MARK RILEY: Albanese Government pins its re-election hopes on health

A Federal Budget is the government of the day’s principal economic statement.

It is also a political statement.

A very important one.

It outlines the Government’s values and priorities, telling voters what it’s done over the previous year, what it intends to do over the next several years and, importantly, how much it is going to cost.

The statement Treasurer Jim Chalmers delivers on Tuesday night will be by far the most important of his four Budgets.

It will create a launching pad for the May election, setting the frame for an economic debate that will dominate the campaign and go a long way to determining whether the Albanese Government gets a second term.

After a series of failed resets and false starts, the Government is finally beginning to build some momentum.

It isn’t strong, but it is measurable.

Labor moved back in front of the Coalition, 51-49, in both the Freshwater and Redbridge polls this week.

That was largely on the back of big-ticket announcements on health.

And now it has made another one.

The commitment to further lowering the maximum cost of PBS medicines to $25 is a vote winner.

It lowers the cost of living, has a negligible effect on inflation and resonates with voters, who feel the impact on their wallets every time they go to the pharmacy.

That big pharma in the US is now pressuring Donald Trump to retaliate with tariffs against Australia for restricting the prices they can charge for their medications plays into Labor’s hands.

Albanese can now style himself as the defender of cheap medicines against Trump’s internationally unpopular tariff attacks.

Health is Labor’s go-to issue in election campaigns.

Anthony Albanese now sees it as the major weapon in his quest to prevent Peter Dutton’s impressive Coalition rebuild from removing Labor from office after just one term.

The Prime Minister’s strategy of slashing Medicare costs is both an economic and political play.

Increasing bulk billing and cutting the price of medicines will significantly ease the cost-of-living burden on families.

It mirrors Labor’s 2022 promise, which lowered the maximum price of PBS medicines from $42.50 to $30. That cap has since increased to $31.60 through indexation.

Subsidising medicines costs the budget a big whack.

The total outlay since the last election is now above $9 billion. And that has to be paid for through revenues. That means taxes.

But the Government believes its economic impact on families makes it a worthwhile investment.

And so does its political impact, which is both instructive and destructive.

It instructs voters that the Government’s policy priority is to help with the everyday cost burdens that stifle their families’ aspirations.

But it is also destructive to Dutton’s standing by allowing the Government to revisit some of the unpopular decisions he took as health minister in the Abbott government.

While singing the virtues of the change yesterday, the Government reminded voters that Dutton introduced legislation in 2014 to increase the price of PBS medicines by $5 for most Australians and 80 cents for those on concession cards.

It also reminded them that the Coalition had voted six times unsuccessfully since the last election to disallow 60-day dispensing, which gives patients two months’ supply of some medications for the price of one.

These attacks hurt the Opposition. Its actions prove that. It distributed pre-emptive statements on Wednesday night, assuring journalists it would automatically support the latest PBS price reduction before it had even been announced.

The reason for that is clear in the Redbridge research. Pollster Kos Samaras says it shows that the least committed voters are those aged 45 and under.

They represent 42 percent of the total electorate. And their vote will largely determine the election outcome.

Samaras says they don’t believe either of the political leaders at present. They feel disappointed in Albanese and they are unsure of Dutton.

And they feel let down by both.

The big issue that will determine their vote? Who can deliver the best response on the cost of living.

That is the challenge Chalmers faces on Tuesday night as he gets the chance to set the frame of the economic debate with a narrative based largely around cheaper healthcare.