Labor is no doubt dreading the likelihood of further interest rate rises, despite Treasurer Jim Chalmers talking up the economy.

When One Nation outpolled Labor’s primary vote for the first time back in June, Prime Minister Anthony Albanese responded: “It’s the economy, stupid”.

He argued voters were struggling economically despite working hard. Consequently, “many people feel that the system isn’t working for them”.

Albanese’s overreliance on an economic explanation risks underestimating other factors such as race, ethnicity and gender.

Nonetheless, election studies and opinion polls have indeed shown economic concerns are a major factor driving the increased vote for One Nation.

Two in three One Nation voters say their household finances have worsened over the past few years, while 77 per cent believe a Hanson government would successfully manage the cost-of-living crisis.

With voters in a world of economic pain, what might it mean politically?

The economic pain is real

The economic pain voters are feeling is real. Successive interest rate increases have seen many voters paying tens of thousands of dollars extra in mortgage repayments since Labor was elected in 2022.

The economy might be growing slowly, but living standards are not. Profits are rising but real wages are dropping due to inflation.

The government is being punished as a result. The Coalition is blaming Labor for Australia’s economic woes. One Nation is blaming both major parties.

However, the economy is also being impacted by forces outside any Australian government’s control. For example, Albanese argues “every country is facing” economic problems and inflation as a result of the wars in Ukraine and the Middle East. It should be noted, though, that Australia’s inflation and interest rates are particularly high.

The relatively small growth in the Australian economy that may result in the Reserve........

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