Katina Curtis: RBA interest rates and Trump tariffs could derail even the best-laid election campaign plans

The first week of an election campaign grabs people’s attention briefly, before they decide they’ve had enough of politics, thank you, let’s just get it done. That’s why it was such a big deal three years ago when Anthony Albanese forgot the cash rate and unemployment figure on the first day. The Prime Minister is more practised and somewhat more polished this time around. And, with Labor’s long, slow downward slide in the polls halted, he’s more confident. Peter Dutton has spent the first four days of his campaign batting away questions about actual detail on his power price policy — which so far is all about lowering electricity bills on the east coast, at least until the nuclear reactor gets built in Collie sometime between 2050 and never. But their best-laid plans could go awry this first week, thanks to three known unknowns. The RBA makes a call on interest rates on Tuesday, Donald Trump makes a call on his “Liberation Day” tariffs on Wednesday in the US, which is also the day the High Court makes a call on another of the cases spun off from the 2023 NZYQ indefinite detention ruling. Firstly, the Reserve Bank. Its decision in mid-February to cut interest rates for the first time in more than four years marked a turning point for Labor’s political fortunes. It offered a psychological boost to the millions of mortgage holders who have borne 13 rate rises over the past three years. The first of those rises was smack bang in the middle of the last election campaign, but it gets added to Labor’s lot since all the others happened under Albanese’s watch. So, February’s cut was a clear signpost that the rhetoric from Albanese and his Treasurer Jim Chalmers about the economy turning a corner could be believed. The central bank is unlikely to move on rates today. The market doesn’t think so, the politicians don’t think so, and governor Michele Bullock has pointed to cuts likely being later in the year, possibly in May just as the election is receding into memory. But the focus on rates will get the political conversation back onto the economy — a fight Chalmers is raring to have. And just like a 10 per cent chance of rain means it might actually rain, there is the slimmest of chances the bank will cut. Second, Donald Trump. Unlike predicting the RBA’s movements, the markets are terrified about what the US President might do. Details of what his pledge to impose “reciprocal tariffs” means in practice are sketchy. Nevertheless, American lobby groups have seen it as an opportunity to reopen long-held grievances against Australia on everything from pharmaceutical subsidies to wheat and beef export arrangements to the GST to moves to force social media companies to make their platforms safer. Trump last week simultaneously claimed that the imposts would be laid on all countries and that “we’re going to make it very lenient”. What that means is anyone’s guess — but it will be up to Australia’s political leaders to clean up whatever mess eventuates. Labor isn’t overly hopeful but insists it’s prepared for any outcome. “Our Government is engaging with the Trump administration, strongly advocating for Australia’s interests. Australian businesses, workers and consumers are at the forefront of these discussions,” Trade Minister Don Farrell said. “Let me be clear, we will never trade away the things that make us the best country in the world.” No matter how prepared the Government is, Dutton will paint anything short of a complete exemption as a failure. Dutton is conducting the tricky balancing act of insisting he’s the only leader equipped to deal with Trump while not wanting to seem too close to the American now he’s become a White House-sized liability in the minds of voters. Little wonder the Greens dropped the social media slur “Temu Trump” into question time debate last week. The third wild card is the High Court. Its NZYQ ruling that non-citizens unable to be deported couldn’t languish in indefinite detention hit the Government, already reeling from the Voice referendum loss, like a tonne of bricks in late 2023. It took a solid eight months and change of minister to recover credibility in Dutton’s preferred battleground of immigration and safety. The ruling due on Wednesday considers a related issue of whether the Commonwealth can lock up criminal non-citizens who have lodged asylum claims, pausing their deportation. The Government won’t speculate on where the court might land. But if it comes down on the side of “let them all go”, you can bet Dutton will be dancing back to his happy place and dragging the election debate with him.