Grattan on Friday: A future plan on fuel should be central to Albanese government’s reform agenda

Using one lens, you could view the present contest between the Albanese government and the Taylor-Canavan opposition as pragmatism versus populism.

A week ago the opposition, which perennially berates the government for economic irresponsibility, urged a cut in the fuel excise. True, the Coalition proposed offsets, but it was a policy seen as counterproductive by many economists.

The opposition knew it would be popular, however – a judgement shared by the government, which days later announced a cut.

On a totally different front, Special Minister of State Don Farrell had over the summer been in discussions with the Liberals and Nationals about his proposal to expand the size of the parliament. The Liberals were sceptical, although some privately supported it; the Nationals under David Littleproud were in favour.

Then Matt Canavan became Nationals leader and the right-wing lobby group Advance started campaigning against the idea (which has much to commend it once you get beyond the knee-jerk reaction).

This week, Canavan and Angus Taylor launched an attack on the plan. They were playing to sheer populism – people hate politicians. Within hours Albanese, judging the proposal would only bring him political grief, publicly killed it in parliament suggesting, in effect, he’d be a mug to pursue it. He said on Thursday the debate would not have been “healthy for our democracy”, and would end without change.

In the process, Albanese threw one of his most senior ministers under the bus, just like he did with Treasurer Jim Chalmers earlier this term when he pulled the rug from under part of Chalmers’ superannuation tax legislation.

The prime minister is fortunate these ministers are not like Paul Keating who, when dudded by Hawke on policy, didn’t take it lying down. Chalmers might sulk a bit, but stays calm publicly. Farrell, a factional hard man, just sucks it up.

Albanese is bringing his cautious, pragmatic approach to dealing with what is likely to be the worst crisis he will have to face in his prime ministership.

As the fuel crisis started to unfold, the prime minister mostly left the running to Energy Minister Chris Bowen. But a week ago, with the situation deteriorating, the PM changed tack, becoming engaged in a major way. By Monday, National Cabinet was meeting and the federal government announced its excise cut, together with and followed by other emergency measures.

Albanese’s strategy is multifold. Get ahead of the crisis where possible. Be seen to be responding. Try to maintain community calm, while at the same time warning about the risk of things worsening. And bring the public along.

Albanese became preoccupied with communicating, prompting his Wednesday night address to the nation. It was designed to grab public attention – paradoxically, with the PM so visible on a daily basis, “cut through” actually becomes harder.

Predictably, sections of the media panned the address. But that is to overthink it. It aimed to reassure, with the message that people should have a normal Easter, while realistically foreshadowing difficult months ahead. The suggestions of what people should do to save fuel (just take what you need, use public transport where you can) came with the message this would help those (like farmers, tradies and nurses) who have to drive.

Albanese is fighting off fears among some people that we’re headed to a COVID-like situation of extreme restrictions on daily life. He’s been anxious to avoid (so far) the “r” word, rationing, which is seen as having overtones of the COVID lockdowns.

In fact the comparisons with COVID are mostly irrational. COVID was totally different. This crisis might be full of danger for the economy and uncertainty for individuals, but COVID was about life and death. We’ve been through fuel crises before; there was no precedent in living memory for COVID.

Also, what Australia did during the pandemic, at least in the early stages and despite mistakes and excesses, was regarded as positive compared to many countries, in terms of lives saved. But in memory and in light of the lingering effects on young people, the response has come to be seen by many as wrong-headed.

The PM’s Thursday speech at the National Press Club was another effort to get messages out from an elevated platform. One notable feature was his declaration that the fuel crisis would not derail the government’s intentions to pursue reform in the May 12 budget.

Chalmers has been talking about plans to use the budget to advance tax reform and other changes. However many questioned whether new circumstances would lead Albanese to kill this drive.

But the prime minister said on Thursday this would be “our government’s most important budget to date and it will be our most ambitious. It has to be.”

“Economic reform that drives growth, boosts productivity, helps tackle inflation and lifts living standards is always necessary. And in times of uncertainty such as this, it is urgent,” he said.

They may be comforting words for Chalmers; they also set a marker for judging the budget. It’s more than a month away and a lot of its key decisions are yet to be taken – Chalmers has said it will be finalised later than usual.

One area that should be addressed in the budget, or separately but urgently, is a plan to put Australia’s fuel situation on a stronger long term footing. Australia has only a month’s supply in reserve, much less than many countries. Our refineries are down to two. Albanese was vague when asked about the longer term plans for fuel security, saying the government would consider measures “in a practical way” but pointing to the huge cost of going to a 90 day reserve (our international obligation).

The Iran war has shown how easily our position can be compromised. How our supply chains would be placed in a conflict in the Pacific doesn’t bear thinking about. A comprehensive, detailed, credible fuel plan should be at the centre of any “reform” agenda.