Image: Lukas Coch/AAP

Philip Lowe mightn’t be a household name but the Reserve Bank governor finds himself catapulted right into the centre of this election campaign, in which events are proving more important than policies.

The very large inflation spike has economists declaring vehemently that the bank should put interest rates up on Tuesday, rather than waiting until June, after the election.

Both sides of politics accept the necessity and inevitability of rates rising soon. Lowe and the bank are independent and non-political, but they would also be aware a decision to hold off the increase for another month could be seen as political.

If rates do go up on Tuesday, what impact will that have on the election?

No-one can be sure. Like a number of issues in this election – notably the Solomons-China security pact and climate change – cost of living, including higher interest rates, would cut both ways.

Some voters, under increasing financial pressure, would take out their frustration on the government.

But there is a Labor fear that if rates go up next week, that could present an opportunity for Scott Morrison. The government could use it to exploit the “uncertainty” theme at the core of its campaign, reinforcing the message that change would be a leap into the unknown in scary times.

The Coalition would be helped in prosecuting its case by the fact rates have been rising internationally, so blame can’t credibly be sheeted locally. Second, Anthony Albanese’s rating with voters on economic management is very low. In this week’s Australian Financial Review Ipsos poll, 48% picked Morrison as “having a firm grasp on economic policy” while only 31% said that of Albanese.

Focus group research backs the point about Labor’s potential vulnerability. Simon Welsh, from the (Labor-leaning) firm of RedBridge, says that for some time a group of voters has been “pivoting” away from issues of Morrison’s character and leadership towards economic issues and cost of living. This “pivot” started around the time petrol prices escalated, and has continued since.

“If there is a rate rise next week it will add more fuel onto economic concerns,” Welsh says. “People don’t have confidence that there is a plan from Labor on the economy and interest rates. Their confidence in the Liberals is based on a ‘generic brand’ of them as better money managers.”

Even if the Reserve Bank stayed its hand next week, the shadow of the certain later rise would hang over the rest of the campaign.

With the six-week march to May 21 at the halfway mark, the next week will be crucial for Albanese, as he returns from COVID isolation to the trail.

This is a really risky time for him. Labor has mainly managed the absence (aside from some virtual interviews) of its leader as well as it could. Apart from deputy leader Richard Marles struggling to explain past statements on China, opposition frontbenchers have held up their end.

Shadow treasurer Jim Chalmers appeared on top of his portfolio; finance (and campaign) spokeswoman Katy Gallagher looked very solid, shadow foreign minister Penny Wong sounded authoritative. Campaign spokesman Jason Clare has become a bit of a star.

There have been questions as to why Tanya Plibersek isn’t doing more, and talk of her (and some others) being “frozen out”. Albanese and Plibersek (both from the left) are not close, but both camps play down the suggestion she’s not busy. In 2019 she was more prominent, but she was deputy leader and her education portfolio more central in Labor’s pitch.

While it was better for Albanese, if he was going to get COVID, to contract it early, he’s now returning at a very challenging time, with Labor’s formal “launch” in Perth on Sunday. Not only will his performance be minutely scrutinised, but there’s a lot of travel involved.

Albanese said on Thursday: “It’s been a difficult week […] My doctor tells me I have to take things easy, particularly in the first few days to not do the 16 and 20-hour days that I was doing.” (He shouldn’t have been doing 20-hour days anyway, but that’s another story.)

Morrison won’t hesitate to exploit any sign Albanese has been slowed by COVID. He noted pointedly on Thursday, “He’s had a pretty quiet week. I remember when I was in iso, I had a very busy week attending QUAD summits and doing all those sorts of things.”

The PM was also pressing to have the remaining debates quickly. “It’s time to make up for some lost time. I’m happy to do two debates next week. Seven and Nine have both offered me two debates next week.” (Labor has its own ideas.)

Albanese still has a great deal of work to do if he’s to convince undecided voters he is a reliable alternative. At the same time, he has to ensure his campaign is paced to match how well he is feeling. It could be a difficult balance.

A feature of this election is that it has multiple fronts. Apart from the national campaign, there are regional battles, the individual seat contests, and almost a separate election revolving around the “teals”. This latter has become a defining feature of election-2022.

Teals start facing steep mountain. They need to reach at least second position on primaries to have a potential win, which means reducing the vote of their Liberal opponent to under 45% and polling about 30% themselves. The lower the Liberal vote and the higher their own, the better the chance.

Sources with an overview of their campaigns suggest several teals are in this position or on the cusp. The question is whether they will hold their ground or see their support slip in the final weeks, as “soft Liberal” and undecided voters firm up their thinking.

Although we don’t know how the teal story will end, we do know that it is frightening the hell out of the Liberals in the firing line.

Nowhere is the ground war more intense and, on the Liberal side, desperate, than in Treasurer Josh Frydenberg’s electorate of Kooyong, where money and signage apparently have no limits for incumbent or challenger, because the stakes are huge. The loss of the seat once held by Robert Menzies would have immense practical and symbolic implications for the Liberal party.

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