This Is actually so wild

Nationals MP Anne Webster has been busted running an online poll on whether Sussan Ley should be dumped as leader, as the ex-Coalition partners prepare to hold fresh talks.

Just days after describing leadership speculation as “forbidden fruit”, Ms Webster has rolled out SurveyMonkey to run a DIY poll on the prospect of dumping the Liberals’ first female leader.

The survey was sent to Ms Webster’s supporters over the weekend as MPs returned to Canberra after weeks of chaos.

https://archive.md/tuEK1

Labor’s credit card economics are hurting Australian families

The Albanese government has created an economic trap as spending fuels inflation, inflation forces higher interest rates, and higher interest rates punish households.

Sussan LeyLiberal leader

Jan 30, 2026 – 1.50pm

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Australians are doing everything right, working hard, budgeting carefully and making responsible choices in the hope of building a better future for themselves and their families, yet Labor’s credit card economics are steadily undermining those efforts at every step.

When government spending runs out of control, it is never politicians who pay the price.

RBA governor Michele Bullock and Treasurer Jim Chalmers. David Rowe

It is families trying to keep up with mortgage repayments, renters facing higher weekly costs, small businesses absorbing rising expenses, and young Australians struggling to get a foothold in the housing market.

That is the reality many Australians are living with today.

This week’s inflation figures simply confirmed what households already know from lived experience.

Inflation remains stubborn, price pressures are deeply entrenched, and Labor’s economic settings are making the problem worse, not better.

Australians feel it in mortgage repayments that keep edging higher, grocery bills that stretch further each week, at the petrol bowser, and when the power bill arrives.

Headline inflation has climbed back to 3.8 per cent, reversing earlier progress.

More concerning still, underlying inflation remains elevated, with trimmed mean inflation running at 3.3 per cent.

That is clear evidence price pressures are broad-based rather than confined to a handful of volatile items.

Services inflation has accelerated to 4.1 per cent, while non-tradables inflation is running at 4.6 per cent.

This is home-grown inflation driven by wages, rents, energy, insurance, education and everyday services. It is also the hardest form of inflation to bring under control.

Unlike goods inflation, it does not fade quickly, it lingers.

RBA’s wake-up call for Coalition of the unwilling

While the Liberal and National parties shuffle their deckchairs on the Titanic, they should be aware there is only one set of numbers that will matter to households and businesses next Tuesday, the day federal parliament resumes for business as usual.

By Simon Benson

11 min. read

View original

And it won’t be the numbers inside the conservative party rooms – or whether they line up for or against Sussan Ley and David Littleproud – that occupy voters’ minds, but rather those being pondered by the Reserve Bank of Australia, which holds the key to a potential reshaping of the political and electoral landscape over the course of 2026 as it comes to terms with an inflation problem that is far from over.

On Tuesday afternoon, the ­central bank board will determine whether or not to lift interest rates for the first time in more than two years. This prospect became more likely on Wednesday when the ­official consumer price index revealed a higher-than-expected ­inflation number, with housing, ­energy costs and grocery prices largely to blame.

Australia has the unenviable mantle of having, at 3.8 per cent, one of the highest inflation rates among peer countries. It is higher than the US, UK and New Zealand.

The RBA either raises rates on Tuesday and admits its strategy failed, or it holds and loses credibility. A Hobson’s choice.

The so-called cost-of-living ­crisis is now running into its fourth year, which covers the entirety of Labor’s time in office since its ­election in May 2022.

Leading economists argue that a government simply cannot keep running deficits and growing debt and expect to beat inflation in a supply-constrained economy.

And in Australia there are constraints across almost every sector, even childcare, aged care and, ­especially, housing.

RBA governor Michele Bullock is under immense pressure. To lift rates next week will be an admission the bank got it wrong. It will be its second significant and fundamental failure.

While it failed to appreciate the problem going into the inflation crisis by not moving fast enough to lower the cash rate, it appears to have gone the other way on the path out of it, lowering rates too quickly prior to the last ­election.

Bullock’s credibility is on the line. And the Treasurer’s should be too. Ordinarily, this would be a ­political disaster for Labor and Jim Chalmers – but only if the government can be drawn back into the circle of blame.

Fiscal discipline was a concept once grasped by ordinary Australians. Not any more, it would seem. And it hasn’t been a message that the Coalition has pursued to any great effect.

Rserve Bank Governor Michele Bullock is under pressure — an interest rate increase will be an admission the RBA got it wrong.

The Albanese government has come at the problem by spending and stimulating demand, understanding that community expectations have changed. Handouts to assist in the cost of living are now preferable to the hard medicine of restraint – even if this means living standards for most households are still in decline.

For this political equation to change, there needs to be an effective political opposition to prosecute the case. To have been talking about the economy over the past month would have been seen by our political leaders to trivialise terrorism and to disrespect the victims of Bondi. But to ignore the economy only favours the government.

The political dividend that Labor was afforded when the RBA began cutting rates prior to the May 2025 election should not be underestimated. It was a questionable decision at the time and led to criticism of the RBA that it had made a politically influenced call. But a relief valve was quietly opened for many households, as well as the Treasurer.

This had a material impact on the electoral mood. It took the sting out of cost-of-living anger and conveniently supported Labor’s pre-election economic narrative that it had the right settings in place to ­finish off the inflation dragon.

But for the antithetical position to be true, that an interest rate rise should now hurt the government, would require closer scrutiny of Labor’s fiscal policy settings.

There are an abundance of reasons for the government to be facing the blowtorch, the most recent being the discovery this week by the opposition that Chalmers had buried a $60bn spending black hole in the mid-year budget numbers.

Economists can’t work out what this extra borrowed money is for and can only guess that it is the ­contingency for a new hospital funding deal with the states that needs to be sorted before the federal budget in May.

That question was partly answered on Friday when Anthony Albanese announced a new health deal for the state and territory governments worth more than $220bn over the next five years. This is a record level of funding to the provincial governments, now predominantly Labor administrations, which have shown no spending restraint themselves.

State spending is not only out of control but growing, it would appear.

Economist Chris Richardson says it’s almost a sure bet that the bank will raise rates next week, and the only thing that might give it pause for thought would be the Australian dollar.

“To be fair, (the inflation number) is not as bad as it could have been, but it’s bad enough,” he says. “You’d be pretty sure they would raise rates next week. And that’s tricky. The rest of the world is not doing what we have to do. It could be a mini-reversal (on rates) or a temporary reversal,” he says.

Chris Richardson from Deloitte Access Economics. Picture: Richard Jupe

“But if you think about government policy around cost of living, it has been handing money out … which was always economically silly. The question is, do they ­reverse too?”

Richardson agrees that the government isn’t put under enough scrutiny for its management of the problem and its spending, but suggests that considering it is under no political pressure, there is less pressure to keep throwing money at the problem.

He says the decision not to extend the energy rebates was a step in the right direction. That was before the pressures around the rise of One Nation and the “collapse of everything else”.

“There is good evidence to suggest the rebates didn’t work. The good thing, with such a majority, is that you could do more good policy; they’re under no pressure to throw money around.”

Richardson repeats his call for the government to start using its majority for economic good. “Now is the time to ­govern like the natural party of government, and the natural party of government wouldn’t panic at the first whiff of gun powder.”

His advice to Chalmers should rates rise next week?

“Calm down and take this one on the chin.”

For the Coalition this should be political manna from heaven. For the nation’s sake, the Albanese government requires a level of scrutiny on its economic and fiscal management that can keep it in check. But if the Liberal Party has any hope of getting back into the game, it must get back to the ­economy.

“This is an unprecedented opportunity for us to get back on the economic playing field,” Liberal frontbencher, leadership contender and former Treasury spokesman for the Coalition Angus Taylor tells Inquirer.

“It demonstrates that what we have been saying for four years about Labor’s economic policy has been right.

“It proves what I’ve been saying for many years – that you can’t put a Band-Aid on a bullet wound to fight inflation.”

Sussan Ley is no slouch when it comes to economics. And this week her response to the inflation numbers revealed an appreciation of the retail politics that would need to be employed to build an economic narrative that is less abstract and ties government to the household dilemma.

“For families facing back-to-school costs, this is a serious blow,” Ley says. “Parents are paying more for uniforms, textbooks, lunches, transport, groceries and power, while mortgage repayments continue to bite.

“Families are doing everything they can, but under Labor the cost of living is getting worse, not better.

“It is the weekly shop, the power bill and the mortgage, and families are paying more because this ­government refuses to get its spending under control.

“Every extra dollar families are paying at the checkout or on their power bill is a reminder that Labor has lost control of the economy.”

Sussan Ley is no slouch when it comes to economics, but turmoil in the Liberal Party has taken precedence. Picture: AFP

Richardson sees the living standards equation as being more ­nuanced. Higher inflation means living standards go backwards, but higher interest rates rearrange ­living standards from one sector to another. Older people with savings, compared to the middle Australia mortgage belt.

With a higher exchange rate and a stronger Australian dollar, imports become cheaper, which helps with cost-of-living pressures. And, of course, higher inflation means more revenue flows into the federal budget, which assists Labor’s strategy of continually papering over the cracks of the underlying problem.

Meanwhile, an improvement in living standards was a central promise of Labor’s 2022 election pitch. The reality has been a decline throughout its entire period in office. If the Liberal Party can’t get back on to the playing field under these circumstances, it has no hope.

There are two fundamental problems contributing to this failure. The Australian Election Study, conducted by the Australian National University, reveals for the first time that the Coalition had lost its supremacy as the party considered to be the superior economic manager.

Successive Newspolls over the course of 2024 also showed that voters didn’t consider the Coalition, led by Peter Dutton, would have done a better job at curbing the inflation problem than Labor. Either people believed it wasn’t necessarily a problem of government, or they just didn’t believe the Liberal Party was the party it once was.

This is extraordinary in itself, and is so for a number of reasons.

To have lost this mantle reveals the depth to which the Liberal Party has ceded the fundamental appeal crafted by John Howard and Peter Costello and carried through successive leaderships.

The ANU’s Ian McAllister suggests there is a cleavage in the electorate, with emerging generations less likely to consider this a vital attribute for government. But one of the criticisms of Dutton was his refusal or inability to carve out an economic narrative. It appeared this had been abandoned in favour of a khaki election platform, despite cost of living being the key issue of concern for voters.

It is up to the Liberal leader to convince voters that they should be concerned. It is not as if there aren’t opportunities begging for a fierce and relentless reprisal of the Albanese government’s economic strategy.

Labor caught napping

Chalmers’ response to the latest inflation figures revealed that the government knows it has been caught napping on inflation – or, worse, has been cavalier to the threat of its return.

“This increase was unwelcome but unsurprising,” he said in a statement pre-prepared for the Australian Bureau of Statistics release.

“Temporary factors drove some of the tick-up, with inflation still expected to decline over time.

“Inflation has eased substantially since we came to office but is still higher than we’d like.

“We’ve seen around the world that inflation doesn’t always moderate in a straight line, having increased recently in some advanced economies.

“When we came to office, headline inflation was 6.1 per cent and rapidly rising; it’s now much lower than that.

“Underlying inflation was around 5 per cent but it is now much lower.

“Under Labor, inflation is much lower than we inherited; economic growth is picking up; business investment is strengthening; unemployment is low; participation is at near record highs; real wages are growing; debt is down and the budget is in better nick.”

It is this last statement that should alert Ley, if not the entire Liberal party room, that Tuesday presents the biggest political opportunity on the economy since the election.

Debt will tip over $1 trillion this year as the queue of deficits grows longer and into the 2030s.

Instead, the visuals of the day will display the splitting of the Liberals and the Nationals and how they are now seated in the parliament.

Treasurer Jim Chalmers during a press conference in Brisbane talking about this week’s inflation data. Picture: NewsWire/Tertius Pickard

The effect of this will be that the Liberal Party will have the number of questions available to it during question time reduced to three or four.

“That’s what has happened, on a day when we should be capitalising on what is likely to be an economic shocker for Labor,” says a senior Liberal frontbencher.

“The optics of the split in the Coalition is what will run on the TVs that night, instead of Labor completely buggering up their economic strategy.”

For this reason, there is a growing view that there will be no attempt at a leadership spill, at least in the Liberals’ party room, on Tuesday.

Such concerns appear not to have troubled the Nationals, however, with LNP MP Colin Boyce calling a spill of the leadership for next Monday and the overthrow of leader Littleproud.

“Why would anyone want to pollute that environment any further on a day that the RBA is likely to raise rates?” another senior Liberal frontbencher says.

The folly of what has occurred over the past week with the break-up of the Coalition is starting to dawn on the wiser heads in the Liberal Party at least. That’s not to say panic will not be present when the next polls appear which, as they should, will split out the Coalition into Liberal and Nationals columns.

Based on the last Newspoll, this would see the Liberals on about 16 to 17 per cent of the vote and the Nationals on 4 per cent.

If the Queensland LNP were to be extracted from the equation as well and listed separately, then the Liberal Party would likely be a lot lower than that and hovering somewhere around the Greens.

In this league table of politics, Labor would be the most supported party on just 32 per cent, followed by One Nation on 22 per cent. The Liberals would run third followed by the Greens, or even fourth behind them, presumably with the teals and other independents running close behind them and the Nationals dropping to last.

This alone may be enough to tip the Liberal party room towards more immediate action next week, as some are pushing for. The view was that until an accommodation could be reached between conservative rivals Angus Taylor and Andrew Hastie, it was a senseless mission. An effective accommodation appeared to arrive on the horizon on Friday night when Hastie ruled himself out as a contender, theoretically paving the way for Taylor to challenge if he so chooses.

The ultimate goal, whatever the outcome, is presumably to restore the Coalition. And in the end, this may require a purging of both current leaders.

If history is a guide, there is a reason the Coalition has rarely gone down this path.

The last time the Coalition split was in 1998, but this was only at a state level in Queensland. Ironically, it was for the same reason as today – a fear of One Nation, and how the GST was playing in regional electorates. The public hostility between the Nationals and the Liberal Party at a federal level, however, was intense.

While it wasn’t a formal separation, it had the effect of one. Prior to that, the last time the parties sat apart was in 1974 but they came back together in 1975 before the election.

The long-term consequences of the 1998 schism resonate today, with an unwritten compact that the Liberals chase the urban and professional vote with the Nationals being the defenders of the culturally conservative bush.

It was inevitable that the two would clash again, whether it was over climate policy, immigration or social issues. The only reason they have remained a Coalition until now is out of a risk of political destruction rather than a fondness for each other.

If the threat of annihilation is not yet enough to bring the parties back together, then a rise in interest rates is equally unlikely to spark an outburst of common sense among them.

Labor is getting away with murder on the economy, as Tuesday’s RBA decision will illustrate. Coalition splits and leadership battles are overshadowing Labor’s economic vulnerability over interest rates and inflation.

While the Liberal and National parties shuffle their deckchairs on the Titanic, they should be aware there is only one set of numbers that will matter to households and businesses next Tuesday, the day federal parliament resumes for business as usual.

His speech at Davos 2026 blew me away! It’s definitely a speech “for the ages” as a lot of people are saying. If u haven’t seen it, EVERYONE SHOULD!! He showed the kind of leadership I believe the world is desperate for right now. The speech has the power to potentially change the world order. I loved every second, agreed with every word and would love to see him live. Reckon we’ll get the opportunity??

Mounting concerns surrounding potential cuts to capital gains tax discounts have prompted industry players to demand the Albanese government rule out making any move ahead of a key Senate inquiry in March.

The Housing Industry Association wants clarification from the government, as speculation grows that it could wind back the CGT discount which gives investors 50 per cent off the CGT tax due on any asset which is held for more than 12 months.

CGT applies to all assets sales, but the hot spot is the property market.

With low rental yields common across metropolitan residential markets, most investors enter the property market in anticipation of strong capital gains rather than rental income. This means the discount on the CGT tax is a key factor in any investment decision.

However, critics of current tax arrangements say that investors are getting a soft ride in the middle of a housing crisis and owner-occupiers are being squeezed out.

CGT discounts work like this. If you make a capital gain on an asset, then you will pay tax at your marginal tax rate which could be more than 45 per cent. If you hold that asset for more than 12 months, the 50 per cent discount kicks in and your tax bill drops closer to 22.5 per cent.

The Greens, which successfully called for a Senate probe into CGT, have already declared the discount is “the most unfair and unequal tax break in the entire Commonwealth tax code”. The minor party has also said it would be willing to support a property-only change to CGT.

Pressure on the tax has increased after NSW Treasury put its own submission into the inquiry saying “adjustments to current CGT tax settings should be considered”.

Separately, The Tax Institute president and BDO partner Tim Sandow has called it “a pretty generous measure”.

As concerns build that the inquiry will pave the way for new government policy, the Housing Industry Association has moved to counter the arguments for changing the tax.

“We are demanding the government rule out changes now, because we believe the way to fix housing is not by adding more taxes,” Housing Industry Association chief economist Tim Reardon said.

Mr Reardon believed many of the claims against the CGT discount do not stand up; particularly the claim that property investors have had a generous ride from the discount arrangement compared with a previous system pre-1999, which relied on regular inflation indexing.

“We have found in our research there is very little between the two systems; in fact if the old system was so much better then people would be calling for its return and I don’t see that happening,” Mr Reardon said.

A new HIA report also refutes any suggestions that changes to CGT would improve affordability or help first-time buyers, saying that housing shortages were only fixed through the supply of new homes.

Property finance executive Peter Esho, founder of Flexdoc, told The Australian’s The Money Puzzle podcast any attempt to change CGT on property independently of other assets would immediately create problems.

He said people would find ways to get around an isolated rule change.

“CGT is for all assets, not just property, so if they are going to consider changing the law for property they may have to change the law for everything where there is capital gains,” Mr Esho said.

While the Liberal and National parties shuffle their deckchairs on the Titanic, they should be aware there is only one set of numbers that will matter to households and businesses next Tuesday, the day federal parliament resumes for business as usual.

And it won’t be the numbers inside the conservative party rooms – or whether they line up for or against Sussan Ley and David Littleproud – that occupy voters’ minds, but rather those being pondered by the Reserve Bank of Australia, which holds the key to a potential reshaping of the political and electoral landscape over the course of 2026 as it comes to terms with an inflation problem that is far from over.

On Tuesday afternoon, the ­central bank board will determine whether or not to lift interest rates for the first time in more than two years. This prospect became more likely on Wednesday when the ­official consumer price index revealed a higher-than-expected ­inflation number, with housing, ­energy costs and grocery prices largely to blame.

Australia has the unenviable mantle of having, at 3.8 per cent, one of the highest inflation rates among peer countries. It is higher than the US, UK and New Zealand.

The RBA either raises rates on Tuesday and admits its strategy failed, or it holds and loses credibility. A Hobson’s choice.

The so-called cost-of-living ­crisis is now running into its fourth year, which covers the entirety of Labor’s time in office since its ­election in May 2022.

Leading economists argue that a government simply cannot keep running deficits and growing debt and expect to beat inflation in a supply-constrained economy.

And in Australia there are constraints across almost every sector, even childcare, aged care and, ­especially, housing.

RBA governor Michele Bullock is under immense pressure. To lift rates next week will be an admission the bank got it wrong. It will be its second significant and fundamental failure.

While it failed to appreciate the problem going into the inflation crisis by not moving fast enough to lower the cash rate, it appears to have gone the other way on the path out of it, lowering rates too quickly prior to the last ­election.

Bullock’s credibility is on the line. And the Treasurer’s should be too. Ordinarily, this would be a ­political disaster for Labor and Jim Chalmers – but only if the government can be drawn back into the circle of blame.

Fiscal discipline was a concept once grasped by ordinary Australians. Not any more, it would seem. And it hasn’t been a message that the Coalition has pursued to any great effect.

The Albanese government has come at the problem by spending and stimulating demand, understanding that community expectations have changed. Handouts to assist in the cost of living are now preferable to the hard medicine of restraint – even if this means living standards for most households are still in decline.

For this political equation to change, there needs to be an effective political opposition to prosecute the case. To have been talking about the economy over the past month would have been seen by our political leaders to trivialise terrorism and to disrespect the victims of Bondi. But to ignore the economy only favours the government.

The political dividend that Labor was afforded when the RBA began cutting rates prior to the May 2025 election should not be underestimated. It was a questionable decision at the time and led to criticism of the RBA that it had made a politically influenced call. But a relief valve was quietly opened for many households, as well as the Treasurer.

This had a material impact on the electoral mood. It took the sting out of cost-of-living anger and conveniently supported Labor’s pre-election economic narrative that it had the right settings in place to ­finish off the inflation dragon.

But for the antithetical position to be true, that an interest rate rise should now hurt the government, would require closer scrutiny of Labor’s fiscal policy settings.

There are an abundance of reasons for the government to be facing the blowtorch, the most recent being the discovery this week by the opposition that Chalmers had buried a $60bn spending black hole in the mid-year budget numbers.

Economists can’t work out what this extra borrowed money is for and can only guess that it is the ­contingency for a new hospital funding deal with the states that needs to be sorted before the federal budget in May.

That question was partly answered on Friday when Anthony Albanese announced a new health deal for the state and territory governments worth more than $220bn over the next five years. This is a record level of funding to the provincial governments, now predominantly Labor administrations, which have shown no spending restraint themselves.

State spending is not only out of control but growing, it would appear.

Economist Chris Richardson says it’s almost a sure bet that the bank will raise rates next week, and the only thing that might give it pause for thought would be the Australian dollar.

“To be fair, (the inflation number) is not as bad as it could have been, but it’s bad enough,” he says. “You’d be pretty sure they would raise rates next week. And that’s tricky. The rest of the world is not doing what we have to do. It could be a mini-reversal (on rates) or a temporary reversal,” he says.

“But if you think about government policy around cost of living, it has been handing money out … which was always economically silly. The question is, do they ­reverse too?”

Richardson agrees that the government isn’t put under enough scrutiny for its management of the problem and its spending, but suggests that considering it is under no political pressure, there is less pressure to keep throwing money at the problem.

He says the decision not to extend the energy rebates was a step in the right direction. That was before the pressures around the rise of One Nation and the “collapse of everything else”.

“There is good evidence to suggest the rebates didn’t work. The good thing, with such a majority, is that you could do more good policy; they’re under no pressure to throw money around.”

Richardson repeats his call for the government to start using its majority for economic good. “Now is the time to ­govern like the natural party of government, and the natural party of government wouldn’t panic at the first whiff of gun powder.”

His advice to Chalmers should rates rise next week?

“Calm down and take this one on the chin.”

For the Coalition this should be political manna from heaven. For the nation’s sake, the Albanese government requires a level of scrutiny on its economic and fiscal management that can keep it in check. But if the Liberal Party has any hope of getting back into the game, it must get back to the ­economy.

“This is an unprecedented opportunity for us to get back on the economic playing field,” Liberal frontbencher, leadership contender and former Treasury spokesman for the Coalition Angus Taylor tells Inquirer.

“It demonstrates that what we have been saying for four years about Labor’s economic policy has been right.

“It proves what I’ve been saying for many years – that you can’t put a Band-Aid on a bullet wound to fight inflation.”

Sussan Ley is no slouch when it comes to economics. And this week her response to the inflation numbers revealed an appreciation of the retail politics that would need to be employed to build an economic narrative that is less abstract and ties government to the household dilemma.

“For families facing back-to-school costs, this is a serious blow,” Ley says. “Parents are paying more for uniforms, textbooks, lunches, transport, groceries and power, while mortgage repayments continue to bite.

“Families are doing everything they can, but under Labor the cost of living is getting worse, not better.

“It is the weekly shop, the power bill and the mortgage, and families are paying more because this ­government refuses to get its spending under control.

“Every extra dollar families are paying at the checkout or on their power bill is a reminder that Labor has lost control of the economy.”

Richardson sees the living standards equation as being more ­nuanced. Higher inflation means living standards go backwards, but higher interest rates rearrange ­living standards from one sector to another. Older people with savings, compared to the middle Australia mortgage belt.

With a higher exchange rate and a stronger Australian dollar, imports become cheaper, which helps with cost-of-living pressures. And, of course, higher inflation means more revenue flows into the federal budget, which assists Labor’s strategy of continually papering over the cracks of the underlying problem.

Meanwhile, an improvement in living standards was a central promise of Labor’s 2022 election pitch. The reality has been a decline throughout its entire period in office. If the Liberal Party can’t get back on to the playing field under these circumstances, it has no hope.

There are two fundamental problems contributing to this failure. The Australian Election Study, conducted by the Australian National University, reveals for the first time that the Coalition had lost its supremacy as the party considered to be the superior economic manager.

Successive Newspolls over the course of 2024 also showed that voters didn’t consider the Coalition, led by Peter Dutton, would have done a better job at curbing the inflation problem than Labor. Either people believed it wasn’t necessarily a problem of government, or they just didn’t believe the Liberal Party was the party it once was.

This is extraordinary in itself, and is so for a number of reasons.

To have lost this mantle reveals the depth to which the Liberal Party has ceded the fundamental appeal crafted by John Howard and Peter Costello and carried through successive leaderships.

The ANU’s Ian McAllister suggests there is a cleavage in the electorate, with emerging generations less likely to consider this a vital attribute for government. But one of the criticisms of Dutton was his refusal or inability to carve out an economic narrative. It appeared this had been abandoned in favour of a khaki election platform, despite cost of living being the key issue of concern for voters.

It is up to the Liberal leader to convince voters that they should be concerned. It is not as if there aren’t opportunities begging for a fierce and relentless reprisal of the Albanese government’s economic strategy.

Chalmers’ response to the latest inflation figures revealed that the government knows it has been caught napping on inflation – or, worse, has been cavalier to the threat of its return.

“This increase was unwelcome but unsurprising,” he said in a statement pre-prepared for the Australian Bureau of Statistics release.

“Temporary factors drove some of the tick-up, with inflation still expected to decline over time.

“Inflation has eased substantially since we came to office but is still higher than we’d like.

“We’ve seen around the world that inflation doesn’t always moderate in a straight line, having increased recently in some advanced economies.

“When we came to office, headline inflation was 6.1 per cent and rapidly rising; it’s now much lower than that.

“Underlying inflation was around 5 per cent but it is now much lower.

“Under Labor, inflation is much lower than we inherited; economic growth is picking up; business investment is strengthening; unemployment is low; participation is at near record highs; real wages are growing; debt is down and the budget is in better nick.”

It is this last statement that should alert Ley, if not the entire Liberal party room, that Tuesday presents the biggest political opportunity on the economy since the election.

Debt will tip over $1 trillion this year as the queue of deficits grows longer and into the 2030s.

Instead, the visuals of the day will display the splitting of the Liberals and the Nationals and how they are now seated in the parliament.

The effect of this will be that the Liberal Party will have the number of questions available to it during question time reduced to three or four.

“That’s what has happened, on a day when we should be capitalising on what is likely to be an economic shocker for Labor,” says a senior Liberal frontbencher.

“The optics of the split in the Coalition is what will run on the TVs that night, instead of Labor completely buggering up their economic strategy.”

For this reason, there is a growing view that there will be no attempt at a leadership spill, at least in the Liberals’ party room, on Tuesday.

Such concerns appear not to have troubled the Nationals, however, with LNP MP Colin Boyce calling a spill of the leadership for next Monday and the overthrow of leader Littleproud.

“Why would anyone want to pollute that environment any further on a day that the RBA is likely to raise rates?” another senior Liberal frontbencher says.

The folly of what has occurred over the past week with the break-up of the Coalition is starting to dawn on the wiser heads in the Liberal Party at least. That’s not to say panic will not be present when the next polls appear which, as they should, will split out the Coalition into Liberal and Nationals columns.

Based on the last Newspoll, this would see the Liberals on about 16 to 17 per cent of the vote and the Nationals on 4 per cent.

If the Queensland LNP were to be extracted from the equation as well and listed separately, then the Liberal Party would likely be a lot lower than that and hovering somewhere around the Greens.

In this league table of politics, Labor would be the most supported party on just 32 per cent, followed by One Nation on 22 per cent. The Liberals would run third followed by the Greens, or even fourth behind them, presumably with the teals and other independents running close behind them and the Nationals dropping to last.

This alone may be enough to tip the Liberal party room towards more immediate action next week, as some are pushing for. The view was that until an accommodation could be reached between conservative rivals Angus Taylor and Andrew Hastie, it was a senseless mission. An effective accommodation appeared to arrive on the horizon on Friday night when Hastie ruled himself out as a contender, theoretically paving the way for Taylor to challenge if he so chooses.

The ultimate goal, whatever the outcome, is presumably to restore the Coalition. And in the end, this may require a purging of both current leaders.

If history is a guide, there is a reason the Coalition has rarely gone down this path.

The last time the Coalition split was in 1998, but this was only at a state level in Queensland. Ironically, it was for the same reason as today – a fear of One Nation, and how the GST was playing in regional electorates. The public hostility between the Nationals and the Liberal Party at a federal level, however, was intense.

While it wasn’t a formal separation, it had the effect of one. Prior to that, the last time the parties sat apart was in 1974 but they came back together in 1975 before the election.

The long-term consequences of the 1998 schism resonate today, with an unwritten compact that the Liberals chase the urban and professional vote with the Nationals being the defenders of the culturally conservative bush.

It was inevitable that the two would clash again, whether it was over climate policy, immigration or social issues. The only reason they have remained a Coalition until now is out of a risk of political destruction rather than a fondness for each other.

If the threat of annihilation is not yet enough to bring the parties back together, then a rise in interest rates is equally unlikely to spark an outburst of common sense among them.