There’s no escaping Donald Trump. Countries in America’s neighbourhood – particularly Mexico, Canada, Panama, and Greenland – are bearing the brunt of his immediate policy pronouncements. However, his impact is much wider than that.
In Australia the new US president’s tariff diplomacy has already shaken both the share market and the currency market. Australia’s vast mining sector is a likely loser in any international trade war, especially if it involves China. And what’s bad for the miners is bad for the country.
Volatility is the order of the day as markets await clarity on which Trump tariffs are just negotiating tools, and which will ultimately stick.
Given that the US has run a trade surplus against Australia for decades, it’s hoped that Australia’s own exports to the US might at least escape the tariff net.
In an interesting and perhaps inevitable twist, there’s increasing conjecture that Trump’s influence down under will be more than just economic. It may also be cultural and political.
Australia faces a federal election on or before 17 May. The current Labor government is only in its first term and would ‘normally’ be expected to win again or, at worst, to lead a minority government.
However, these are not ‘normal’ times.
Labor and the Coalition had been neck and neck in the polls for several months but a narrow gap in favour of the Coalition now appears to be emerging.
Some commentators suggest that the Trump factor is helping the center-right Coalition.
The leader of the Coalition is Peter Dutton a former policeman and a recognised conservative, particularly on social issues. New Zealanders may remember him from his days as the Home Affairs Minister in the previous Australian government. He was a strong advocate of the ‘section 501’ programme under which Australia deports kiwi non-citizens with a criminal record. Back in 2021, Dutton referred to this as Australia ‘taking the trash out’.
Dutton’s ‘hard man’ persona has been criticised as electorally risky on the grounds that it may repel many women, and many ‘teal’ voters who hold the key to wealthy but progressive inner-city electorates that were once safe Coalition seats. To broaden his appeal, he appeared to be softening his image through 2024.
However, since Trump’s election last November, Dutton’s been sending mixed messages.
In recent years, Australian politicians have frequently appeared at press events before three flags – the Australian flag plus the Aboriginal and Torres Strait Islander flags. But in December Peter Dutton announced that if he became Prime Minister he would only stand before the Australian flag. He described Australia as ‘a country united under one flag’ and said the use of multiple flags was ‘dividing our country unnecessarily’.
That sounds like a politician who thinks there are votes in the culture wars.
Last month witnessed an even less subtle nod to Trumpism. Just days after the US president signed executive orders aimed at reining in ‘diversity, equity and inclusion’, Dutton made his own play for the same territory.
In a major speech to a right-wing think tank, Dutton attacked the current Labor government for adding 36,000 new public servants in Canberra. Top of his list of unwelcome bureaucrats was ‘culture, diversity and inclusion officers’ which he said ‘do nothing to improve the lives of everyday Australians’.
In the same speech Dutton castigated the Labor government for its referendum on a proposed Indigenous Voice to parliament. In his words, the referendum ‘only sought to divide our nation’.
The ‘Make Australia Great Again’ hats can’t be far away.
Spare a thought for Prime Minister Anthony Albanese. He’s now facing both Trump-induced economic volatility and an opponent taking tips from the Trump political playbook.
Of course, the reality is that the Albanese government was already in deep electoral trouble thanks to one stand out issue – the cost-of-living crisis. Every poll shows that the cost of living is the primary concern for a majority of Australians.
Rightly or wrongly voters blame the incumbent government for their current problems. The inflation curse has been a factor in the toppling of numerous governments around the world over the last twelve months. It may be difficult for Australia’s Labor government to buck that trend.
And inflation isn’t Albanese’s only challenge. At the last election he set a target of 1.2 million new homes by 2030. The country is currently not on track to meet that target. (Albanese obviously wasn’t paying attention to the headache a housing target caused for Jacinda Ardern.)
Immigration is another stumbling block. It’s blamed for everything from overstretched infrastructure to skyrocketing rents, and the government is struggling to bring it under control. But cutting back immigration is a double-edged sword. Foreign workers are desperately needed both to build the new houses Labor is promising and to work in the rapidly expanding care sector.
A wild card at the coming election is the impact of the Israel/Palestine conflict. With 30% of the population born overseas, Australia is a very successful multicultural society. Until recently foreign conflicts have not caused significant violence or hatred back in Australia and have not had material electoral consequences. That may be changing.
Over the last year Albanese’s government has been condemned for being both too tough and not tough enough on Israel. It cannot win on such a fiendishly complex and contested issue.
A significant proportion of Australia’s Muslim population lives in a handful of Labor-held seats in western Sydney. There have been calls among that population to punish the Labor government at the next election for its stance on Israel. It will be fascinating to see how this plays out.
How is Albanese seeking to overcome all the electoral obstacles before him? Unfortunately, he’s adopting the increasingly popular technique of Australian politicians – electoral bribes. Like his opponent Dutton, the PM is not offering any kind of grand vision or major reform to fix the country’s productivity problem.
Electoral bribes are dangerous in the current economic environment. For the last two decades, successive Australian governments have relied on mining-generated budget windfalls to pay for their electoral generosity. Windfalls may be harder to come by for the lucky country if Donald Trump’s ‘deal making’ damages international trade.
If it triggers a full-blown trade war with China, Australia will be a major casualty.
*Ross Stitt is a freelance writer with a PhD in political science. He is a New Zealander based in Sydney. His articles are part of our 'Understanding Australia' series.
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