Anthony Albanese is plotting to call a very early election. Peter Van Onselen reveals the inside word from the PM’s war room – and the telling clues Aussies are about to be forced to decide

Anthony Albanese wants to call early elections in the hope of securing a second term before the economy deteriorates and to avoid the risk of another rate hike in September.

The date he is looking at is Saturday, August 31st.

While there was much speculation at the Midwinter Ball in Canberra this week that the Prime Minister would call an election in mid-September, that would risk interest rates rising mid-campaign.

Both Scott Morrison in 2022 and John Howard in 2007 had to endure a rate hike during their campaigns. Both lost their re-election bids.

After a dozen rate hikes in the first term of this Labour government, another one during the campaign would be a devastating blow that Albo is keen to avoid at all costs.

The election orders must be issued 33 days before polling day, meaning the prime minister is looking to the last weekend of the month – 27/28 July – to visit his newly appointed governor-general Sam Moystn and dissolve parliament.

MPs and senators have already gone home for the winter recess, with parliament not due to return until mid-August. That won’t happen if the prime minister pulls the trigger on an August 31 election. It may not even happen if speculation about a September election proves correct.

Some within the Labour Party are concerned about a possible rate hike in August, which is a reason not to go too early.

But those close to the prime minister are much more concerned about a September hike. They believe the Reserve Bank will be less likely to raise rates during an August campaign than in September, when the economic case for rate hikes appears stronger.

The new inflation figures will be released in early August, but the Australian Bureau of Statistics will receive the figures earlier so the Prime Minister and Finance Minister can consider them before calling an election.

If the numbers are significantly worse than expected, raising the likelihood of a rate hike in August, even in the middle of the campaign, the prime minister may decide to postpone his plans for an early election.

First-term governments often go to the polls early. Malcolm Fraser did so in 1977, and Bob Hawke in 1984. John Howard went to a snap election in 1998.

The federal Labor government will not be re-elected until May next year, but that would hamper the timing of the budget.

Furthermore, there is a risk that the country could enter a recession and that homeowners would face higher interest rates before then, which would not improve Labor’s chances of retaining its majority.

The Prime Minister has privately told people close to him that while he expects to win the next election, he also believes it is unlikely he will retain Labor’s parliamentary majority, forcing him to negotiate with the crossbench to form a minority government.

Labor currently holds 78 seats in the 151-member House of Commons, compared to 57 for the Coalition. The remainder are made up of Teals, Greens and Independents. The size of the House of Representatives will shrink to 150 seats at the next election, meaning it will need 76 seats to form a majority government.

Although talk so far has focused on early elections later this year – after the football final – or early next year, either option would clash with other election campaigns.

Queenslanders go to the polls in late October, the US presidential election is in November and the Western Australian state election is in March next year.

If Albanese sticks to his plan to meet voters on August 31, he will avoid the federal election campaign clashing with any of the other campaigns.

But that would mean elections would have to be called in just three weeks.

The prime minister has cancelled plans to travel abroad for the NATO conference later this month and has changed the approval procedures for ministers so that all new spending must go through his office, rather than just the cabinet spending committee.

This has all the hallmarks of early election planning.

However, Victorian Labor has yet to announce all of its candidates for the federal election, including in the ultra-marginal Liberal seat of Deakin. The redistribution has dramatically improved Labor’s chances of winning the seat, making up for losses elsewhere, such as WA.

Senior federal Labor officials in Queensland are also concerned about holding an election before their state election, fearing the stench of the state Labor party could influence the federal vote.

But Albo is willing to take this risk unless the coming inflation numbers are too bad and force him to switch to Plan B.

If you got to the polls early, you would benefit from the Phase 3 income tax cuts, which went into effect July 1. The cuts are the result of a $40 million taxpayer-funded advertising campaign currently underway to sell their value to voters.

The prime minister is also understood to believe that an early election would expose opposition leader Peter Dutton’s lack of detail on his nuclear policy, with costs and models yet to be released.

As opinion polls tighten, senior Labor strategists worry that the longer the election campaign goes on, the greater the chance of first-term failures being exposed.

Another risk is that the lack of discipline will continue through the ranks, reducing the likelihood that voters will do what they have been doing since 1931: grant a first-time government a second term.

While August 31 is still the target date for an early election, the fallout from Western Australian Senator Fatima Payman’s first-term exit from the Labor Party over Palestine has been an unwelcome distraction.

It happened just as the Prime Minister was hoping all attention would be focused on support measures to reduce the cost of living, thereby improving the government’s standing with voters.

Albo’s foresight of early elections explains why he reacts so negatively to Senator Payman’s conscience vote. At first he tries to downplay it, but then he exaggerates and forces her to leave the party.

He will watch closely in the coming weeks, hoping that interest in her story will wane and that voters will pay more attention to the financial help the government is offering them.