Australians will vote for a new Prime Minister on Saturday.

So far, opinion polls show the race is too close to announce, but whoever wins will face burning issues like rising costs of living and rising borrowing costs after that the country raised rates for the first time in more than a decade. .

Economic concerns have been at the center of the national campaign for favorites – incumbent Prime Minister Scott Morrison of the ruling Liberal-National Conservative coalition is defending his position against his closest rival, Labor leader Anthony Albanese.

Analysts say the economic problems that have arisen, such as rising inflation, are largely beyond the control of either side, but whoever wins will have to tackle them.

“Anyone who comes into government will have to deal with the economic situation, they will have to deal with issues, including inflation, including cost of living pressures, and including, of course, global uncertainty in this moment thanks to issues such as the war in Europe,” said Zareh Ghazarian, senior lecturer in politics and international relations at Monash University.

Inflation in Australia hit a 20-year high in April, with the consumer price index jumping 5.1% on an annual basis on higher fuel and food prices food. That prompted the central bank to raise rates above analysts’ expectations for the first time in more than a decade.

Meanwhile, however, wage increases have not kept pace. The data showed wages in Australia rose just a modest 0.7% in the first quarter.

Sydney Morning Herald opinion polls earlier showed the main opposition Labor leading – but that lead has narrowed to 51%-49% on a bipartisan preferential basis, where votes are ranked by preference and distributed to the two best candidates. It was 54% to 46% two weeks ago.

Nearly 6 million voters out of an electorate of 17 million have already voted by mail or early voting in person, official data shows, according to Reuters.

Labor and the ruling coalition will have to tackle cost of living issues and challenges to economic growth, political observers say.

“One of the things that parties share is that they really talk about going towards economic growth. We haven’t really seen a party talk about… going the way of some European countries in the past, to have very frugal policies,” Ghazarian said.

“Like the Coalition, the [Labor Party] largely seeks to fix the budget through economic growth rather than austerity and its priority areas of energy, skills, digital economy, childcare and manufacturing have significant overlap with the Coalition,” said Shane Oliver, head of investment strategy and chief economist at Australian financial services firm AMP.

Labor will likely seek to be more “hands on” in the economy, compared to the coalition, Oliver said.

He stressed, however, that the difference in the tools they will use to manage the economy will be “relatively minor”.

“While there may be a bit more nervousness in the investment markets over Labour, it is difficult to see a big impact on the markets if there is a change of government,” he said. he adds.

Whether Labor or the Liberal-National coalition wins, they will “find it difficult” to manage the economy, according to Stewart Jackson, senior lecturer in the Department of Government and International Relations at the University of Sydney.

Jackson pointed out that inflation was driven by external events such as the rise in oil prices caused by the Russian-Ukrainian war.

He also pointed to another factor surrounding Australia’s relationship with China.

Jackson said the coalition government chose to fight with China and it was not positive.

“I see it [as a] zero-sum game,” he said. “It will hurt the economy, it will cause China to increasingly turn away from Australian products, to raise tariffs.

Shortly after the start of the pandemic, Australia’s relations with China, its main trading partner, deteriorated sharply. It followed Australia’s backing of a call for a global inquiry into China’s handling of its first Covid-19 outbreak.

These tensions spread when China imposed sanctions on a host of Australian products. They ranged from levying tariffs to imposing other bans and restrictions – affecting Australian products including barley, wine, beef, cotton and coal.

“Labour…have also campaigned on economic management, and they have criticized the government for what they perceive to be mismanagement of the economy,” Ghazarian said.

“As a result, the question of who is the best economic manager – while it would usually be a coalition force – I think this time has not been as strong as on previous occasions.”