Forget armadas of mythical boat people – the squeeze thousands of voters are feeling as they struggle to make ends meet could be the difference between Labor hanging on to the Melbourne outer metropolitan seat of Dunkley or losing it.

The crunch will come on Saturday and despite the bookmakers having the government odds-on favourites to win, a couple of opinion polls in the electorate have it on a knife edge.

One even has the Liberals a nose ahead.

The bifurcated electorate ranges from the comfortable around Mount Eliza to the distinctly uncomfortable towards the Frankston end of the division.

Local knowledge

In Carrum Downs, for example, 80 per cent of residents have a negative cash flow, their plight highlighted by a 10 per cent rise in people delaying paying off their credit cards.

According to RedBridge pollster Kos Samaras, this is not matched by people defaulting on their mortgage repayments because fear of losing a roof over their heads means they will move heaven and earth to meet these payments and cut back almost everywhere else.

A mitigating factor for Labor is the byelection was caused by the death of a respected local member, Peta Murphy, so there is no blame but rather sympathy for the position of the government needing to fill this unfortunate vacancy.

Naturally both the major parties are spinning the difficulty for them to win as they don’t want to appear arrogant or be accused of taking the electorate for granted.

Labor says the byelection has given voters the chance to register a mid-term protest vote – to send Anthony Albanese a message to try harder to address their cost-of-living pain.

The Liberals say they are finding no anger at the pre-poll booths against the government, no burning desire to take a baseball bat to Albanese.

Liberal Senator James Paterson says this is what he’s found and fears the swing may not be big enough for an upset.

Paterson cites contested research by the ABC’s election analyst Antony Green that the usual swing against governments in byelections caused by the death of a member is in the order of 3 per cent, well short of the 6.5 per cent margin Labor garnered at the 2022 poll.

Rates pain

However, the role of the Reserve Bank in this byelection could prove a game changer.

Back in June when the RBA raised rates for the 12th time in just over a year – bringing the cash rate to 4.1 per cent, its highest in 11 years – Greens Senator Nick McKim said the bank had “gone rogue”.

McKim was not alone in believing that rise was unnecessary and dangerous overreach, a number of economists agreed and the Greens Senator called on the Treasurer to use his powers under Section 11 of the RBA act to intervene.

Treasurer Jim Chalmers demurred and this week is hoping the Greens and Coalition support his move to implement a recommended reform to make the RBA completely independent by repealing Section 11.

In that Chalmers has significant opposition from former treasurers, Labor’s Paul Keating and Wayne Swan as well as the Liberals’ long-serving Peter Costello who believe the power is an essential democratic safeguard – not that it has ever been used.

Keating believes the threat to use it, as he did in the 1980s, has proved effective enough.

But if the 12th rate rise was causing borrowers eye-watering pain, the 13th one in November was more akin to the straw that broke the camel’s back and it came at a very vulnerable time for the Albanese government.

In October the Indigenous Voice referendum was comprehensively rejected, bringing down to earth with a thud the Prime Minister’s reputation as a savvy political operator after his 2022 election win.

Economic statements

One Labor insider says support for the government began sliding then and fell further when voters saw the RBA’s rate rise as a judgment on the government’s handling of the economy.

While Peter Dutton hasn’t advanced any policies to better address the cost-of-living crisis – in fact the opposition has voted against those put forward, such as energy bill relief – he has the luxury of a huge megaphone to highlight the problems.

In this the Liberals have amplified the perception that the Voice distracted the government from addressing these vital bread-and-butter issues.

Far from the reality, but potent none the less.

Leading No campaigner Senator Jacinta Nampijinpa Price has been enlisted to hand out how to vote cards in the byelection and is attempting to get the Senate to condemn the referendum as a $450 million waste of money.

Never mind the disrespect to the overwhelming majority of First Nations voters in remote Australia that endorsed the constitutional recognition asked for in the Uluru Statement from the Heart.

Despite this, Albanese has played a trump card with his rejigging of the stage-three tax cuts – Newspoll the latest to find majority support for this broken promise in the circumstances, including among Liberal voters.

The Opposition scoffs at the relief as not enough, but was not game enough to vote against it.

These amendments should fly through the Senate this week.

If the byelection is as tight as expected, the Liberal candidate Nathan Conroy could be helped across the line by the so-called donkey vote.

He has drawn No.1 on the ballot. Labor’s Jodie Belyea drew No.8 at the bottom.

Whatever happens, the result cannot be ignored and will shape the political debate as both sides position in the run up to the next general election, which Albanese has signalled will be early next year.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with more than 40 years’ experience covering Australian politics