – indeed, as the Coalition keeps reminding us, it has already offered up a “shield” in the form of a $250 payment that will barely cover a family’s grocery bill, and a fuel excise cut that we can’t afford to keep forever (but we conveniently can afford in the lead-up to an election). And likewise it’s not true to say, as Morrison has been fond of declaring lately, that there’s nothing that Labor could do to increase wages if it won government, because Labor leader Anthony Albanese doesn’t have a “magic pen”. While the government does not directly control wages in the private sector, it can increase them in the public sector (something Liberal governments are not so huge on), with flow-on effects for wages more broadly. Chalmers has today been listing Labor’s various ideas about how to lift wages. How effective they would be remains to be seen, though surely anything would be better than a government intentionally suppressing wages.

The Coalition is tying itself in knots with this one, pretending we are all helpless against global pressures but that only it can help us weather them, without ever bothering to specify how. The Coalition’s entire campaign seems to hinge on “don’t risk Labor” (the rudimentary pitch often entirely unsubstantiated). It’s all they’ve got, especially now that they’ve lost their edge on national security over the Solomons snafu (voters in the key seat of Longman certainly reckon so). But it’s all making less and less sense, if it ever did. Between these new economic figures and the earlier record – including the cost of the botched vaccine rollout and the horrifying aged-care stats – there’s very little that makes sense about the now is not the time to change the government line. The “better the devil you know” pitch could be more accurately summed up as “better the low wages, high inflation and rising interest rates you know”.

With the new inflation rate giving the lie to (whatever was left of) Morrison’s claims of strong economic management, and fact-checkers confirming Labor’s claims about the current government’s taxing and spending, it increasingly seems that we can’t trust the Coalition to manage the economy. Then again, on days like these, apparently there’s nothing anyone could have done.

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