What started as a small political spot fire turns into a major irritant for Anthony Albanese and Jim Chalmers | Tom McIlroy

With Labor under acute pressure from One Nation’s surge in opinion polls, backlash over a series of major economic policies and unhappiness at the direction of the country, the relationship between the prime minister and treasurer is showing signs of strain.

Conditions have looked a little scrappy for weeks now, but things got worse on Tuesday when Albanese, either deliberately or inadvertently, undercut his treasurer.

Interest rates hit a 15-year high last month, property values are going backwards and economic growth is lacklustre at best. Labor MPs are speaking up internally about the pain facing households, with some worried about the policy and the message not working.

To make matters worse, what should have been a small political spot fire, the backlash against the tax office’s move to ban credit card payments for tax debts, has turned into a major irritant for Labor.

After days of criticism that the plan would hurt small business operators who use credit card payments as a cashflow tool, the government changed course last Friday.

Chalmers announced the government would use new stopgap funding to delay the ban until the end of the financial year.

But last night, it was Albanese who took credit for the move.

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The prime minister let it be known that the head of the business lobby group had approached him personally to resolve the issue days earlier, and that his response had effectively been “it is in hand, I agree with what you are saying and I will get it done”.

Naturally, this morning, Chalmers faced questions about whether he had been rolled by Albanese. He insisted he had been involved in the decision-making along the way and interpretations of some kind of split were wrong.

Tension between prime ministers and treasurers are hardly new, and the current difficulties are not being viewed internally as anything more than a manifestation of growing political pressure on the government.

Albanese and Chalmers are significantly invested in each other’s success as Labor looks ahead to the next election.

Albanese tried to clean up the comments in question time, highlighting the role of Chalmers and other ministers in coming to the final decision.

“The treasurer and I had a discussion last week,” he told question time. “We convened the expenditure review committee, and we unanimously, right across the leadership of the government, agreed that the decision by the ATO, to have a limited period of pause on the ban.”

But questions about the state of their working relationship remain.

Earlier in the week the PM told Labor’s caucus the government would be “kicking with the wind in the fourth quarter” – the period immediately before the next election. But some caucus members note the last time he used the line was when Labor looked in serious electoral trouble.

The spat all but overshadowed Chalmers’ efforts to spark some cautious optimism about the direction of the economy in a major speech on Tuesday night.

Talking as much to his nervous Labor colleagues as to the audience gathered in Canberra, he said forecasts from the Reserve Bank, Treasury and leading economists suggested inflation would moderate and interest rate pain would be easing by this time next year. That improvement, he said, would help ease tough politics for the government.

Chalmers and Albanese will need those stronger economic conditions, and a reset at the heart of the government, if they really want to be kicking with the wind.