If the economic narrative doesn’t improve, things could get ugly for Labor

Labor's sprawling backbench has been a sight to behold ever since the 2025 electoral bushfire that consumed the Coalition, leaving behind a lot of empty stumps and toasted tussocks.

The view from the press gallery seats drives this home. Below the viewer sprawls the government's 94-seat majority. It dominates the green benches of the lower house, spilling across the chamber's centre line deep into what is normally opposition upholstery.

It’s the literal embodiment of political weight. All those bums on seats.

But for the first time in this parliament's life — and we're pretty much at the half-way mark — those rows upon rows of Labor MPs this week looked more like one of those forests where too much fuel has accumulated.

A lot of wood ready to ignite.

Anecdotes galore of rattled and angry Labor MPs

If polls are right then voters are increasingly in a mood to light the match of a political conflagration. Many of those backbenchers would become oncers.

That was the underlying vibe this week in private conversations in the corridors of parliament, where there were stories and anecdotes galore of unhappy, rattled and angry Labor MPs venting their frustrations.

Some of this might be overblown, but the fact it's out there is new.

Discipline and internal unity have been a mark of the Albanese government, now in its fifth year. Yet for the first time in years, there are plenty of rumblings.

Some backbenchers have been eager to unload their feelings on journalists and several newspapers reported growing agitation across Labor ranks.

Even ministers are at it.

The whole nervous scene was bad enough for the prime minister to resurrect his old line to colleagues — he used it in the lead up to the 2022 and 2025 elections — that despite how tough it feels now, they'll all be "kicking with the wind in the fourth quarter" come election time.

As the grizzling and fretting continued, the prime minister jumped on ABC Afternoon Briefing on Tuesday to put on a brave face.

“We need to be focused not just on — with due respect here on ABC 24 — on the 24-hour media cycle. We need to make sure as well that we’re focused on where we are a year ahead, five years ahead, 10 years ahead," he told Patricia Karvelas.

“What I’m saying is that I’m not spooked by that … we act as an orderly government.”

But gnawing at the government’s storyline of competence is the ongoing effort to sort out the budget, which is now five months old. 

Defeat in the jaws of victory

Legislation has been brought in to address a series of unintended consequences from the introduction of a 30 per cent tax on trusts.

The government says that was always the plan to bring on these changes later this year, given they're not slated to take effect until future years. But the whole thing is another reminder of how much unfinished and unanticipated business sits in the government's in-tray.

Then, at a dinner hosted by the Australian Chamber of Commerce and Industry on Tuesday night, the prime minister appeared to take all the credit for pushing the Australian Tax Office to delay its ban on credit card payments, even though the treasurer had indicated he was already moving to address that issue when it blew up late last week.

Amid talk of the prime minister throwing the treasurer under the bus, Anthony Albanese told parliament that “the whole premise of it is completely wrong”.

“The treasurer and I had a discussion last week," he said. "We convened the expenditure review committee, and we unanimously, right across the leadership of the government, agreed that the decision by the ATO to have a limited period of pause on the ban that had been imposed needed to be extended so that there would be proper consultation with small business.”

It's a solid explanation. And it would have normally sufficed. But with the government struggling to keep command of the political narrative, the negative headlines reinforced the sense that it keeps finding defeat in the jaws of victory.

The credit card surcharge issue was supposed to be a positive thing. Instead, it turned into a headache that reinforced a notion that Labor doesn't understand business or the economy.

Then, on Wednesday, the Senate pulled the rug out from under one of the government's bigger budget savings — the plan to wind back a rebate to over-65s for health insurance, a $3 billion measure that Health Minister Mark Butler said would be redeployed for aged care services.

Crossbench, Greens and Coalition senators joined forces to scupper the measure, which the government promptly reintroduced.

The Senate's growing hostility 

There are different ways to read this clash.

The government says it shows the Coalition is not serious about finding savings, despite its rhetoric on the need for budget repair.

The Coalition reckons older Australians, pensioners in particular, shouldn't be made to pay for the broken budget.

Interestingly, Barnaby Joyce told this column on Friday that “Labor has a point” on the rebate issue.

"If that’s not where you want the savings, then where do you want to find savings?" he said. 

"You've got to move away from just talking about being financially prudent and put meat on the bones."

Either way, the Senate's growing hostility to the government's agenda is worth watching closely.

The Greens under new leader David Shoebridge have come out swinging, eager to throw sand in the government's wheels.

And some of that new mood of disruption is because all the big players are starting to focus on the next election. While not due until May 2028, its influence on political behaviour has already begun. Not least as the prime minister can always call an election early, perhaps for a year from now.

The Greens have already shown they're starting to rethink their approach. And the Liberals will have to make a threshold decision in coming months on whether they stick with Angus Taylor to lead them to the next election. 

If they think he can't deliver, they'll need to give whoever they opt for time to prepare. For now he looks as safe as you'd expect of any major party leader struggling to reach a primary north of 20 per cent to be. Which will make the lead-up to Christmas a nervous time for him.

Labor will also eventually need to make strategic decisions in coming months, particularly about when and how to renew the frontbench, many of whose members have been in their portfolios since 2019.

If the economic and budget narrative doesn't improve, things could get ugly.

"Usually they're brilliant at discipline," Joyce told this column of Labor. "But we've had different views coming forward. When you see a little bit in public you know there's a lot going on behind closed doors."

Jacob Greber is political editor of ABC's 7.30 program.