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From Schwartz Media and 7am, I’m Ruby Jones and this is The Vote.

Today, Anthony Albanese is set to end his isolation and return to the campaign trail after he tested positive for Covid-19 last week.

Archival Tape -- Scott Morrison:

“Well, I'm looking forward to him rejoining the campaign. He's had a pretty quiet week. I remember when I was a nice guy, I had a very busy week…”

As he returns to campaigning in-person, the cost of living has become an even more pressing election issue.

New inflation figures show prices are 5.1 per cent higher today than they were this time last year – which could mean interest rates are raised in the middle of an election campaign.

Archival Tape -- Jim Chalmers (Shadow Treasurer):

“This is Scott Morrison's triple whammy of skyrocketing cost of living, rising interest rates and falling real wages.”

And in the midst of this China has signed a deal with the Solomon islands, which could see a Chinese base built in the South-Pacific.

Archival Tape -- Scott Morrison:

“I sent in the AFP. The Labor Party wants to send in the ABC when it comes to their Pacific Solution.”

Today, to analyse all the latest events, we’re joined by:

Chief Political Correspondent for The Saturday Paper, Karen Middleton

Election Analyst from The Tally Room, Ben Raue

And Columnist for The Saturday Paper, Paul Bongiorno.

It’s Friday, April 29.

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RUBY:

Hi everyone and thank you so much for joining me today. It's been a big week, so let's get straight into it. Karen, my first question is for you. Right now it seems like this election is anyone’s to win or to lose - is that how it looks to you in Canberra? What are you hearing from both campaigns about where they think they're positioned at this kind of midway point?

KAREN:

Yes, absolutely. That is what they're saying. They're saying it is as tight as and it can still go either way. And then, of course, there's this wildcard factor of the independents in those so-called teal seats. I do think things are really unsure partly too because of the large size of the undecided vote being tied up to 25%, you know, people haven't made up their minds yet. We've got three weeks to go and both parties in the major parties at least are absolutely desperate to just cause enough doubt about the other side, that when people go into that polling booth and hold the pencil over the paper, they mark the box in their column.

RUBY:

And talking about causing doubt. I wonder, Paul, what you think the biggest challenges are facing both Anthony Albanese and Scott Morrison at this moment in time. What are their weaknesses?

PAUL:

Well, I think it's pretty simple at this point of time. Scott Morrison has got to convince the electorate that a change to Anthony Albanese won't be a change for the better. This is the devil you know is better than the devil you don't know. I think Scott Morrison's problem is the electorate isn't all that impressed with the devil that they do know. Now, from Anthony Albanese's point of view, even though he's been told by his doctors he's got to take it easy next week, he has to get out there and say, I'm not Scott Morrison. I think that's the first thing he's got to prove. And the next thing he's got to prove is that not only am I not Scott Morrison, but I can do it better.

RUBY:

Mm. And your thoughts, Ben, on just how tight this is looking?

BEN:

Yeah. I mean, some of the pollsters still have Labor quite far out in the lead; you know, Newspoll and Ipsos 53%, 55% 2PP. If that was consistent for everyone, it would look still pretty strong for them. But that's not the universal opinion of the pollsters. You know, Essential only had Labor up by one in their two party preferred figures as well. So there's kind of a bit of more variety in the polls than we saw last time, which is encouraging in one sense. But it also means that we don't really know what's going on. I think Labour Labour definitely are in the lead, but that picture is not completely consistent.

PAUL:

Can I just jump in there? The average of all the published opinion polls this week, so the new ones and added on to the latest ones is 6.4% lead two party preferred to Labour at the same time. Three weeks out from the last election in 2019, the lead to Labour was only 3%.

BEN:

Yeah, so if you look at polls like Newspoll and Ipsos, the lead is bigger than last time. So even if there was a similar error, that does suggest Labor is still in a stronger position than they were three years ago. But not all the pollsters are saying that.

RUBY:

Okay. So. Let's move away from the polls now and go to some of the big issues of the campaign, because there's been a lot of talk about this being a cost of living election, and that does seem to be bearing out now. This week we saw inflation surged to two 5.1%. So what are the potential repercussions of that? Maybe we can start with you, Paul.

PAUL:

Well, I think the biggest repercussion is that the economy, which is supposed to be the default strength of the government of the Liberal National Party, has suddenly become a giant negative. I mean, those inflation numbers have shocked the markets 5.1%.

We are now seriously talking. In fact, if the Reserve Bank doesn't move next Tuesday to raise interest rates, it will be seen to be derelict in its duty. The governor already, according to a number of economists today, is under enormous pressure to put the inflation genie back in the bottle. Some say he's left it three or four months too late.

But as Labor's been saying today, it's all very well for the Government for example, to claim credit over low unemployment numbers while at the same time trying to point the blame everywhere else for high inflation.
The other thing to say, too, is that when you really do stack up all the economic numbers, 78 billion dollars worth of debt, a trillion down the track - the budget itself forecast wages growth of 1.75%. Well, the gap with inflation at 5.1% is enormous. So Labor's mantra that ‘everything's going up except your wages’, well…on the latest figures, wages are not going backwards, they're crashing.

RUBY:

And Karen, what are you observing about the way that the inflation rise is impacting the campaign? Surely this would be especially concerning to the Coalition, seeing as they're the ones that have been in government and in many voters' minds responsible for cost of living pressures.

KAREN:
Well, that's right. As Paul says, the Labor Party, the Opposition is able to say, well, we've been in office for nearly ten years, you're the stewards of this result, and particularly for the last couple of years. Now, people will no doubt factor in the impact of the pandemic, which had to be took a big chunk out of the economy. But the government has been trumpeting how quickly we've surged back from that.

So I think it's problematic that we've seen a higher than expected inflation rate for the government. Problematic. And Labor is now trying to position itself as able to do better. That's a challenge for Labor because it's this historical kind of reputational thing that it comes up against, that the Coalition is meant to be better at managing money, but it is going to make, you know, we make a solid argument and it's already doing that, but the people who've been in the job haven't done a good job.

RUBY:

What about actual policy, though? What are we hearing from both Labor and the Coalition about how they will actually keep the cost of living down?

KAREN:
Well, they-...Labor is, as I think Paul mentioned earlier, focussing very much on wages. So they're saying, yes, there are cost of living pressures. Some of these are external, some of these are due to government settings. But we will definitely make sure that there is support for a wage rise. And they’re making the point that wages have lagged and that government has not supported a wage rise adequately. So that's the argument they're making. On the government side - on the coalition side - they are mostly emphasising the measures they've made, particularly in the budget, to alleviate some of these pressures.

RUBY:

And we hear a lot that people traditionally trust the Coalition on economic management and the Coalition certainly thinks it's safe ground for them. But I wonder how that assumption is playing out now. Ben, do we have any information or any insight into people's confidence in the Coalition versus Labour on the economy as we get closer to the election?

BEN:

Yeah, there is that traditional perception. The polls I've seen on this topic are not particularly strong for the Coalition right now. The second last essential poll included a question asking on a number of different economic issues. Who was more trusted in about a third of people said neither on basically all of them. But Labour actually outpolled the Coalition on four of the six questions and the two where the Coalition was ahead on interest rates and debt. They weren't ahead by much. So it's a mixed picture and I don't think it's a slam dunk that it's good for the coalition. I think it depends on the framing. It depends on what kind of economic management we're talking about and even on coalition strengths like interest rates and government debt. The polling is not particularly strong for them.

RUBY:

We'll be back in a moment.

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RUBY:

Moving on. Last week, we got news of the deal that was struck between the Solomon Islands and China…

Archival Tape -- Sky News Host:

“Welcome back. Well, there are warnings for Australia on what a security deal between the Solomon Islands and Beijing could mean…”

RUBY:

It's a deal that Australia fears could open the door to two Chinese naval bases in the South Pacific. And we've heard the Foreign Minister, Marise Payne, saying that Australia is deeply disappointed at the signing of the agreement.

Archival Tape -- Marise Payne:

“We’ve been explicitly clear, and in a respectful way, of the reasons that we think it is not a constructive approach, if you like, to regional security…”

RUBY:

We've heard the Shadow Foreign Minister, Penny Wong…

Archival Tape -- Penny Wong:

“This is the worst foreign policy blunder that we've seen in the Pacific since World War Two. And despite Mr. Morrison's tough talk on his watch, our region has become less secure.”

RUBY:

Karen, you've done a lot of reporting around national security and I just wonder how significant this deal is that China has struck. And does it sound to you like Australian authorities were caught off guard?

KAREN:

I think they were caught off guard by the announcement that it was finalised. I think they knew it was coming and we've seen reports in fact that the draft agreement that was leaked not that long ago was actually the work of the Australian intelligence agencies just to sort of make sure that people were aware that this was going on. So the surprise came in the announcement that the Chinese had instigated that this had actually happened. I think the Australian Government and the American Government thought they had a little bit more time to try and dissuade the Solomons from this course. How important is it? Well, it is important strategically. Those islands in the Pacific are very important. Remember back to a certain other war that involved a battle for Guadalcanal. That shows you how significant that particular area of the Pacific is. It sits between Australia and, you know, out there in the US and it's a strategic outpost. If China was to set up a military base there, that makes it much more difficult for, you know, our major ally, the US. And it makes it more difficult for those of us in the region should China decide to have ambitions that are not friendly about the Indo-Pacific. And that is the great fear that the countries of this region have. And it will be a domestic political disappointment as well as an international security disappointment for the Australian Government that it's happened at this particular time when it's emphasising so heavily its national security credentials in the context of an election campaign, and particularly to scare about China. We now seem to be more vulnerable to China no matter who is in office.

PAUL:

Well, the bare knuckle politics of this is that the government was completely taken by surprise by how aggressive Labor was straight off the bat. In fact, Labor used what, according to a recent Morgan poll, Australia's most credible federal politician, Penny Wong, who normally plays the state's person when it comes to foreign policy. She went straight for the jugular on day one and said this was the greatest failure in Australian foreign policy since World War Two. The Government couldn't believe their ears. And then as the week unfolded, it became apparent, for example, that our Foreign Minister hadn't been anywhere near the Solomons for nearly three years.

BEN:

It's interesting to parallel that with the debate around interest rates in the economy, right? They're both areas where the coalition is seen to have traditional strengths. And right now they are trying to prosecute those strengths against Labor on both economic management and national security and potential interest rate rises. And this Solomon Islands deal both undermine that credibility and make it hard to make that argument for them.

KAREN:

I think also, Ruby, there's a potent link with another issue that is very powerful in this election campaign, and that's climate change. You know, a lot of people have said, oh, there's nothing-...climate change has nothing to do with national security. Aside from the fact that it's an existential crisis to our neighbours, which could mean that they need somewhere else to live, that is a relevant national security question. It is directly linked to national security now because one of the great complaints of all of our neighbours in the Pacific is that Australia has tended to be somewhat condescending in its relations with them and has refused to do anything substantial on the one big issue that they keep on raising, which is action on climate change. But Australia hasn't done enough on climate change and hasn't stuck up enough for its small neighbours and they have long memories I haven't forgotten and now they've looked elsewhere for help.

BEN:

I'm really interested to see what happens. There's a series of marginal seats that have really large Chinese Australian populations. And we were talking before about national security - a lot of the rhetoric around China, there's a certain assumption, I think from the Coalition about how that will come across with voters. But I'm thinking particularly of Chisholm in Melbourne, which has a 0.5% margin, has a member who is of Chinese heritage, about 20% of the population speaks a Chinese language at home, and there's a bunch of other electorates as well, the kind of middle suburbs of Sydney and Melbourne in particular, I'm thinking Bennelong and Reid and places like that as well - it could make a real difference in those electorates.

RUBY:

It will be interesting to see how that plays out Ben, And looking to the week ahead - Albanese is out of Covid-19 isolation this morning. So what should we expect on the campaign trail next?

PAUL:

I'm told by the Labour campaign that they intend on Sunday to pivot back to the construct, as it were, of their campaign, and that was very much tying everything into the cost of living, including, by the way, climate change. They probably can't believe their luck - given the run of bad luck they've had with Albanese getting sick etc - that the amazing - the shocking is the better word to use here - inflation number has helped them to prosecute their argument that everything's going up except your wages, and we've got the answer for you, or ‘an’ answer to help. You know, ‘you can count on us, we’re the cavalry’, as it were.

KAREN:

I think the big risk really for the Labor Party is another major step up by Anthony Albanese. [Paul laughing]. I mean there will be a lot of focus on him, and the fact that he made that stumble in on the very first week about figures and not only just not remembering figures, which on one level is neither here nor there, but it was the panic, the desperation which she was trying to reach for them that really threw a lot of people, including Labour people, off because it happened early. That has set a little niggling kind of is the guy up to it in some people's mind. That's what the Liberals are trying to exploit. If he puts something foot wrong again in that respect, it does anything terrible that reinforces that idea without bouncing back, without recovering better than he did the first time. That, I think, is a big danger heading into that final stretch of the campaign.

RUBY:

Mm, absolutely. Thank you all for joining me today. Much appreciated. And talk to you again soon.

KAREN:

Thanks, Ruby.

BEN:

Thank you.

PAUL:

Bye.

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RUBY:

Also in the news today,

Russian President Vladimir Putin has warned the international community that any country trying to intervene in the war in Ukraine will face quote - “ a lightning fast’ response.

Putin assured Russian lawmakers that plans were in place to counter further western intervention in Ukraine.

And in Sydney, a large-scale investigation is underway after the underworld figure Mahmoud Mak-mood Ahmad Ah-mard was shot dead in the street on Wednesday night.

Police said Ahmad was warned his life was in "imminent danger" by detectives last week, who said he was a marked man with a million dollar bounty on his head.

7am is a daily show from The Monthly and The Saturday Paper. It’s produced by Elle Marsh, Kara Jensen-Mackinnon, Anu Hasbold and Alex Gow.

Our senior producer is Ruby Schwartz and our technical producer is Atticus Bastow.

Brian Campeau mixes the show. Our editor is Scott Mitchell. Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio. And original music in this week's episodes was composed by Alex Gow.

I’m Ruby Jones, this is 7am. See you next week.