At first glance, Covid and fuel might seem unrelated.
But as the Albanese government’s planning for its 12 May budget is thrown into chaos by the Middle East war and the resulting international energy crisis, it’s a reminder that Australian governments are never immune to global events.
Former prime minister Scott Morrison was chugging along nicely before the Covid pandemic gripped the world in 2020, creating huge challenges in logistics and the supply of medicines that helped sink his re-election chances.
Likewise, the Albanese government, which was flying high just months ago, is now grappling with the ramifications of war in the Middle East. These include politically damaging diesel shortages in regional areas that are threatening people’s ability to go about their business, as well as alleged price gouging by oil companies.
Treasurer Jim Chalmers has conceded inflation is heading towards 5% from its current level of 3.8%. The Reserve Bank this week lifted interest rates to 4.1%, while global economic growth is expected to tumble as the war disrupts fuel supplies and destroys critical energy infrastructure in the Middle East.
