John Fahey was premier of NSW between 1991 and 1995. When he lost government, Fahey effortlessly swapped his state seat of Camden for the encompassing federal seat of Macarthur. He then vaulted straight into the new Howard Coalition cabinet as the senior Minister for Finance.
With the Coalition spending 13 years in opposition, Fahey was among the few in the new cabinet with ministerial experience. At the cabinet's first meeting in 1996, Fahey subdued the celebration when he said: "enjoy this moment; it is all downhill from here". Indeed, the Howard government did have a difficult start.
By contrast, in 2022, the Albanese government had a promising beginning, particularly in foreign policy, as it continued to resist China's aggressive trade and defence policies. Foreign Affairs Minister Senator Penny Wong adroitly managed the countermeasures put in place, particularly with our South Pacific family. Defence Minister Richard Marles quickly built on the previous government's work by strengthening the Quad Alliance and AUKUS defence pact. The Albanese Government also rushed to implement other 2022 election promises. As a result, the National Anti-Corruption Commission has been legislated. Additionally, real progress has been made in designing the Indigenous Voice to Parliament.
Public approval has been high with the final Newspoll of 2022 showing a swing to the Albanese government in every state with an overall national swing of 4.5 per cent. But there has been a rocky start with several key policy areas. Workplace relations have become a political and policy cul-de-sac over the past 20 years. The new government made a promising start with the Skills Summit, but the legislative outcome followed the unions' agenda, and business was sidelined. Opening the door to a return to multi-employer bargaining for which it has no mandate, can damage many businesses.
Another legislative "victory" that may come back to haunt the Albanese government before the next election is the one-year legislated caps on the price of gas and electricity. Santos chief executive Kevin Gallagher dramatically described this as a "soviet-style intervention, pursuing energy market nationalisation". Although this policy will ease the rate of price increases in the short term, this artificial lid could have unfortunate outcomes in future because it defies the ironclad economic laws of supply and demand.
Rising demand for power and a falling supply will automatically raise prices. Artificial caps will probably reduce private investment in power sources, and this reduction in supply will put further upward pressure on power prices after the caps are lifted. A Woodside spokesman said the intervention failed to address the real issue - the falling domestic gas supply.
Although the new government has received accolades for at last taking climate change seriously, the 43 per cent greenhouse gasses reduction target by 2030 is turning into mission impossible. Minister for Climate Change and Energy Chris Bowen has laid out the enormity of this task in detail, down to installing 20,000 solar panels each day and 40 wind turbines each month over the next eight years. Will such an investment be made by the private sector, now spooked by government intervention in the power market? Even before this, government projections were showing that greenhouse reduction targets would not be met without technology breakthroughs, such as upscaled battery storage units and real progress with green hydrogen production.
In two years, Australia will be in the thick of the next federal election campaign, due in May 2025. But at the dawn of 2023, we can see the shadowy outline of possible election issues. The aftershocks of COVID and the Ukraine war supply shortages, high inflation and interest rates will probably have faded. Some policies that the ALP took to the 2022 election, such as corruption, the indigenous voice and gender issues, will be sufficiently progressed and not be contentious.
The biggest challenges the government probably will face at the 2025 federal election will be intractable ones. These include industrial unrest driven by low wages - the consequence of low productivity. High power prices will still be with us in 2025, resulting from an inability to meet ambitious, unrealistic, and expensive climate targets. The seeds of failure with all these critical policies may be traced back to the ill-considered, quick-fix interventions rushed through the federal parliament at the end of 2022.
Unlike its predecessors, the Albanese government has a slim majority in the House of Representatives, and a simple majority coalition in the senate of the ALP, Greens, and Independent David Pocock. It is a formula for possibly getting all its policies legislated. Still, recent experience shows that the government will need to exercise greater wisdom in formulating domestic policies if it wants to become more than a one-term government.
Newcastle East's Dr John Tierney AM BEc is a former Hunter-based Liberal federal senator.
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