Labor’s majority is suddenly in play as rate rise anger and One Nation surge

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ESSENTIALS

— Labor’s majority is back in doubt: new modeling puts it on 71 seats, with One Nation projected to win 34.

— Katy Gallagher is hunting for $9.3 billion in savings, putting public-sector AI under scrutiny.

— We might be headed for Australia’s version of Citizens United, causing an election spending free-for-all

DRIVING THE DAY

It’s all about the control of the economic narrative today.

ACTU INTEREST RATE PROTEST

The theme at this morning’s protest outside Reserve Bank HQ is “Workers Can’t Afford Another Rate Rise,” ahead of Tuesday’s rate decision.

Can anyone remember a major protest against the Reserve Bank — let alone one organized by another major Australian institution?

The takeaway: Combined with the PM’s oblique criticism of the 17 rate rises during his prime ministership as a “blunt instrument,” it’s clear the RBA has been politicized.

PM’S AT CHOGM … AND NO ONE CARES

Let’s be real, CHOGM is not structured to be an important forum — and the Brits flubbed the chance to refocus it as an investment forum. This year the only big dog, India’s Prime Minister Narendra Modi, is absent.

What doesn’t matter: Albo’s decision to attend. What was he going to do? Snub King Charles and miss meeting 50 national leaders, because of a probable interest rate rise?

What does matter: Middle power coordination with U.K.’s Andy Burnham and Canada’s Mark Carney ahead of G-20, and as U.S. midterms results roll in.

Other government priorities: No embarrassing tropical island images; making Australia’s case for a UN Security Council seat (CHOGM’s 56 countries are 30% of UN membership).

THE LABOR MEMBERS OF PARLIAMENT WHO’D LOSE THEIR SEATS IF AN ELECTION WAS TODAY

New 2028 federal election modeling from TheSwingIsOn, Playbook’s favorite new polling site, indicates that for the first time since the 2025 election, Labor is not on track to win a majority of seats.

Throughout One Nation’s 2026 rise and Labor’s primary vote slumping into the 20s, the government could cling to the knowledge that it was still on course for another majority. No longer.

The most likely outcome now is 71 seats for Labor, 34 for One Nation, 32 for the Coalition, 13 for independents and Greens.

The latest Newspoll puts One Nation on 28% primary vote, Labor on 27%, Coalition on 21% and Greens 13%. Jim Chalmers had a net approval rating of minus 16.

LABOR MEMBERS MOST LIKELY TO LOSE THEIR SEAT IN THIS MODEL

David Smith, Trish Cook, Josh Wilson, Gabriel Ng, Emma Comer, Luke Gosling, Lisa Chesters, Peter Khalil, Rowan Holzberger. Zhi Soon, Matt Gregg, Tom French, Sarah Witty, David Moncrieff, Mary Doyle, Rob Mitchell, Kara Cook, Basem Abdo, Fiona Phillips, Carina Garland, Shayne Neumann, Ali France, Matt Smith, Carol Berry. Tracey Roberts.

Major asterisk: Because of the number of three-way and four-way contests that are likely to occur at the next election, it’s much harder to use 2025’s two-party preferred results to assess which MPs would fall short in the new, more complicated contests.

CABINET IS SAFE, FOR NOW: Every lower house member of Cabinet sits on a margin of 10% or greater — a feat not achieved since Malcolm Fraser’s 1975 Cabinet.

CANBERRA’S NEW PARLOR GAME: WHAT’S YOUR GO-TO BUDGET CUT?

Everyone’s wondering where Gallagher is going to find $9.3 billion by December, to offer up to the mid-year budget update like a Christmas ham.

WHY $9.3 BILLION? While Gallagher refused to commit on “Insiders,” that’s what it would take for the budget deficit to start shrinking, rather than keep growing year-on-year. It’s an arbitrary threshold, but an important psychological one for the government to meet to demonstrate it does take budget discipline seriously.

DOGE BY ANY OTHER NAME: Elon Musk’s short-lived Department of Government Efficiency has a terrible reputation in Australian politics, but it existed for both techno-ideological reasons and also the same set of complaints Gallagher made on “Insiders,” Sunday, about the growing list of cost pressures finance ministers are juggling.

The task, then, for any Australian government is how to surgically find the efficiencies, without taking a wrecking ball to public services and stability.

LET THEM EAT CUTS! With the government passing on a gas export tax — in favor of a domestic gas reservation policy — there aren’t any new taxes coming. So there will need to be cuts to existing incentives or spending.

A couple of obvious candidates are the home battery scheme (running at more than double its expected cost, racking up roughly $4 billion last financial year) and Electric Car Discount fringe benefits tax exemption ($1.35 billion). Ron Mizen reports that dozens of federal government departments failed to rein in staff costs last financial year, which also makes for a juicy target.

WHY ‘WOE IS US’ IS A BAD STRATEGY: Even if today’s ministers do have a tougher operating environment than their recent predecessors, as they’re now in the habit of claiming, the relevance is limited, because:

1. We are not fighting a major war, and that’s a yardstick for credible complaints
2. Today’s ministers have hundreds of billions more to spend than their predecessors

Here’s what other governments since 1983 had available to spend in their fourth year (in 2026 dollars).

WHERE IS THE AI DIVIDEND FOR GOVERNMENT?

Playbook’s questions:

1. Since the government believes AI can transform productivity across the Australian economy, why isn’t it setting itself the same productivity challenge?

1. With more than 100 chief AI officers across the government: Shouldn’t they collectively create a budget savings plan that we can all read?

WHAT SHOULD BE LANDING ON KATY GALLAGHER’S DESK

— Lists of major processes suitable for AI automation (more on the problematic aged care algorithm here)

— Plans and results for how AI is used to reduce tax fraud and error.

— Plans for preventing consultants from passing off their AI-enabled work at the same cost as their human-only work.

— Plans for mapping AI into the reworking of jobs as staff attrition occurs (more below on the deadlock between unions and ministers).

We need differently-skilled public servants now, and probably fewer of them. In the U.S. private sector — where the clearest AI productivity gains have been demonstrated — this typically leads to a reduction in junior staff recruiting.

MANAGING THE POLITICS

Chalmers and Gallagher need to cover both flanks. To the left, some reinvestment of productivity gains in frontline services will be needed, and the CPSU will need an acceptable retraining offer for public servants and proof public servants will have bottom-up input into how AI is used in their workplaces.

Managing the center and right will be harder given how much trust has evaporated. Net savings are needed to stop the bleeding, and something like a public sector productivity scorecard.

GLOBAL EXAMPLES

The most advanced governments are building common AI infrastructure that can be shared across agencies.

Singapore: GovTech runs common digital services and a shared AI platform.

Estonia: X-tee data-exchange lets agencies securely reuse data, its universal digital signature infrastructure has saved it 2% of GDP, and its “Bürokratt” system is a network of government chat assistants that work with human staff to handle citizen queries (it will soon complete transactions on behalf of citizens).

South Korea: Seoul wants 95% adoption of common infrastructure across the public sector by 2030.

MIDTERM MADNESS

‘IT COULD BE QUITE A BRUTAL EVENING': Democrats have had their hopes crushed before. But once safe seats and states are now contestable, reports Meredith Lee Hill.

Republicans have watched with horror as their Ohio governor nominee Vivek Ramaswamy’s “numbers have gone off a cliff” after he ran an ad featuring Democrat Amy Acton’s estranged mother saying her daughter is a liar, according to three Republican strategists who have seen the polling. Acton’s stepfather was charged with raping her when she was 12.

17 POLITICO reporters reveal their pick for the most important race, and why.

POLL: AMERICANS DON’T TRUST POLLS ... If you’ve noticed less emphasis on precise polling numbers in this U.S. election cycle, it’s because most Americans don’t believe the numbers.

Any Republican wipeout may push the Republicans closer to Trump, not farther away. If Republicans lose both the House and Senate this week, 54% of MAGA-identifying voters say it would show that the party needs to move closer to Trump and his agenda, per the latest POLITICO Poll.

TOTAL MIDTERMS AD SPEND: US$11.2 billion per tracking service AdImpact. $801 million of that went to TV ads on cost-of-living themes.

Affordability issues have topped virtually every opinion poll all year as the issue Americans care about most, and Democratic poll leads have gone up over the last three months, tracking the surge in U.S. gas prices over the northern summer.

WORD OF ELECTION NIGHT — HISPANIC

Trump won 55% of Hispanic men in 2024 — considered a revolutionary number — but it won’t be repeated Tuesday night.

Read POLITICO’s profile of Maria Elvira Salazar, the Republican Florida member of Congress who made immigration her signature issue, and who told us the White House has messed this up.

Texas early numbers: As of Sunday 642,000 Texans had early voted who did not vote at all in the 2024 Presidential election, and virtually half were Hispanic (310,997). Four in ten of them were under 30, and two-thirds of that group were women.

BY THE NUMBERS

HIGH TRUST IN AUSTRALIAN PUBLIC SERVICE

Trust remained at a record high 62 per cent in 2025-26 according to latest data from the Trust in Australian Public Services: 2026 Annual Report.

Most trusted services include Smartraveller (89%), Pharmaceutical Benefits Scheme (83%), Australian Passport Office (82%) and My Health Record (81%)

STATE OF THE NATION

APS — GOVERNMENT AND UNIONS DEADLOCKED OVER AI IN PUBLIC SECTOR

The CPSU, the biggest federal public servant union, is insisting on worker protections during AI rollouts, as One Nation deputy leader Barnaby Joyce suggested retiring bureaucrats be replaced with AI tools to drive productivity.

Read Miriam Webber’s story.

The Community and Public Sector Union is deadlocked in talks with the Public Service Commission: Any agreement will lock in an AI status quo for three years for the 196,000 workers. Given the pace of development in AI technologies, and pressure on government to rein in public spending, there’s a lot riding on the talks.

“When I used to go to delegate meetings two years ago, AI might have been mentioned. Now AI and the need for strong workplace protections is mentioned at every single delegate’s meeting,” CPSU national secretary Rebecca Fawcett told a parliamentary inquiry Oct. 30.

“If workers are not brought along and workers don’t have strong protections, then we really do risk that trust of the workforce and we risk the trust of the public,” she said.

Successive governments have faced condemnation for the use of automated decision-making in public services — most notably through the robodebt royal commission which condemned the “crude and cruel” scheme run out of Services Australia, and most recently via a Commonwealth Ombudsman report into the flawed use of an algorithm to determine levels of home care support for older Australians.

The CPSU is asking for a suite of enshrined rights, including commitments to not use AI for surveillance or performance management, to train and reskill displaced public servants and to guarantee human involvement in decision-making processes.

To date, the government has only offered to establish rights for training on the ethical and safe use of AI, as well as a requirement for management higher-ups to consider the impacts of the technology on employment matters.

Quotable: One Nation MP Barnaby Joyce told POLITICO in October that retiring public servants could be replaced by AI in order to drive productivity. “Try to fill in a lot of those jobs with something that is cheaper and works 24/7,” Joyce said, otherwise “you’re going to go broke.”

Former NSW digital government minister Victor Dominello: “there’s no doubt there will be jobs displaced, but there will be jobs created.”

HIGH COURT — CAMPAIGN FINANCE LAWS FACE THEIR ‘CITIZENS UNITED’ MOMENT

It’s easy to want big money out of politics, and harder to deliver a system that does that fairly. Former independent parliamentarians Zoe Daniel and Rex Patrick took a challenge to the $800,00-per-seat donations cap in the High Court, claiming a breach of the freedom of political communication implied in the Australian Constitution.

Daniel and Patrick told POLITICO in a joint statement that “Labor claims these laws get big money out of politics,” but that other parts of the law, including an increase in public funding per vote received by each party, are a “massive taxpayer-funded windfall” that “far outstrips the money they are likely to lose in donations.”

Independents are also concerned that a $90 million national spending cap allows political parties to disguise higher seat-by-seat spending. An average 17 seats change hands each election, and usually only about 30 are considered flippable: $90 million into 30 seats is … a lot more than $800,000 per seat.

The Commonwealth defense is playing hardball in its court filings, but if they lose and spending and donation caps are invalid, this could be an Australian version of the 2010 Citizens United U.S. Supreme Court case, which upended former campaign finance limits by stating that unlimited spending is protected as free speech.

Some worry we’ll see more examples like mining billionaire Gina Rinehart gifting a plane to One Nation or buying an AU$8 million inner-city Brisbane office building for the party.

Paul Ferris (GetUp) said current loopholes “let the major parties spend millions while capping the spending of other actors.” Matthew Sheahan (Advance) said the laws “restrict political communication” and constitute “a protection racket for the major parties.”

Read the full report from Paul Karp.

PARTY ROOM

IS ONE NATION LOSING STEAM IN VICTORIA? Opposition leader Jess Wilson now dares to mention the party, and the Greens are circulating internal polling putting them ahead of One Nation (third party polls have them behind 22 to 14, but ahead on seats).

LABOR UNMOVED AS ONE NATION DIGS IN FOR FIGHT OVER STAFFING: Labor’s thinking is that when Albo offers you an extra staffer, you should take it. One Nation didn’t — and that choice will now be flung in its face for the remainder of this staffing stoush.

Albo’s thinking around Fatima Payman: You rat on Labor, then you fly across the country to campaign against me in my own electorate … you don’t get an extra staffer, either.

THE PLAYBOOK INTERVIEW

SHOULD AUSTRALIA KEEP THE KING?

The constitutional monarchy vs. republic is a live question on the ‘Canberra Playbook Podcast’ today, as the Prime Minister meets Commonwealth leaders in Antigua and Barbuda, and King Charles called him to urge him to attend.

But while Anthony Albanese is on a tropical island, rate rises loom and Jim Chalmers could be left to pick up the pieces.

CANBERRA MEETS WORLD

ALBO’S CHOGM VIBE — THANK HEAVENS I’M NOT BURNHAM

The summit threatens a reckoning with Britain’s imperial past — but Brexit Britain’s parlous finances don’t give room for the slavery reparations that will be demanded from some of its former colonies. POLITICO spoke to more than a dozen British officials about the acute anxiety in Westminster.

After ex-prime minister Keir Starmer left the last CHOGM summit furious over the situation, King Charles III and Andy Burnham will tread a delicate line this week in Antigua.

Who are the slavery reparations players? Barbados PM Mia Mottley announced a manifesto from Caribbean leaders on the “moral, ethical and legal case” for reparations in June. Commonwealth Secretary-General Shirley Botchwey said an apology for Britain’s role in the slave trade “wouldn’t hurt.” Irish telecoms billionaire Denis O’Brien is funding the Repair Campaign, calling for financial reparations to the Caribbean.

Who’s missing? India’s Prime Minister Narendra Modi.

What are they trying to avoid from 2024? The Downing Street team flew to Samoa in 2024 insisting reparations were “not on the agenda.” This message “went down like a bag of sick” with Caribbean nations who saw it as “colonial” and “arrogant,” said one person involved in the conversations.

The British strategy: Limit journalists to a pool format; don’t talk about reparations in public; lean into climate resilience funding; play forward to debt relief from the G-20.

Read the full report from POLITICO’s Dan Bloom.

POLITICO’S MARK CARNEY INTERVIEW

MARK CARNEY DOESN’T CARE WHAT YOU THINK: And he doesn’t care what President Donald Trump thinks either. That’s the takeaway from POLITICO’s sit down interview with the Canadian PM. “We’re not adjusting for what the U.S. might think, what China might think, certainly what Russia might think,” he said. “It’s far better just to be absolutely clear what we’re doing,” he said of his approach to Washington.

How Europe and Canada are diversifying away from the world’s superpowers.

PENNY WONG ON STRIKE AGAINST RUSSIA AT G20: U.S. hosts were forced to cancel the traditional “family photo” of foreign ministers at the G20 in Atlanta after diplomats including Wong refused to appear alongside Russia’s Sergey Lavrov.

AGENDA ASSISTANT

The select committee on women’s health is holding a public hearing in Sydney, with witnesses from Western Sydney University appearing.

The Insurance Council of Australia and Telecommunications Industry Ombudsman will appear before an inquiry into cyber security for small and medium businesses.

Pauline Hanson will speak at an event in Melbourne this evening with Victorian One Nation leader Warren Pickering.

REQUIRED READING

PATERSON’S ASCENSION: The AFR’s Sumeyya Ilanbey and Myriam Robin have this compelling long-read on James Paterson’s rise through the ranks of the Liberal party, from a 28-year-old Senator to someone who’s spoken of as an elder statesman of the party (at just 38).

Paterson and his wife Lydia are key confidantes to Victorian Opposition Leader Jess Wilson.

Quotable: “The federal Coalition has never won an election from opposition without first winning an election in Victoria,” Paterson told the AFR. “Obviously, it’s not sufficient on its own … but it has been a precondition for us winning federally.”

LOCAL CANBERRA

MEA CULPA — In Friday’s Playbook, we shared an incorrect figure for public subsidy from ARENA to a series of NOX energy EV charging points. The $1.5 million grant covered 1,956 sockets, rather than the 254 sockets being launched at The Griffin apartments, Friday. Therefore the grant provided a $772 subsidy per planned socket.

IF CANBERRA SUBURBS WERE PEOPLE: Briony Winchester is racking up a lot of LOL stories for Region Canberra. Does she nail you and your neighborhood?

NCA TAKES A PARKING FEE HIT: Revenue raised by parking fees in the parliamentary triangle fell by $781,000 in the 2025 to 2026 financial year, according to the National Capital Authority annual report.

The drop could be a symptom of the nightmare that is getting across Commonwealth Avenue bridge at the moment, as Canberrans turn to bikes or walking to bypass the traffic. Fortunately for us, revenue raised by parking fines was also down by $219,000.

COMMUNITY CORNER

MOVES AND APPOINTMENTS

Moksha Watts is now a board member at the Australian Council on AI Strategy.

BIRTHDAYS

Former South Australian Labor MP and minister Susan Lenehan, actor David Schwimmer.