From the newsrooms of the Sydney Morning Herald and The Age.

This is inside politics.

I'm Jacqueline Maley, it's Friday 31st of October.

Paul chuckle.

Happy Halloween.

Are we at October 31st already?

I was going to say, do you do you trick or treat in Canberra?

Do you like do you celebrate at all?

Do you put a little pumpkin outside your house or something from Woolies or Kmart?

I live in an apartment building, so I'm not sure if the kids could get up there, but I do.

All this talk about, you know, not adopting American holidays, I get that, but I find it a bit naff.

And I do enjoy the kids walking around a neighborhood having fun.

And it feels like a nice community thing.

So I'm all for Halloween, actually.

Yeah.

I mean, we celebrate in a big way in our house, and I just sort of think, well, you know, these kids these days have got a lot to worry about.

Give them, let them have a few lollies and a little bit of joy.

It's exactly the kind of thing we should be encouraging.

Anyway, on to this week's news, because this week we're actually going to talk about the government's weaknesses, which might seem a little bit counterintuitive because Prime Minister Anthony Albanese has been flying so high on the international stage.

We saw him again, like dining and almost canoodling with Trump at this dinner at Asean.

He's been doing very well off overseas.

But back on the domestic front, there's a few weaknesses, particularly in the economy.

Paul, can you talk us through those?

Yeah.

Well, if you were looking at politics from a bird's eye view at the moment, you'd see a prime minister who looks totally unassailable.

He's winning on the international stage.

He's riding high in the polls.

He hasn't faced a really tricky moment.

That's put him under real peril since his huge election win.

That election win totally changed the vibe around the Prime Minister.

He did wear a really bad T-shirt this weekend.

But we're going to we're going to get on to that later.

Really?

Is that your view on the t shirt?

Just morally reprehensible t shirt.

Are you advising the opposition leader?

This is a new term.

Um, we'll get to that later.

Yeah, we'll get to that later.

So in one sense, the Prime Minister is riding high.

He's incredibly confident in private and bubbly and jovial and joking about whether he'll serve 5 or 7 terms.

But there are still structural problems for the government that they haven't solved because their policy agenda has weaknesses, and in some places it's failing to address the big issues in our society and the popularity in the political sense of the government masks that.

But it still exists.

And this week was a good example of that, because there were two breakout issues that went into two of those big problems for the government, one of them being the pretty weak economy.

We're now having employment, unemployment rising at the same time as inflation is ticking up again.

Surprisingly, there's almost certainly not going to be a rate cut this year, and we may not get one until well into next year.

In fact, some economists are saying the trajectory of rates might be upwards.

And so this idea that Jim Chalmers, in the second term of the labor government, would have the freedom and space to start tackling the structural issues in the budget on tax and on intergenerational inequality in a more benign environment where cost of living pressures had subsided and rates would be coming down, is not quite coming to pass.

His reform agenda was was questionable anyway, even when we did think the trajectory of rates was coming down.

But now it's even trickier.

Yeah.

And on another front, the energy transition for all governments around the world trying to pursue emissions reduction is really hard.

It's transformational and was always going to be rocky.

But Labor's having particular trouble getting enough renewable energy into the grid.

They have social licence issues and there are cost issues with renewable energy.

The government likes to say they're the cheapest form of energy and a lot is coming on.

Yet electricity prices remain really high and we saw this week the likely closure of another one of our few remaining aluminium smelters, Tomago, in New South Wales.

It looks like they're going to reject government offers for a bailout, and that will lead to many thousands of job losses.

And this is a kind of canary in the coal mine for our manufacturing sector, which is struggling under the weight of high gas prices.

Yeah.

So basically there were two events this week.

The first one was inflation figures, which you alluded to there, which basically were shocking figures.

I mean, a lot of economists were like using pretty strong adjectives about them.

I saw Shane Wright's face when these figures came through.

Was was he devastated?

Was he shocked?

Was he appalled?

He was a dog.

A dog.

I didn't see him right at the moment, but he I think people were genuinely surprised and people were wondering.

So to let readers know about what the numbers said.

The quarterly figure is crucial because it sums up the last three months.

There's an interest rate decision by the RBA and the Melbourne Cup day.

There was the market was pricing in a pretty significant chance of a cut.

These inflation figures came through and they showed that in the last quarter inflation was around 1%, which means annually that rises up into the threes or fours, which is well above the RBA target band.

And the expectation was for that figure to be somewhere at the 0.6 or 7.

So it's a significant overshoot.

Yeah.

And this sort of raises the Spectre Halloween pun intended of stagflation, where you have a stagnant, stagnant economy, but with inflation on the rise because the other figures, I mean, I did a bit of a deep dive on the ABS website, as you know, as I like to do on a on a lazy afternoon.

It's not good, like the economy is very sluggish.

So there were the the CPI figures this week.

We've got rising unemployment was up to 4.5% in September.

Crucially, like household savings the income to savings ratio fell.

So people are saving less money, digging into their savings more and seasonally adjusted.

In the last quarter, the economy grew just 0.6%.

So the economy's not great.

You know, something that Jim Chalmers will presumably at some point have to answer for.

And then you've got, yeah, the the Tomago aluminium smelter, which is so interesting in a way, because it is the crunch point of really decades of chaotic and silly climate policy or energy transition non policy coming to bear down on a few thousand workers who probably are going to lose their jobs.

Yeah, it's a it's a fascinating case study because it speaks to the broader issue of what our energy policy has done to some sections of the economy.

And it's really tough issue for both the government.

And I mean, the opposition has an easy political win to say the government's costing jobs and that's a clear cut line.

But it does open up this question of what role the government should play in keeping industries like this alive.

The smelter is not profitable, yes, because of energy costs, but also because of international competition, largely from China.

And so the government's in this position now where they are being asked for huge bailouts across the country to keep some of these manufacturing businesses and smelters alive.

And they have to wrestle with this question of how much money do they spend to prop up businesses that will fail anyway?

And is there enough of a sovereignty and national strategy imperative to keep them open, or could we rely on imports in some of these areas?

So Tomago, for example, there is another aluminium smelter in Queensland where there's a state government that's more interventionist and wants to keep it alive.

They have more focus on that than the New South Wales Labor government.

Interestingly, even though they're an LNP government and so labor is in this position where they have to keep these industries alive until more renewables come on, maybe in the middle of next decade or sometime over the next five years when prices hopefully come down and when hopefully they do a gas reservation on the East Coast to bring down gas prices.

But in the interim, there's this really rocky period that the government has been forced to smooth over.

And the question is, how much do they spend on that?

And I mean, the figures that we're talking about to prop up these, these smelters, because this is not the first one that's put its hand up or has it actually looks like this aluminium smelter, which is owned by Rio, will not take the bailout option that the government's offering it.

But other previously other companies have.

And it's we're talking about tens and tens of billions of dollars.

I mean, it's a huge impost on the taxpayer.

And I mean, this brings me to my next point.

Meanwhile, you know, at home, the coalition is sort of slowly but surely, like, I don't know, driving itself off a cliff.

It often looks like, in terms of the defections, in terms of their internal chaos over net zero.

But there is actually, if they were able to get their act together, there is actually a very strong line of criticism against the government, or at least a line of scrutiny against the government, which is this whole we are driving towards net zero.

We are going on this renewables pitch, but it's going to cost the taxpayer a lot of money.

And I don't think the government has been particularly up front about that.

They've got their own political reasons for not wanting to be particularly transparent or particularly facing forward about how much it costs, but that cost will be borne by the taxpayers and certainly deserves a bit of scrutiny from a healthy opposition.

And if they had their own House in order on energy policy, they'd be able to much more heavily focus on the government.

But instead, we spent a week on Monday focused on Barnaby Joyce, who's blown up over the net zero issue.

My position, my position is adamantly against net zero, not a not an amelioration of net zero or a sort of a refinement of net zero or an amendment of net zero.

I want to get rid of net zero.

Get rid.

Of it.

I know you do.

And who's doing this pretty transparent dance in Parliament where he's dangling out the prospect of his defection, which he is planning to execute without saying.

So it is outrageous.

No, I don't need to be part of a discussion.

In fact, it's probably better that I'm not there.

And that is so that the room can have the confidence of what they say stays in the room.

Because, you know, I my position is.

And then as the week has gone on, there's been so much discussion up here in Canberra about a Friday morning meeting of coalition MPs where they're going to discuss their own net zero policy for when they get into government in 2031 or whenever that is.

So they've not landed the politics internally.

They've not been able to convince the public that they've sorted out the energy issue on their side.

And so it just sucks all the oxygen out of their arguments against the government.

There are sort of glimmers of light.

It seems to be someone, someone within the coalition is is leaking out or is briefing out constantly this line.

And we heard it from Tim Wilson when we had him on the podcast a few weeks ago that they do support net zero, but not at any cost.

And you know, what does that mean?

It means it can mean, you know, all things to all people or ultimately nothing.

But um, but it is quite a good line.

And then we saw Scott Morrison, weirdly enough, doing a LinkedIn post this week saying that the commitment to net zero is pure ideology and it should basically be ditched.

And this is, of course, the net zero policy that he signed on to and backed in as prime minister.

But he's now saying the circumstances have changed.

The global environment has changed.

And, you know, we should work towards it, but not at any cost.

So yeah.

The coalition's kind of in some quarters getting a line on this.

Is it.

Is it ever going to be an effective line.

Are they ever going to be able to actually make it into a sort of strategy?

Yeah, I think the Morrison post on LinkedIn, uh, was initially viewed.

And if you just read it quickly, you'd think that he was calling for net zero to be dumped.

And he was pushing the the kind of Barnaby Joyce right wing coalition line that we need to drop all emissions targets.

But I think actually he was trying to clear the path for where.

Sussan Ley is trying to get to, which is to drop the legislated mandate to net zero to create this looser aspiration, which, as you say, can mean all things to all people and to slow down on renewables, put more gas into the system, lean on technologies like small modular nuclear reactors, which don't exist yet, but there is some great hope that they might and hope that the coalition clings on to and really to to do net zero in a more coalition way that satisfies their base, that satisfies their MPs, that they're not going on this renewables frolic that they worry so deeply about with labor.

Yeah.

To to like chill out on renewable the rush to renewables a little bit which by the way is not going to give any certainty to the market or business.

No.

And we need more renewables in the system immediately because that is that is what that's part of what's keeping prices high.

We need more transmission lines.

But a lot of these transmission lines runs run through national and country Liberal Party seats, and people are a bit pissed off about them.

So there's there are trade offs everywhere here.

And it's, it's it's such a it's such a difficult debate.

Can I just sidebar a little bit to Scott Morrison's intervention?

It just seems to me, um, I'm going to include Barnaby Joyce in this as well.

It just seems to me this is the kind of stuff that people hate the most about politicians.

You know, Scott Morrison, maybe, maybe what he said on on LinkedIn was reasonably nuanced.

But basically he's saying the policy that I backed in in government, I now am saying what I really think about it, which is that it's really not that it's really not that worthwhile.

So I'm essentially admitting that I cynically backed a policy for my own political purposes because I had to at the time, but I didn't really believe in it.

Likewise, Barnaby Joyce, who's now campaigning so strongly against net zero to the point where he's like storming out of his own party, like helmed a party that sat with this policy.

He was the deputy PM right when this was put through.

He did get a basket of goodies.

Remember, he got like a $40 billion.

Nats.

Yes.

Slush fund in exchange for this deal?

Yes.

Which never really materialized.

So he now does not have the $40 billion slush fund or whatever.

It was.

20 billion.

So he's.

But isn't.

This.

Everything that people hate about politicians?

It's like, oh, now that you're telling us what you really think, you're admitting that you had absolutely no conviction with the policies that you were sort of backing into the public at the time?

I don't know, it just really struck me that it's particularly cynical on this stuff.

Morrison would argue, I don't disagree with you.

Morrison would argue that.

And he put this part of this in his LinkedIn post.

He would say that the global zeitgeist has changed from 2021.

You're seeing a bunch of different European countries go slower on renewables now.

The transition has been rockier than we thought.

There are new technologies emerging.

There was a threat of a carbon tariff that would have hurt our economy if we didn't sign up at the time.

And Morrison's a pretty pragmatic operator.

He's not someone who would ever push for the Liberal Party to to move away from a sense that it is serious about climate change.

But, you know, he's read the tea leaves and put his finger up into the into the air and read the direction of travel.

I guess it's it's the, the pragmatism.

Where does pragmatism sort of venture into into cynicism, I don't know.

That's a that's a question for philosophers, not us maybe.

But it just strikes me that listeners had heard labor ministers in private talk about their own policies, which they do and don't disagree with.

Well, I also want to talk about that, because I do think that the the government is not particularly upfront about how much this is going to cost.

We had Chris Bowen sort of saying this week, don't worry, there's help on the way.

There's going to be a surge of renewable energy into the grid and that will bring energy prices down.

But these inflation figures, which have really kind of shocked everyone, and part of part of the inflation figures, of course, is electricity prices.

I want to just talk quickly about, um, Anthony Albanese's abhorrent values breaching tee shirt.

Can you just tell us catch people up on that in case they missed it, this incredibly important piece of news.

This was the I think this is the problem.

Is it is this the issue that's captured most attention this week?

And the t shirt elbow wore as he stepped off the plane from DC has come back to bite him.

Let's have a look at it.

We all thought it was kind of funny, a bit of daggy coolness going on, but not everyone is happy.

Arriving back in Australia from his overseas trip, the Prime Minister stepped off the plane proudly wearing a t shirt with the name of a band, Joy Division, whose origins are steeped in anti-Semitism.

So I was walking into the House of reps when the opposition leader, Sussan Ley, was delivering this speech.

She did it there, called 92nd statements.

And yeah, an MP can get up just before Question Time as most of the other MPs are filing in, and the government usually gives it to a backbencher or someone who wants to make a sharp political point.

And it often riles people up.

And there's some shouting before Question Time.

It's a bit of fun as well.

And I walked in halfway through and I heard her talking about Joy Division, and I heard her talking about anti-Semitism and this been a bad judgment call for the for the Prime Minister to have worn this very famous band t shirt for Joy Division's Unknown Pleasures album, which everybody, a lot of our listeners would know if they saw it.

The name was taken from the wing of a Nazi concentration camp, where Jewish women were forced into sexual slavery at a time when Jewish.

And I was I've been a Joy Division fan, not a huge one.

I've never I've never actually knew that was the historical name, where it came from.

And my colleague Natasha wrote about the genesis of how this became an issue.

There was a small group of right wing accounts on X posting about this link between the name and concentration camps.

Uh, the Joy Division band members have talked about this over time.

They were not Nazi sympathizers.

They had no, uh, contentious views about Jewish people.

It was just a kind of punk.

A snappy name.

Yeah, a snappy, artistic name chosen to, you know, be edgy.

I guess I don't know enough about their thinking on it.

Um, so this emanated online.

It wasn't really getting any legs.

And then Sharri Markson, the conservative commentator on Sky, did a piece on, you know, linking this to the long standing debate about the Prime minister's alleged on on the conservative side argument, alleged failure to tackle anti-Semitism.

He actually got told about the history of the name in a podcast 2 or 3 years ago.

He was unaware of it and he said, oh geez, I didn't know about that.

And so Markson's argument was that given he knew the connotations, he should never have worn the t shirt again.

And he was warned.

I didn't hear any politicians speak about it privately or publicly, until Susan Lee decided to get up and make a point of this just before Question Time, and to say that her criticism fell flat would be a bit of an understatement.

Most of her colleagues were pretty stunned that she made a point of this.

And they publicly backed away from it or refused to back her.

Yeah, most people just found it a pretty bizarre and potentially slightly desperate attack that made Sussan Ley, fairly or otherwise, appear as if she was pandering to a kind of sky.

base, and trying to offset the argument that she herself is not sufficiently pro-Israel because she's previously held strongly pro-Palestinian views.

So this is a weak point for her.

On the conservative side, that occasionally it looks as if she feels the need to, you know, overcorrect on.

I mean, it was to me completely bizarre.

And also, I think it does call into question a little bit Susan Lee's judgment because she has they haven't been very widely publicized, but she has made some quite good speeches on, you know, fiscal responsibility, on tax reform.

Peter Hartcher, in his column last week, pointed out that she gave a speech where she talked about tax and basically committed the next coalition government under her to decreasing income tax.

But that was not a headline anywhere, because the coalition is just allowing itself to kind of get lost in this internal politics and these silly little arguments.

It's sort of like woke culture, the worst of woke culture or the worst of cancellation culture sort of moves to the right where it's like we're combing through everything to try to take offense at things.

She has given some some really solid kind of headland speeches on economic policy in recent months.

But those in the modern, modern media environment, it's quite hard to get that kind of it's old school.

It's old school to, to have those, um, those kinds of speeches get much airtime.

They're important.

We write about them.

But the things that cut through tend to be breakout moments, unexpected quotes.

I mean, and I think the problem for Susan Lee is that this Joy Division attack came a week or two after she called for Kevin Rudd to be sacked as US ambassador, which was also widely criticized as being a bit of an overreach, uh, and also not backed in by some of her colleagues.

So there is a bit of a sense around the party room, the coalition party room.

I was talking to one MP this morning who said that there there is a sense that, look, no one's moving against her imminently, but even her supporters are just losing a bit of faith and a bit of confidence in her judgment, her office's performance and her ability to build up strong long term arguments on economics, on energy, and to come into Parliament with real force to joust with labour.

There is there is a diminished.

It's been a while now.

We've been been this been in this term for however many months.

And she for a period was doing well in the polls.

That's changed.

The party polling hasn't really ticked up, and there is a growing sense that she's drifting.

I'd say.

Yeah, yeah.

Well, you know, Bill shorten was on our podcast last week and he spoke, spoke about the Big Mo, which I quite liked as a term, and the fact that that momentum is very important in politics.

And it just seems like Susan Lee is trying to work up a bit of momentum, but she keeps sort of sputtering out.

And remember what he said about not needing to make an attack at every moment.

Yeah, she should have taken that advice on the on the band.

To keep to to hold your tongue, which is not something that we do very much on this podcast, I should say, just quickly.

The Liberal Party has now said that the review that it's doing on the net zero policy will be wrapped up, and they will actually come upon a land upon a policy by Christmas.

I haven't quite said that specifically.

I think our colleague Phil Currie wrote that.

I've read it in the Australian Financial Review this week, so it must be true.

Yeah.

I don't think it's they haven't set a date specifically around Christmas, but I think they do hope to get something wrapped up this year.

It may drag on.

It may not.

It's hard to know.

They have this meeting on Friday where instead of Dante and the energy spokesperson coming in with a policy for people to debate, it's just another kind of pass the baton round.

Let's have a chat about views which most, most MPs are not looking forward to it.

They think it's pretty unhelpful for everyone to just air their views.

Again, the views have well and truly been ventilated.

Andrew Hastie is one of the leading net zero sceptics.

He's going back to Perth.

A bunch of MPs are going back to their families and will not engage in this meeting.

That's been kind of declared a showdown, so they might land something by the end of the year.

I think their preference would be to do it in one of the dead periods when there's not much media focus on politics.

So maybe in the middle of December, which would allow them a bit of a clean slate to get stuck into some different issues early next year.

And I think that first three months, first 3 or 4 months of next year has been put to me as quite critical for Susan Lee's leadership leading into the next budget.

If she's not able to lift the party's fortunes to develop, particularly an economic attack line against the government going into Chalmers first budget, particularly given the parlous state of the nation's finances given the inflation problem, the unemployment problem.

I think you'll see growing questions about her leadership around budget time when Parliament comes back, if the situation doesn't improve for her.

Okay, well, before we think about Christmas and the summer holidays, we have to think about Halloween.

So I hope you at least get a lolly or something.

Are you going to stock up for the stock up for the kids?

Well, no.

See, we go out and trick or treat, so you kind of can't do both.

We just leave a little bowl of lollies out for the kids.

And just to take a you're a you're a leaning on a lifter.

You you're.

Taking.

You know, we do I do I participate fully in the Halloween economy on both sides.

No, that's really fun.

Have a good time.

It is a really fun, fun day.

All right.

Thanks for that, Paul.

We'll see you next week.

Talk to you next week.

Today's episode was produced by Kai Wong.

Our executive producer is Tammy Mills.

Tom McKendrick is our head of audio.

To listen to our episodes as soon as they drop, follow Inside Politics on Apple, Spotify or anywhere else you listen to your podcasts.

To stay up to date with all the politics, news and exclusives, visit The Age and The Sydney Morning Herald websites.

To support our journalism, subscribe to us by visiting The Age or smh.com.au.

Subscribe.

I'm Jacqueline Maley.

Thank you for listening.