We’ll be back in election mode on the other side of Christmas

Thanks to the train wreck that was the referendum for the Indigenous Voice to parliament, it will be a cold day in hell before another federal government proposes a referendum on anything, especially if bipartisan support cannot be guaranteed.

In that vein, you can kiss goodbye to the republic or a shift to four-year terms.

Triennial clown show

Thus, we face being saddled endlessly with the triennial clown show that will recommence on the other side of the forthcoming Christmas break when, so soon after the last election, the polity starts speculating about, and preparing for, the next one.

And that means after just 20 months, the government pulls down the shutters on policy adventurism, the opposition and the Greens start dialling everything up to 11, while the certainty the private sector so craves is once more suspended.

Taking into account various practicalities, such as not putting the Senate out of whack with the House of Representatives, the earliest date for the next election is August 3, 2024 and the latest possible date is May 17, 2025.

The government’s current intention is to go full term in 2025, either before or after the March election in Western Australia.

But, as every other government does, it will draw up contingency plans for an early poll towards the end of next year, just in case that presents the best opportunity for re-election.

As rough as things are for the government right now, as evidenced by its sagging in the polls, there is no palpable panic or division.

Crucial economic indicators

The view is the next election will be won or lost on the economy (nothing new there), while the hope is that, after being ravaged for most of the term by the politics of inflation, all the key economic indicators will be pointing in the right direction come polling day.

A couple of events this week suggest that may be the case.

Overnight on Thursday, US Federal Reserve chairman Jerome Powell not only left rates on hold but signalled the worst was over and that cutting rates had “now come into view”.

Given inflation in the US peaked higher and earlier than it did here, and that Australian inflation is deemed to be sticky, there will be a lag between a move in the US and one in Australia, but a move there should well be.

If it comes early in 2024-25, the government would be sorely tempted to pull the trigger before Christmas and cash in on what would be a wave of relief among homeowners and consumers.

Given that lower rates also mean a slowing economy, it would also be prudent to go to the polls before it slows too much and unemployment rises.

It’s amazing how forgiving voters can be when they feel things are getting better – the gold standard being Bob Hawke calling an election for March 1990, and winning, after interest rates fell from 17.5 per cent to 16.5 per cent. It’s all relative.

The mid-year economic and fiscal outlook released on Wednesday forecast a 0.5 percentage point inflation spike this financial year due to volatile oil prices, before falling to 2.75 per cent next financial year, back inside the Reserve Bank of Australia’s target band.

Based on that outlook, a rate cut in time enough to enable a pre-Christmas election will be a close-run thing. Nonetheless, the government feels if the fall in rates is not before Christmas, it will be after, still auguring well for a 2025 election.

Between now and then, Treasurer Jim Chalmers will work hard to establish Labor’s economic bona fides, which will include the delivery on a second successive surplus at the budget in May. It will be Chalmers’ third budget and possibly the last before we go to the polls.

Second budget surplus likely

When Labor delivered the first surplus in 15 years in the 2023 budget, it was not just economic good news. Anthony Albanese and Chalmers regarded this was critical if Labor was to shake the perception of being an inferior economic manager.

A second surplus is considered even more important and, in part, explains why when handing down MYEFO, Chalmers sandbagged with a forecast for this financial year of a tiny $1.1 billion deficit.

Short of China disappearing into a giant sinkhole, ongoing high commodity prices all but guarantee a surplus this financial year. Politically, the government will get greater bang for its buck by announcing that next year, rather than before Christmas this year,

Albanese has often told his caucus that to secure re-election, Labor needs to be seen as a safe pair of hands on the economy and national security.

The latter took something of a battering over the past month as the government struggled to get on the front foot following the High Court decision that rules it illegal to indefinitely detain non-citizens.

While Peter Dutton boxed Labor around the ears over that issue, the government believes, conversely, that it can do the same to the opposition leader on the economy.

Dutton has never been regarded for his economic prowess and Labor believes if it can drag him out on the economy over the course of the next year, it will be to its advantage.

If we had four-year terms, the nation could instead be engaged in policy debate for another year.