Albanese and Chalmers are mired in the swamp. One could be gone before the next election

As the year draws to a close, Labor’s midterm blues are surely, and perhaps indelibly, turning black.

The national mood has been bleak for a while and getting bleaker, with no signs that it will improve any time soon. Rare slivers of silver linings are quickly swamped by bad news, then even worse news.

MPs feel threatened politically and physically. The horrendous injuries suffered by independent MP Helen Haines, who has been repeatedly and rightfully described by her traumatised colleagues as the best of us, have had a profound, devastating impact on parliament and the community.

Inflation sticks like superglue. With interest rates and unemployment increasing, the prospect of the economy sliding into an actual recession is real, although a “feels like” recession (if it quacks like a duck etc) as Reserve Bank governor Michele Bullock describes it, carries many of the same crushing consequences.

The embedded, if overblown, view that government spending has fuelled the inflation dragon and only swingeing cuts to drive the budget back into surplus this term will kill it, rubs up against the fear inside the government that slashing and burning will in fact kill the economy.

Combined with the five rate rises this year yet to reach peak impact, the government could – if it fails to act or if it acts recklessly – precipitate that worst of all nightmares.

Speaking of nightmares, regardless of the outcome of the US midterm elections, Donald Trump – a mad, vengeful ruler devoid of good sense and good grace, and still wielding enormous powers – has another two years in office. Mitigating the disasters Trump has inflicted on the world, or countering those yet to come, adds another layer of complexity to the government’s challenges.

Yet this is not the time to shrink from reform. A bold new economic agenda to drive productivity and investment, fully implemented between now and the budget to show the government has ideas and is not hostage to events, as several key cabinet ministers are advocating, is by far the best option.

This should be the “banana republic” moment for the Albanese government, the moment to seize what looks like the grimmest of times to force change, as Paul Keating did 40 years ago when he delivered the shock warning and then followed up with the tough-but-fair Grim Reaper budget.

The economy today demands change and the government needs to do it to get out of its black hole.

This time next year, probably a little earlier, the tensions bubbling away inside Labor will explode unless the economy revives and spurs an improvement in the party’s and Anthony Albanese’s standing.

There is already serious disquiet in caucus. The widespread misery and anxiety of a recession, whether real or “feels like”, will only exacerbate that disquiet.

The usual tensions between prime minister and treasurer, which simmer when the government looks cooked, could easily boil over. The danger signs are there.

Treasurers usually bear the brunt of unpopular decisions and tough times. They are invariably subjected to internal, often anonymous, critical briefings as has happened to Jim Chalmers. This is usually coupled with the overt building up of a rival: in this case Health Minister Mark Butler as the most likely successor to Albanese – then, surprise, speculation Chalmers could be sacked as treasurer and replaced with Butler.

According to a slightly different, even more dramatic scenario playing out internally, it is conceivable either the prime minister or the treasurer will be gone before the next election.

Cost of living and policy decisions, particularly changes to negative gearing and capital gains tax (despite Albanese repeatedly ruling them out) have been responsible for much of the government’s loss of support and the increased unpopularity of both Albanese and Chalmers.

However, this period has also been characterised by the prime minister’s penchant for doing or saying ridiculous things then insisting he hasn’t done them. That is another reason why his personal numbers have tanked and why a trait once seen as mildly amusing, which colleagues now describe with increasing frustration as his “stubborn streak”, threatens to turn their leader into a national joke. That too would be deadly.

Chalmers could end up the fall guy. But this would do nothing to lower inflation, resolve cost-of-living pressures, induce the Reserve Bank to lower rates or force Donald Trump to end the wars. Nor would it make Albanese behave better under pressure. It would almost certainly trigger a crisis.

All this is acknowledged and understood by senior members of the government.

Chalmers has barrackers across the factions, but he suffers from the lack of a solid, sizeable factional base, and he has alienated colleagues. Part of the motivation for briefing against him from sections of the Left and Right is post-Albanese leadership jockeying, despite the prime minister’s insistence he is not going anywhere. Ultimately, if Albanese continues as he has, he might not get to decide when to go, which would be a great shame. This is a vastly different world from 2025 – more divided, more hostile and infinitely less forgiving.

The threat of One Nation is as real as the threat of recession. Victoria promises to show that in this month’s election. One Nation might not win that many seats, but it looks set to determine who does, and Coalition MPs are confident it will be them.

Victory for the Coalition would provide the fillip Angus Taylor needs to stay in the federal opposition leadership until next year’s NSW election, at which the Coalition fully expects to be smashed by Labor and One Nation.

Then again that was the prediction for Victoria not that long ago.

Finally, Helen Haines deserves all the accolades she has received and then some. Helen is a first-class representative for her community, a great parliamentarian and a beautiful human being. Her legions of admirers, including this columnist, look forward to her return.

As with the assault on a One Nation volunteer in Victoria, all acts of violence are intolerable.

Niki Savva is an award-winning political commentator, author and regular columnist.

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