Albanese and Trump put Australia in holding patterns on election timing and tariffs
- Written by Michelle Grattan, Professorial Fellow, University of Canberra
When parliamentarians left Canberra on Thursday after the fortnight sitting, federal politics had the air of an uneasy waiting game.
Waiting for the election date, although the campaign has been running for months.
Waiting to know whether there will be a budget on March 25.
Waiting for capricious United States President Donald Trump to decide whether to grant Australia that keenly-sought exemption from his new 25% tariff on aluminium and steel imports.
Most immediately, waiting for the Reserve Bank to announce on Tuesday whether interest rates will be cut.
In policy terms, the government could be satisfied with this sitting week. Its Future Made in Australia legislation, with promised tax credits for major projects, passed. So too, did its sweeping new rules to put caps on political donations and spending.
The electoral reform legislation has been an extraordinarily drawn-out saga. Special Minister of State Don Farrell had originally hoped to introduce it by early 2024, with it operating at this election. But the process proved immensely complex, including for constitutional reasons. Finally the bill was introduced late last year, and has passed with virtually no time to spare. The measures won’t operate until the next parliamentary term.
Farrell brought to the task negotiating skills honed in a lifetime as a right wing factional power broker. He always wanted the deal to be done with the Liberals. He knew they would be the easiest dancing partners, because the changes are in the big parties’ mutual interests. But he also believed bipartisanship would reduce the chance of them being unravelled by a subsequent government.
The Coalition came on board – after the government made some concessions on donation and disclosure amounts – in the knowledge the reforms help put a floor under the two-party system. It’s obvious the Liberals want to limit the spread of the teal movement, that Climate 200 has helped finance.
But the potential for the increase in independents is a future danger also for Labor, which at this election is trying to win back Fowler, that fell in 2022 to independent Dai Le.
While the changes will limit the amount of money available to small players, they are a compromise and less unfair than some crossbenchers claim. Of course, judgements on fairness will differ according to where those making them are coming from. But it’s a substantial leap from urging newcomers should be encouraged into the system to believing the system should facilitate a financial auction for a seat.
As he basks in his victory of the electoral legislation Farrell, who is also trade minister, finds himself in a supporting role in a more immediately high-profile issue: the tariff battle with the US. Farrell is anxious to engage as soon as possible with his US counterpart, Commerce Secretary Howard Lutnick, preferably face-to-face. But he can’t officially do so until Lutnick is confirmed.
The tariff issue is being cast by the opposition as a test of Albanese’s ability to deal successfully with the Trump administration.
It’s an easy test to pose, but the government has done all it can to pursue a positive relationship with the administration. Notably, Deputy Prime Minister Richard Marles was in Washington a week ago for talks with new defence secretary Pete Hegseth, armed with a hefty cheque for some A$800 million as part of Australia’s contribution under the AUKUS deal.
The Albanese-Trump call this week, when the PM argued for a tariff exemption, apparently went well. But the outcome is unpredictable, as is the timing of a decision. Trump might have sounded encouraging but, as we’ve been seeing, there’s some strong opposition in the system to giving Australia special treatment.
A win for Australia would be a significant fillip for the PM; a Trump rebuff would be a corresponding blow. Timing is also important: it would not be good for the government if this issue was unresolved through the election campaign (even worse, if there was a bad result then).
The opposition seeks to grab headlines by calling for Albanese to rush to Washington. Even if practical that could be counterproductive; if the mission failed it would be a disaster. Voters wouldn’t give him too many marks for trying.
While Peter Dutton might have thought the arrival of Trump and a more general swing against “wokeism” would be helpful to him at the election, as the US scene becomes more unsettling, the risk for him is that some “soft” voters might decide now is not the time to change.
Though the tariff issue is important, the election contest is mainly on cost of living in all its manifestations.
Trump has the power to inflict a blow on Albanese on the tariffs, but the Reserve Bank is a much bigger player in the government’s thinking.
Expectations remain high of a rate cut next Tuesday. If that didn’t happen, it would be a serious setback for the government. The next chance for a cut would then be April 1.
It’s not that a cut would necessarily directly swing a lot of votes. The electorate’s mood is likely too negative for that. But the absence of the much-anticipated cut would badly mess with the government’s narrative that things are on the right track for people to become better off.
Many political stories have dominated this term. A lot could have been foreseen. One, however, was predicted by no one: the appalling antisemitism crisis that has overtaken us, and reached new lows this week. This crisis is the product of far away events triggering a local malignancy that was lurking largely unrecognised.
A parliamentary inquiry into antisemitism at universities said, in a report tabled this week, that it had found “a disturbing prevalence of antisemitism that has left Jewish students and staff feeling unsafe, hiding their identity on campus and even avoiding campus all together”.
On the same day that report was tabled, a horrifying video emerged of two nurses at a Sydney hospital, in an online discussion with Israeli influencer Max Veifer, spewing vile sentiments about killing Israeli patents. One of the two is an Afghan who became an Australian citizen several years ago. Dutton has seized on the video to call for a discussion “about the way in which the whole migration system works”.
Antisemitism has extended beyond being an appalling assault on Jews in our community – it is starting to undermine our institutions and society.
