AARON PATRICK: Facing an $800b property crash, Anthony Albanese breaks one of the great rules of politics

A clear-if-unwritten rule has long operated in Australian politics: don’t mess with property.

Today, Anthony Albanese mocked the rule.

After data was published Wednesday morning reporting the biggest price falls in four years — clear evidence of the Budget backlash — was the Prime Minister sheepish in question time? Did he repeat his previous assurances property prices would continue to rise, thus protecting a foundation of the Great Australian Dream?

Not for a second. Instead, Mr Albanese quoted a would-be buyer of his first home, Christian from inner-city Melbourne, who has shifted from saying “it just feels like a runaway dream” to “I’m feeling a little bit more confident now”.

That was a lot different to his message on television Wednesday morning, when he made the questionable assertion that “as a result of these changes, there’ll be increases in the value of houses”.

No one really knows what the medium or long-term effect will be. The federal Treasury forecasts prices will grow two percentage points slower than otherwise, a prediction contradicted by what this government might refer to as owners’ “lived experience” and what was once called “what is happening”.

AMP economist Shane Oliver predicted today property prices will fall 7 per cent from their peak. If the noted pundit is correct — and other economists are more pessimistic — home-owners will be $860 billion poorer in a year’s time.

To put the figure in perspective, and get an idea of how it could shake confidence, the amount is five times what the federal government will spend this year on health, disability and ageing. It is 10 times the defence budget.

While most of the amount would be in unrealised losses, such a large hit to the nation’s wealth will inevitably crimp spending on home extensions, holidays and other discretionary spending, adding to the economic pressure of higher interest rates and uncontrolled inflation.

Question time battle

That is in the not-very-distant future. Today, Parliament experienced a battle of two narratives: Coalition complaints about rising prices and government boasts of bounty.

“Under Labor the price of everything is going up,” was how Liberal leader Angus Taylor opened question time after both sides paid tribute to the late Australian of the Year, Richard Scolyer.

“Electricity is up 38 per cent. Gas up 37 per cent. Rent up 23 per cent. Health costs up 17 per cent. Education up 21 per cent and childcare fees are up 27 per cent.

“Prime Minister, how are Australians supposed to get ahead when Labor keeps making them pay more?”

It was a strong question, and was met with a list of government policies that carried the rhetorical power of timeliness.

“Today, wages go up,” the Prime Minister answered. “Taxes go down, today. Paid-parental leave expanded to six months today and superannuation paid on paid-parental leave. Workers superannuation as a result of changes we have made get paid from today on pay day, making a difference. All urgent care clinics are made permanent today. There are more cheaper medicines from today.”

Memo to the opposition: the start of the new financial year is a tough day to put a government on the defensive.

Neither side’s arguments were entirely honest. While excess government spending isn’t helping inflation, the cause of price rises is complex and driven by forces beyond any politician’s control. Similarly, Labor ministers’ claims of credit for a minimum wage increase today glossed over or ignored that it was the independent Fair Work Commission’s decision.

This is Parliament. Accuracy is optional.

Nirvana

There was an important fact that did not get as much attention as it might have. Today’s tax cut is a one percentage point reduction to 15 per cent in tax charged on earnings from $18,201 to $45,000 this financial year.

As they have done for the past year, Mr Albanese and Treasurer Jim Chalmers delighted in pointing out the Coalition promised at the 2025 election to reverse the cut. (The government does not mention the money would have been used for a tax cut elsewhere.)

The opposition’s come-back was put on the record today by a couple of obscure MPs, Alison Penfold and Andrew Willcox, suggesting the Coalition knew it needed a response but didn’t want to remind voters of one of its more quixotic tactical decisions.

“Isn’t it true that the government’s 70¢-a-week tax cut has already been eaten up by inflation?” Ms Penfold asked the Prime Minister.

Which is true — it is related to a problem known as “bracket creep” — but was of no interest to Mr Albanese, who used his answer to drop a new version of a Labor phrase designed to associate the Liberals and Nationals with One Nation.

“The three parties of grievance had this right-wing nirvana,” he said.

Was he speculating about an ecstatic happiness triggered by a conservative mind meld? Or was he referring to Nirvana lead singer Kurt Cobain, who found the weight of existence too much and committed suicide?

His meaning remains elusive. Mr Albanese wasn’t allowed to finish the sentence because of the length of his answer.

Returning to matters of substance, while Mr Taylor has received a lot of criticism this week for the Coalition’s decrepit polling, he is rarely given credit for being one of the first political leaders to offer to solve bracket creep by raising tax scales by the rate of inflation.

Such a policy would end annual, automatic tax increases, which are sometimes returned through reductions in the marginal rates portrayed by governments as examples of superior economic management.

Strangely, in the six weeks since the indexation policy was proposed, Mr Taylor hasn’t talked about it much, including today, raising a question: what is going on inside that big brain of his?