Faced with growing challenges at home and abroad, the Albanian government must focus on the long term
Any thought of a honeymoon period for the new Albanian government is already diminishing as challenges mount both at home and abroad. The Reserve Bank of Australia raised interest rates for the second consecutive month today, marking the first consecutive rate hike in 12 years. Wages will remain stable and the cost of living will continue to rise: mortgage repayments are on the rise and the effects of the gas and energy crisis will continue to be felt in the economy for the months to come. On the international stage, the new Prime Minister and his Foreign Minister, Penny Wong, have been swift, but the range of challenges Australia faces in our region alone is daunting. Much has been made of Wong’s early travels to the Pacific neighbors, but none of the issues she will address (most related to China’s territorial influence or climate change) can be immediately resolved. At best, as with Anthony Albanese’s visit to Indonesia this week – and, indeed, as with many of our domestic political issues – the new government has only just begun to weave its way through a pile of neglect. left by the Morrison government. Its immediate task is to find answers that do not aggravate existing problems.
The Reserve Bank raised the official exchange rate 0.5 percentage points more than expected, the biggest one-month increase since the start of 2000, and warned that more rate hikes are on the way. Risk and uncertainty have been entrenched in the economy for many months, as has an expected rise in the rate of inflation. So there is no magic cure for rising costs to consumers, either from the Reserve Bank or the government. There are also other worrying signs: building permits are down 32% this time last year, hitting a construction industry that was already suffering from the collapse of some large companies.
Various commentators are already trying to blame the energy crisis on a government whose ministers have been in office for an entire week, and they have also begun digging into the distant past to find out who is responsible for the failure to put in place energy. a policy that would have reserved some Australian gas for Australian use. Spoiler: neither previous Labor nor Liberal governments introduced one. More recently, and this is for News Corp commentators in particular, we had a Coalition government in power – for nine years.
The only weak gas policy the Morrison government left in place was a trigger that could temporarily limit exports and increase domestic supply. But that won’t work until January at the earliest. Ukraine-related price spikes aren’t going away either. Combined with the costs caused by the collapse of our coal-fired power plants, the winter is going to be difficult for many low-income earners.
Albanese and his new ministers will be tempted to offer temporary relief (especially to low-income people), which will be welcome and needed. The most important thing will be to take a few deep breaths and take a long-term view of what is needed in terms of a steady transition to a cleaner and fairer economy. Labor ministers have had ample time to consider it, so they are likely ready to take action, albeit in the cautious way they have all repeatedly promised.
As with re-engagement with Pacific nations, Albanese’s trip to Indonesia offered promising signs. Our close neighbor is not in the top 10 of our import or export markets. And the relationship has been rocky for many years, to the point where it has sometimes seemed like Australian leaders don’t understand that Indonesia is Southeast Asia’s largest economy, a market of 270 million people. , and that it should be one. of the world’s five largest economies in the future.
Albanese, meeting President Joko Widodo yesterday, acknowledged that Australia’s economic relationship with Indonesia has “struggled to keep pace” with the country’s rise, and his visit so early in his term as Prime Minister is a sign of an intention to change that. If Albanese can also begin to revive shaky relations with China, his government will go a long way to ensuring Australia’s future prosperity and security in the region. It will still be a long road.
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