Economic news could be a game changer for the Federal Election

News on the economy regarding housing, rents, inflation and wages could determine the outcome of the 2025 Federal Election, writes Stephen Koukoulas.

COULD THE RELEASE of data from the Australian Bureau of Statistics and the decisions from Reserve Bank Board meetings influence the timing and, indeed, the outcome of the upcoming Federal Election?

The short answer is yes.

Any shock data, one way or the other, or a further change in interest rates from the RBA between now and polling day could influence enough voters to sway the election result, which at this stage is a line-ball call.

Interest rate changes don’t always sway voters

The theory that the Albanese Government needs to implement interest rate cuts before the next election is more of a gamble than pundits think.

The recent Freshwater Strategy poll asked the question:

‘Has the cut in rates [on 18 February] made it more likely you will vote for the Albanese Government?’

A sizable 24% of respondents answered “yes” with a further 7% “unsure”. There are few details on the voting intentions of those 24% and 7% prior to the interest rate decision. But if just one in 20 of “yes” respondents were previously Coalition voters before the rate cut, this would amount to a 1.2 percentage aggregate point “swing” to Labor from just this one piece of economic policy news.

This is the sort of example where the news of the economy before polling day could be significant.

The data flow is something Prime Minister Anthony Albanese and Treasurer Jim Chalmers have at the front of their minds as the date of the Federal Election gets nearer.

The most likely date for the Election is 17 May, but there is some well-founded speculation of a poll in April, with the Albanese Government looking to take advantage of the start of an interest rate cutting cycle from the RBA and signs of lower inflation and rising wages.

As is usual in elections, the economy and personal finances are set to dominate the upcoming campaign which makes each data release and decision from the RBA potential political dynamite during the campaign.

An interest rate cut, a shock unemployment result, news on inflation and even wages could all create the narrative that both sides of politics will – rightly – exploit to their advantage.

Government should stop letting Reserve Bank govern Australia

Prime Minister Albanese needs to take back control of interest rates and stop letting the Reserve Bank dictate how to run the economy.

Technical note: the election must be held on a Saturday and 33 days' notice is needed from the date of calling the election to polling day.

With that background, here is a calendar of economic news that could be important in swaying voters one way or the other — details are from the ABS and RBA:

3 March: House prices.
4 March: Retail trade.
5 March: GDP / national accounts.
12 March: Industrial disputes.
20 March: Labour force; unemployment.
25 March: Budget — yet to be confirmed.
26 March: Monthly inflation.
27 March: Finance and wealth.
1 April: RBA interest rate decision; house prices; retail sales.
3 April: Job vacancies.
5 April: Possible election day.
12 April: Possible election day.
17 April: Labour force; unemployment.
22 April: Tax revenue.
30 April: Quarterly and monthly inflation.
1 May: House prices.
2 May: Retail trade.
3 May: Possible election day.
10 May: Possible election day.
14 May: Wages.
15 May: Labour force; unemployment.
17 May: Possible election day.

An election date in May would appear to suit the Government best.

Interest rate cuts around the world — Australia should join the gang

There’s a flight of fancy with some Australian economists and commentators that the Reserve Bank of Australia (RBA) must hike interest rates in the months ahead.

There is a solid probability that the RBA will have delivered another 25 basis point interest rate cut on 1 April which would be followed, no doubt, by plenty of speculation of further cuts after the Election.

Any available Saturday in May for polling day would be impacted by the March quarter inflation data (out 30 April) which is expected to be another low result. The economists at Westpac are, for example, expecting annual inflation to drop to 2% and for the trimmed mean inflation rate to drop to 2.7%.

If realised, this news on inflation would be great for the Government not just because of a high probability of further interest rate cuts, but because of clear campaigning that could point out that “our policies have worked” and cost of living pressures are rapidly fading with the return of low inflation.

If the Government is in any way worried that the slower economy will feed into a dip in wage growth and employment, in data released on 14 and 15 May respectively, it may opt for a 10 May election. It may conclude that the news will be good and give it that final boost as polling day looms. Either way, it is a bit of a gamble.

But even with a blip of weaker labour market data, wage growth will still almost certainly be above the inflation rate (real wages still rising), the unemployment rate will still be low (4.3 or 4.4% at worst) and the Government will still point to more than a record 1 million jobs created under its watch.

Weak data would add to the case for further interest rate cuts after the Election.

Economic news from overseas and market trends – will the ASX hit a new record high? – could also influence a few voters. News on Trump tariffs and how each side responds to whatever the U.S. Administration might do is potentially influential.

Elections are always influenced by economic news and this one will be no different. Voters are already passing some sort of judgement based on housing, rents, inflation and wages.

In addition to the policy rollout from the major parties as the campaign hots up, economic news between now and election day just might be enough to sway voters one way or the other.

Stephen Koukoulas is an IA columnist and one of Australia’s leading economic visionaries, past Chief Economist of Citibank and Senior Economic Advisor to the Prime Minister.