21 December | Federal Year in Review

The Albanese Government has now passed the midpoint of its first term after more than a decade in the political wilderness for Labor and while there have been no major accidents, some fine tuning will be required to prevent things running off the rails.

Polling indicates that Prime Minister Anthony Albanese remains ahead of his Opposition counterpart Petter Dutton as preferred Prime Minister and Labor holds an election-winning lead . However, those numbers have narrowed significantly in the second half of the year and the prospect of a hung parliament begins to build in voters’ minds.

Inflation and interest rates remain stubbornly high and despite some targeted cost-of-living relief for pensioners and low-income earners, middle Australia is doing it tough. The Budget came back to surplus and may do so again next year but that offers scant relief to mortgage holders and families battling spiralling costs at the supermarket and petrol pump.

The unsuccessful Voice referendum has fed a perception in some media quarters that the Government was asleep at the wheel but continuing low unemployment, a parliamentary win late in the year on industrial relations and booming commodity prices leading to a likely second successive Budget surplus next May have given Labor MPs a spring in their step as we head to the long summer break.

However, that feeling could be short-lived following the recent tragic passing of Labor backbencher Peta Murphy and the upcoming by-election in her Victorian swing seat of Dunkley serving as a significant litmus test of Mr Albanese’s leadership during the cost-of-living crisis.

With a federal election due by mid 2025 but more likely to be late next year, PremierNational has taken the time to look back at the political landscape of the past 12 months and forecast some of the key flashpoints Australians can expect to watch in 2024.

The Albanese government started the year off the back of eight successive RBA rate hikes culminating in a 3.1% cash rate by December 2022. Another five rate rises since then, including one in November leaving the cash rate at 4.35% over Christmas, have cast a daunting shadow over the national economy for the year ahead.

The RBA was forced to tread a fine line in 2023 as it continued to try to find the right balance between constraining spending amid high inflation post-COVID and driving the country into recession. Despite easing global inflationary pressures, the RBA was joined by central banks overseas in raising rates further than many predicted they would go at the start of the year. The impact of rate rises late in the year is yet to wash through the economy, with retail spending through the Christmas period set to be one of the main drivers of where rates will head early in the new year.

In the year to September, wages increased by a record four percentage points, though inflation continued to outpace wage growth for most of the year until at least the September quarter. This meant that wages have consistently declined for the past three years, although some analysts expect moderate real wage growth in the coming quarters.

Not helping the Albanese government’s case was an analysis by the Australian Financial Review that the average household income in Australia declined by 5.1% in the 2022-23 financial year, constituting the steepest drop in real incomes in the OECD.

By early September, national accounts data released by the Australian Bureau of Statistics showed that Australia had slipped into a per-capita recession, where an overall trend of economic growth – albeit strikingly lacklustre – was accounted for only by strong inbound migration.

However, with the Albanese government’s release of a major overhaul to migration strategy in December, migration is set to fall significantly next year and more than halve the year after compared to Australia’s current migration figures.

While the strategy aims to better prioritise highly skilled workers and cut down on international students entering “low-quality” courses, it is also hoped the overall cut will reduce pressure on urban infrastructure and the country’s burgeoning housing crisis and target migrant worker exploitation.

The Albanese government, in collaboration with the Greens and crossbenchers, secured a deal advancing a key part of its industrial relations overhaul, specifically around labour hire laws and criminalising wage theft. The approved "same job, same pay" laws, affecting major entities such as BHP and Qantas, triggered controversy and a $24 million campaign by the Minerals Council of Australia that argued the legislation would complicate businesses and jeopardise projects.

The Closing Loopholes Bill passed its first section in the Senate which focuses on labour hire laws despite objections from big business. The second section, covering gig economy changes and converting casual workers to become full time employees, is scheduled for debate in the coming year but the signs are good for a Government struggling to put runs on the board ahead of the next election. The second raft of changes would potentially impact the status of over 3.5 million casual and independent contract workers, carrying various implications for workers and businesses alike.

The government's agreement with the crossbenchers and Greens includes provisions for higher fines and criminal offenses for underpayments, enhanced rights for workplace delegates, and the criminalisation of industrial manslaughter. Industry groups, including the Australian Resources and Energy Employers Association, oppose the legislation, suggesting it may render some projects unviable. Other critics argue that the bill, deemed the most complex rewrite of industrial relations policy since the Fair Work Act, could increase costs for various industries beyond the mining sector.

Politics became perhaps no more contentious in 2023 than in the lead-up to the Voice referendum in October, which failed after a national 40-to-60 vote was delivered.

The government’s hopes of a bipartisan campaign for a constitutionally enshrined Aboriginal and Torres Strait Islander Voice to Parliament were sunk when the Coalition announced its formal opposition to the proposal in April. For the remainder of the year, national support for a Voice steadily dropped and finally dipped below the 50% benchmark around July.

In the days and weeks following Australia’s first referendum in nearly 25 years, campaign critics made several suggestions as to why the vote failed, including a comparative slowness of the Yes campaign in launching and coordinating its messaging, a diverse network of No advocacy groups, the wording of the proposal itself and the debate being overtaken by the ongoing cost-of-living crisis.

Supporters of the Yes campaign argue that the national campaign dialogue was plagued by misinformation that unfairly placed a significant social and political burden on Australia’s First Nations peoples.

There were no big winners in federal politics in 2023 with an unedifying debate on the Voice leaving many Australians disappointed that the county could not find a way to come together to improve living conditions for First Nations Peoples.

Domestic and international economic uncertainty will likely define the political agenda for the entirety of next year with complex topics such as migration levels and skills shortages set to take centre stage alongside interest rates and cost of living in the next election campaign. 

Newspoll now shows the major parties are almost equal on a two-party preferred basis for the first time since June 2021, following a peak in Labor’s popularity in September last year.

Despite Anthony Albanese continuing to enjoy a strong lead over Peter Dutton in personal popularity, the gap between the two leaders has steadily narrowed over the past year – though the Prime Minister’s declining support is not fully translating into greater support for the Opposition Leader.

With predictions of moderate real wage increases for workers in the near term and ongoing crises in Ukraine and the Middle East providing significant angst and uncertainty, it is difficult to see the political landscape changing significantly in the coming year.

In many ways, this bodes well for the Independents – not just the Teals who are showing no signs of relinquishing their swathe of formerly Liberal seats won in 2022 but also a new breed of independents similar to outer suburban Member for Fowler Dai Le, who won a formerly safe seat from Labor last time around.

Beyond federal politics, there are three state and territory elections due next year: the Northern Territory in August and both the ACT and Queensland in October.

While the ALP has enjoyed a stranglehold on all mainland jurisdictions since the NSW election in March, it seems reasonable to think that at least one jurisdiction, will fall to the LNP, most likely two and possibly all three.

How this impacts Federal Labor’s chances is yet to be seen but as always, political tragics will be glued to the news in 2024 with a number of key elections up for grabs.