If the Albanese government wants to cheat the populist death spiral, it needs to go to the barricades with the rest of us | Peter Lewis

Midway through its second term, the Albanese government is teetering on the verge of a populist death spiral that is sweeping the globe. To avoid being sucked in will take all its political nerve and skill.

One Nation’s rapid rise has focused attention on the risks to the rapidly fracturing Coalition, but Labor is not immune from the chaos torpedoing the binary two-party contest that has underpinned Australian politics since the resolution of “the split”, which kept Labor from power until the mid-1970s.

While midterm polls are notoriously skittish, there is no sugarcoating the deteriorating view of the government. Labor’s primary vote is stuck below 30%, disapproval of the prime minister is at an historic high and broader sentiment about the direction of the nation is dire.

You don’t need a political science degree to read the room. Worsening economic conditions are not just affecting the hip pocket of many Australians. According to this week’s Guardian Essential Report, they are also impacting many people’s physical and emotional wellbeing.

The primary architect of all this pain is a populist US president in way over his head, strangling the global economy first with counter-productive tariffs and now an ill-advised war in Iran from which he appears unable to extricate himself.

We can talk about government spending, which the Reserve Bank governor has, but without the accelerant of the global oil shock, this would be business-as-usual fiscal friction between a government committed to funding services and a bunch of bankers.

Politically, the Albanese government is hamstrung in explaining its predicament on two levels.

First, as this table shows, blaming Trump will be read by the public as failing to take responsibility. But being seen to step up and “fix” a global energy shock means the government inflates its own culpability while attempting an impossible ask.

Second, to call out the elephant in the room the government would need to poke the beast. Having skilfully withdrawn Australia from the president’s line of sight, this carries broader risks.

To be fair, the government has been prepared to irk the White House and its tech-bro landlords with the news media bargaining code, the social media ban and now the digital duty of care.

But more broadly, the government’s fortunes are deeply embedded with Washington, with the military Keynesian of Aukus and the allure of the US AI hyper-scalers central to its national economic plan.

This creates an additional challenge for the Albanese government, with an Australian public far less enthusiastic about a future tethered to the US than what is emerging as the Canberra consensus.

This forced silence leaves the government exposed to its own populist backlash as people lose faith in their elected representatives to deal with the impact of the chaos that the self-same populism has unleashed.

So, what could the government do to stop itself being dragged into this vortex?

First, it needs to provide a coherent analysis of the moment. This is what Paul Keating did so masterfully through the last great global disruption. Yes, it is so much harder in a fragmented info ecosystem to nail home a message, but I’d warrant that “banana republic” would still cut through today.

The Canadian prime minister, Mark Carney, has provided the blueprint to grow his personal popularity in a declining economy even as US’s trade war on his nation hits home. He has removed the Trump straitjacket and positioned himself as the best custodian to meet the challenges of the times.

Second, the government needs to explain what it is doing to improve the lives of working people. Not just throwing short-term relief at people that will only add to the inflation pressures but showing how it is meeting the moment in support of the very people who are giving up on it.

Here it has some fertile ground to till, rebalancing the tax system’s uneven treatment of wages and capital, rebuilding sovereign industrial capacity and taking active steps to put workplace guardrails around AI adoption. It needs to breathe life into this important work.

Finally, the government needs to recast itself as the champion of change rather than the defenders of a status quo that so many are rejecting. While Hanson and the global conga line of Temu Trumps are tapping into the chaos, it would a mistake to think that all this momentum is being driven by rightwing nativism.

In street protests across Europe, South America and India, progressive movements are rising up not against immigrants, but the provision of basic services and integrity of their governments. In France the conditions of schools drove students to the streets initially. In Argentina it is university funding. In India, the Cockroach movement arose from examination fraud. In Spain, Italy and Portugal the target is affordable housing.

In is no coincidence many of these movements have been led by gen Z – young people facing reduced material prospects thanks to failing housing markets and a looming AI job apocalypse. Their resistance is a counterweight to the surge to the right.

The energy emanating from these progressive waves are Labor’s to harness in standing up to the rent-seekers and elites. If it doesn’t, the risk is that the Greens under its new leader steps in to fill the breach.

This is a really difficult time to govern. Chaos reigns. The Albanese government’s mandate is its sobriety. But to cheat the populist death spiral it may need to be prepared to go to the barricades with the rest of us.