Parliament resumes this week – with the countdown to the federal election underway. The Australian Electoral Commission says a poll can be held from Saturday 4 August next year to Saturday 19 January, 2008.

The immediate focus will be on the fate of the government’s border protection legislation in the Senate, with former parliamentary secretary Judith Troeth still threatening to cross the floor and Steve Fielding’s position unclear.

Yet it’s matters economic that will be of most significance – long and short term. “Cabinet is split over whether to abandon tariffs protecting Australia’s clothing and motor vehicle industries from cheap Chinese imports,” The Australianreports today.

Combine that with fears that WorkChoices will see pay and conditions reduced and Labor’s campaign against temporary overseas skilled workers and there’s plenty of scope for populist scaremongering that taps into those inextricably linked Australian traditions of racism and protectionism. The situation won’t be helped by uncertainty over interest rates, inflation and business and consumer confidence.

The government risks a mortgage-belt backlash in “the politically forgotten states of South Australia and Tasmania, and from Kim Beazley’s home state of Western Australia,” George Megalogenis writes in The Australian today. “The nation’s most-exposed home borrowers, in NSW and Queensland, have less scope to hurt the Howard Government than is commonly thought because there are fewer marginal seats on offer for Labor than in the smaller states.”

And then there are petrol prices. “Tax cuts have helped Australian households cope with the higher petrol prices,” the prime minister said on Meet the Press yesterday. Maybe, but petrol prices remain the clearest, most obvious barometer of the mood amongst voters – and the pinch on the pocket that they’re feeling.

John Howard knows. “The greatest worry of my political life, petrol, in terms of its impact on the average Australian,” is how he put it yesterday.

In stormier conditions, the prime minister will be watching the glass more closely than ever. As it rises and falls, so will his re-election hopes.