Anthony Albanese may have reshuffled key ministers in his government, but his biggest challenge remains the same and it will hit with a thud when the latest inflation numbers are released on Wednesday morning.

Economists are bracing for the quarterly cost price index to be a little elevated, pushing the annual measured growth in the cost of living dangerously close to 4 per cent – that’s 1 per cent above the Reserve Bank’s upper target to contain prices from galloping out of control.

The RBA has been sitting on its hands since it raised the official rate in November, but its 12 rate hikes over 18 months while helping to squeeze the life out of the economy and put domestic and commercial borrowers under intense pressure may not be enough.

That’s a judgment the RBA board will make at its meeting next week, but economists like Stephen Koukoulas believe it should follow the example of Canada’s central bank and begin cutting rates.

Recession threat

Koukoulas, who was an adviser to the Gillard Labor government, says: “For heaven’s sake it would only be 25 basis points – or a quarter of one per cent, but it would be insurance against accelerating the already anaemic economy crashing into recession.”

“Better to head it off than to wait for the disaster to happen.”

No doubt the Prime Minister and his treasurer Jim Chalmers are privately harbouring the same thoughts.

Albanese needs no persuading the biggest challenge facing his government is convincing Australians they have their backs.

And, more than feel their pain, is doing something about it.

PM’s priority

The PM called the cameras into the first meeting of his refurbished cabinet so the nation could witness their riding orders.

“Our priority is, of course, cost of living. We understand that so many Australians are doing it tough,” Albanese said.

He reels off the tax cuts and other measures that began operating this month.

His problem is voters aren’t showing much gratitude – yet.

Worrying signs

The latest RedBridge poll – the first for three months – shows the Coalition’s primary vote is up from 37 per cent to 41 per cent.

Analysis of the numbers shows the surge is coming from people with less education who are really struggling to make ends meet.

In April Labor was leading among people getting by on less than $1000 a week by 56 per cent to 44 per cent after preferences.

Now the Coalition is in front 52 per cent to 48 per cent.

And there are similar numbers for voters whose household income is less than $3000 a week.

The poll overall has the Coalition leading Labor – 51.5 per cent to 48.5 per cent, for the first time since the election.

The tightness of this result is mirrored in other polls suggesting that Albanese has a lot of work to do convincing voters he can deliver the mission statement he repeated to his ministry of “no one left behind, but also no one held back”.

This will take a potentially mortal hit if the bank judges checking price rises means it must inflict even more pain.

Time to fight

That would mean Chalmers and the government’s leading lights will have to be at the top of their game to take the fight up to the Dutton opposition, which so far has merely only needed to blame the government without coming up with any answers of its own.

The Liberals tying inflation to the $12 billion worth of spending in Chalmers’ budget suggests Dutton would inflict a dose of Abbott-Hockey austerity on everybody, hitting the most vulnerable hardest.

No one on the opposition benches has fessed up to that, but Labor needs to start getting voters to consider what options may be on offer closer to the election due by May next year.

Albanese’s ministerial housekeeping has a very clear eye to getting his team match ready.

His best parliamentary performer and experienced minister, Tony Buke has been given the Home Affairs and Immigration portfolio to neutralise one of the opposition’s favoured attack lines on border security and linking immigration to all of the country’s economic ills.

Among those ills is the housing crisis and again Albanese has turned to the more willingly pugnacious and articulate Clare O’Neil to take the fight up to the opposition and the Greens.

Challenge begins

Albanese signalled on Monday he is no longer prepared to sit back and allow Dutton to go unchallenged.

We got a taste of it with his reaction to dangerous and incendiary remarks by opposition frontbencher Barnaby Joyce at the weekend.

Joyce likened voting at the ballot box to loading bullets in a gun to take out Labor politicians. He mimicked pulling the trigger and saying “Good bye Chris (Bowen), good bye Steven (Miles), good bye Albo.”

The Prime Minister says Dutton is “weak” for not sacking Joyce, especially in light of the Trump assassination attempt and the AFP warning of increased threats of violence against MPs.

Joyce apologised for the metaphor on morning TV, but it’s clear the mood is becoming more febrile.

The Treasurer is preparing for inflation to be confirmed “persistent” this week but is “confident” it will continue to moderate after that “because of the design of our cost-of-living policies”.

His colleagues, no matter what their roles now are, will be hoping he is right.

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