Albanese’s budget woes may harm Andrews’ chances of a third term

For many years Melbourne was left off the travel itinerary for successive Liberal prime ministers.

Unless you worked for a certain carbon fibre wheels manufacturer in the marginal seat of Corangamite, or at a garden supply store in ultra-marginal Deakin, chances are you may have missed seeing Tony Abbott, Malcolm Turnbull or Scott Morrison south of the Murray River.

But that’s about to change.

Prime Minister Anthony Albanese and Premier Daniel Andrews together this week at Monash University Credit:Eddie Jim

Prime Minister Anthony Albanese was back in Melbourne on Monday spruiking a new mRNA vaccine manufacturing facility to be built at Monash University, alongside Premier Daniel Andrews.

The two men have been friends for 25 years – at one point housemates – and are also members of the same Labor faction.

Three months after his election victory, Albanese’s gloss is yet to wear off, making him the obvious choice for Victorian Labor to deploy ahead of polling day. But that could all change come October.

This week marks 100 days until the state election and Victorian ministers remain quietly nervous about any potential pain that could be caused by the Albanese government’s first budget – which will be handed down 32 days before Victorians head to the polls

Albanese has made it clear that the budget will need to “put the brakes on” federal spending – a time-honoured theme of first-term budgets.

In lieu of sweeteners for his Victorian comrades, Albanese has declared the government will stick to its election commitments and search – line by line – for further cuts to help improve its bottom line.

This spells trouble for the Andrews government which is carrying the largest debt of all states and territories – projected to top $162 billion by mid-2025 – and will need help getting out of the red.

Prime Minister Anthony Albanese has declared the government will stick to its election commitments.Credit:Alex Ellinghausen

After years of complaining about being short-changed on infrastructure, Labor sources say the state government was banking on a significant contribution from Canberra to help it build the Suburban Rail Loop.

The urgency is greater given the state parliament’s budget office estimates the cost of building the first two stages of the Suburban Rail Loop is now expected to cost up to $125 billion – more than double the government’s initial estimate for the entire project.

So far, Albanese has offered up $2.2 billion for the eastern section, well short of what the Andrews government would like. Any more cash will hinge on an independent assessment of the plan by Infrastructure Australia, which Albanese established as infrastructure minister.

With hospital beds full, patients queued outside, the state government is also desperate for a long-term funding solution from Canberra to help it turn around its buckling health system.

Albanese has already bowed to the demands of the states and agreed to extend its increased health funding for COVID for six months until December, meaning it will expire one month after polling day leaving voters to ask, so what’s next?

The Andrews government will also be dealt another pre-election blow with the federal government’s temporary 22-cents-a-litre cut to petrol due to expire on October 1, about six weeks before early voting centres open.

Labor MPs recall with fear the impact of Tony Abbott’s decision to bypass parliament to hit motorists with higher fuel taxes 19 days before the state election in 2014.

At the time, the then Victorian premier Denis Napthine hit out at the petrol price hike and the impact it would have on families and business. It was a brave move, but he had little choice. Few think Andrews will do the same.

The conventional wisdom in Australian politics has always been that voters are capable of distinguishing between state and federal politics.

While they might not be fully across the intricacies of section 51 of the constitution – the bit that effectively divvies up government responsibilities – they are broadly aware of which level of government employs nurses and who collects income tax. Or so Labor hopes.

In recent years pollsters and political strategists say the lines between federal and state responsibilities have been blurred, driven in part by the major parties making policy decisions and doling out cash for projects beyond their areas of responsibilities.

Take the recent federal election when the Coalition encroached on state and local governments by offering cash for new sporting pavilions and BMX tracks. Labor was also caught policy trespassing when it pledged hundreds of thousands of dollars for dog parks and local walking tracks.

Party insiders believe this encroachment has simply intensified the public’s demand for help. Families struggling with rising interest rates or waiting in hospital emergency wards no longer care who is in charge, they simply want help from those fighting the next election.

This creates a problem for the Andrews government. Blaming Canberra for crumbling hospitals, rising petrol prices or a swelling infrastructure bill simply won’t work.

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