Malcolm Turnbull's winter of discontent

If the Turnbull government is puzzled about why it is languishing in the polls, it needs to look at just three statistics: wage growth, underemployment and electricity prices. Each is trending badly against the sensible centre of the Australian community to which Turnbull seeks to appeal.

Middle Australia is struggling to make ends meet, while the government is seen, at best, as being distracted and, at worst, as actively operating against the interests of working people.

With unemployment edging downwards, wages should be rising, but wage growth is at its weakest since the statistician began collecting data almost two decades ago. The explanation lies in the underemployment rate, which is at its highest level since the Depression years of the 1930s. More than one million Australians want more hours of work but can't get them.

When account is also taken of those who have dropped out of the workforce altogether – perhaps because they were looking for a few hours of part-time work but gave up after receiving so many knockbacks – we get a single measure called the labour under-utilisation rate. It is the best indicator of the state of the labour market. At 14 per cent, it is much higher than during the Global Financial Crisis and the Global Recession of 2009.

The government seems too interested in discussing whether it is the party of Menzies or something else. AAP

Those middle-income earners lucky enough to be working the hours they want are disappointed, too. The statistician has examined the changes in average gross weekly household income over the last few years for each one-fifth grouping of households. The top 20 per cent has easily fared best; the rich are getting richer. The bottom 20 per cent has done okay, courtesy of our needs-based income support system. But the 60 per cent in between the rich and the poor has languished, with the middle 20 per cent recording the weakest income growth of all. The Australian middle class – home of Malcolm Turnbull's sensible centre – is being hollowed out before our eyes.

If middle Australia wasn't already grumpy enough, the cost of non-discretionary items such as electricity, healthcare and childcare is rising much faster than their incomes. As this is happening, they see a government at war with itself, arguing about whether it is the party of Menzies or a bunch of conservatives, ostensibly far more interested in squabbling over how to select its candidates for elections than in easing the financial pressure on their constituents.

When the government does get around to talking about policy, it blames the states for electricity price rises, supports reductions in penalty rates, allows bracket creep to take more and more tax from honest PAYG wage and salary workers who don't have access to tax rorts, while having no difficulty finding $65 billion for company tax cuts.

Faced with such weak growth in incomes, middle Australia simply will not accept sharply rising electricity prices without punishing a Coalition government that had promised to reduce them by scrapping the carbon price. While the Coalition party room dithers over the Finkel Review's recommended clean energy target, serious consideration is being given to building a new coal-fired power station. Since the private sector will refuse to build it, the Turnbull government would need to do so. Meanwhile, investment in renewable energy, which can be brought to market much sooner, would be stultified. The result, for at least the foreseeable future, would be even higher electricity prices.

Finkel makes it clear that a super-critical, coal-fired power station would not qualify for his recommended clean energy target. Manipulating the target to allow super-critical, coal-fired power to fit in would make a mockery of it.

If the government remains paralysed over the clean energy target, the best option would be to do nothing – to do no harm. With so much generating and storage capacity being accumulated in homes "behind the meter", applying the technology to harvest this power during peaks and emergencies would be a much more promising and timely option than planning and building a taxpayer-funded, coal-fired power station.

When a government is in political strife, it wouldn't have occurred to me as a former prime ministerial adviser and cabinet minister to recommend cutting weekend wage rates, presiding over soaring electricity prices and squabbling over who should run the party. Last Tuesday was the 30th anniversary of the Hawke government's 1987 election victory, back when good policy was good politics. It seems like such a long time ago.