Can the Albanese government turn 2024 into a happy new year despite multiple challenges?

Halfway into its first term, the big question is whether the Albanese government is in a temporary bad patch, or at the beginning of a downhill slide.

We’re not talking immediate opinion polls. They can jump about in the winds of the moment. We’re talking about being on top – or not – of the policy challenges and the politics. The longer-term trend in the polls follows as a consequence of how well those are handled.

Despite its unrelenting activity and announcements, the federal government is struggling on key issues, and Prime Minister Anthony Albanese, after successful trips to Washington and Beijing, is suddenly looking on the back foot.

It seems inexplicable that Albanese has got himself cornered over whether he did or didn’t raise the sonar incident when he met Chinese President Xi Jinping on the sidelines of APEC last week.

The action by a Chinese warship in unleashing sonar pulses at Australian sailors who were untangling fishnets from HMAS Toowoomba last week has set off a war of words between the two countries.

Australia said the Chinese acted unprofessionally. China accused Australia of “making reckless and irresponsible accusations” and declared it should “do more to build up mutual trust”.

Of course Albanese should have brought the incident up when he met Xi. And if he did, of course he should say so. To maintain, as he has been doing, that he doesn’t disclose the content of meetings with another leader on the sidelines of a conference is a nonsense excuse.

Albanese’s apparent reluctance to be forthright (whether in the meeting or outside it) sends the wrong signal to the Chinese, suggesting he will go out of his way not to offend them. It is also a bad look at home, displaying a lack of frankness with the Australian people on an important matter.

Perhaps it’s no bad thing the sonar incident occurred when it did. It’s a timely reminder that regardless of the recent nice words, for China this is a relationship of convenience. As one China expert puts it: “Sooner or later [Albanese] was going to be mugged by strategic reality”.

Will the fracas set back the new rapport? Maybe we can apply the lobster test.

The only trade restrictions remaining on Australian products (apart from tariffs on wine, now to be reviewed) are on lobsters and beef from some abattoirs. Trade Minister Don Farrell has had recent discussions with his Chinese counterpart about lobsters, and engaged in some lobster diplomacy with Albanese in Shanghai.

Farrell has been expecting a breakthrough by Christmas. The government is encouraged that this seems still on track, judging by a Wednesday article in the Global Times (a state-owned official mouthpiece) anticipating a quick resumption of the lobster trade.

On a very different front, a week after rushing through emergency legislation, the government is still confronting the aftermath of the High Court judgement forcing the release of immigration detainees, including people who had committed very serious crimes.

The government’s new law to impose controls on these people is now being legally challenged. And after last week insisting they could not be re-detained, the government has now confirmed it is examining whether there’s a legislative way to do just that with at least some of them.

While the opposition has stirred a storm over the ex-detainees, the government is facing fire from its state Labor colleagues, in New South Wales and Queensland especially, following its announcement of cuts to the infrastructure program. Queensland is worried about next year’s election. NSW seems more generally antsy, anticipating being financially squeezed in a range of areas. Its vociferousness has taken Canberra somewhat by surprise.

But NSW and other states know what’s coming, especially on the National Disability Insurance Scheme, where the federal government is determined to reduce the rate of growth. This will involve two politically unpalatable moves.

The first is changes to eligibility. There is much concern about the large number of children with mild autism on the scheme (around one in 11 boys aged five to seven is on the NDIS).

The second will be to push the states to take greater responsibility for providing more and better disability services for people outside the NDIS. The federal government contrasts the start of the NDIS, when the states shared its costs on a 50-50 basis, with the present breakdown – the states provide only about 30% of the funding, and that’s heading downwards.

The Victorian government this week accused the Feds of being unforthcoming about their plans.

The minister for the NDIS, Bill Shorten, will soon release the government’s review of the scheme. Managing the fallout from the changes that follow will be complex and politically difficult, given the sensitivities of disability policy, the inevitable blowback when changes produce losers (actual or potential), and the politics of triggering the fiscal nerve of the states.

This week’s announcement that the government will dramatically boost its underwriting of investment in renewable energy production and storage highlights another challenge for the coming months. The expanded guarantee will be on-budget but the cost (or profit) to the taxpayers won’t be known until the projects start delivering.

The transition to clean energy, absolutely vital for Australia, is not going as fast or as smoothly as required to reach the target of renewables providing 82% of electricity generation by 2030. Not only must more investment be attracted, and quickly, but the government will continue to face resistance from local communities unhappy about transmission wires and even offshore wind farms.

Due for release before year’s end is the government’s migration policy. Immigration props up economic growth but the huge net intake is putting further strain on already overstretched housing. There is strong pressure on the government, including coming on MPs from their electorates, to restrict the growth in the intake, although options to substantially reduce the current trajectory are limited.

These various policy issues are apart from the pain around the cost of living, coming from high inflation and a baker’s dozen interest rate rises, with the government’s capacity to do much that’s substantial very limited. This takes us to another debate over the stage 3 tax cuts, as Treasurer Jim Chalmers puts together his next budget.

Christmas will give the government a brief respite. But can it turn 2024 into a happy new year?