Any hope the Reserve Bank might come to the government's rescue with a pre-Christmas interest rate cut evaporated on Tuesday when the governor, Michelle Bullock, warned the next rate move could be up.
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"I wouldn't say the risk of a rate rise is increasing but the board is focussed on the upside risk," she said.
While acknowledging many were doing it tough Ms Bullock had little to offer in the way of comfort: "I can't tell them when we will bring interest rates down but I can say that my laser focus ... is on bringing inflation down and that will help them".
This reluctance to offer forward guidance is understandable given Dr Philip Lowe was slammed for repeatedly saying rates were unlikely to increase before 2024 at the height of the pandemic. It is also sensible given while a rate cut was not discussed, the possibility of an increase further down the track if inflation continued to be "sticky" was.
The RBA stressed wage growth was not helping: "Although growth in unit labour costs has eased, it remains high. Productivity growth needs to pick up in a sustained way if inflation is to continue to decline".
That's a red flag given productivity growth was flatlining long before the pandemic and business leaders have gone hoarse with oft-repeated warnings Labor's industrial relations reforms will actually drive it backwards.
While that's a contested view, given the reforms redress the power imbalance between workers and bosses entrenched during nine years of LNP rule, the takeaway is the RBA wants consumer spending, especially by cashed up baby boomers, to fall. It would not be unhappy to see an unemployment rate in the mid four per cent range either.
While Ms Bullock said "we're trying to do it [beat inflation] without a recession" she also acknowledged "the narrow path" towards the "soft landing" was getting narrower.
None of this is good news for the Albanese government which has lost a lot of paint since the defeat of the Voice, the released detainee debacle and the emergence of cost of living as the single most important issue for Australian voters.
Recent polling has indicated a majority of respondents believe the Coalition would do a better job of managing the economy and national security than Labor. The two-party-preferred vote is now neck and neck.
It's hard to believe that just over a year ago Labor led the LNP by 61.5 per cent on the two-party-preferred vote. If an election had been held last April it would have picked up a significant number of seats.
The most remarkable turnaround has been for preferred prime minister. When Peter Dutton was confirmed as the opposition leader he trailed Mr Albanese 25 per cent to 59 per cent.
The Resolve Strategic poll released on Monday showed he had not only closed what seemed an insurmountable gap but actually edged ahead to lead Mr Albanese by 36 per cent to 35 per cent.
The Albanese government's honeymoon is well and truly over. While only the most foolhardy prognosticator would suggest this could be a one-term government there is a real possibility Labor will return to minority government in 2025.
The ALP has only itself to blame. While the opposition leader's dogged negativity has played a part, Mr Dutton has been gifted a succession of own goals by an administration that has lost its way.
Mr Dutton has been setting the agenda since the budget, which is now a distant memory, and Labor is in urgent need of a reset over the winter break. The chances of a cabinet reshuffle are now much higher than the odds of an early election - or an interest rate cut.
Mr Albanese needs to stop giving Mr Dutton oxygen.
