Peter Dutton has been receiving a good many political breaks recently – Anthony Albanese’s new house is the latest icing on the cake. Although the Coalition is not expected to win next year’s election, presently it looks placed to do well.

So, as they prepare their campaign, what issue would Liberal strategists be most afraid of? My bet would be the looming battle over industrial relations. This could be more dangerous for Dutton than his risky gamble to promote nuclear energy.

With the election set to be fought largely around the cost of living, the government will reach for workplace issues as a potential lifeline. Industrial relations is made for a ferocious Labor scare campaign that the Coalition will find extremely difficult to counter.

As the opposition keeps saying, the Albanese government has delivered extensively to the union movement’s demands, especially on behalf of low-paid workers.

It has supported wage rises and will itself pay for some (notably for child care staff).

It has legislated to protect the rights of casuals, provide minimum standards for gig workers, and stop employers using labour hire arrangements to undercut wages.

Wage theft has been outlawed; domestic violence leave granted; the “right to disconnect” introduced.

Most importantly, multi-employer bargaining – hated by parts of business – has been facilitated, and this is sure to spread in coming years.

You don’t need much of a head for political tactics to devise Labor’s campaign.

It would go something like this: “The Albanese government has advocated for higher wages and given you all these benefits and protections, that the Liberals will strip back. Remember the Howard government’s WorkChoices.”

This could be potent among the lower-to-middle income workers in the outer suburbs, to whom Dutton is pitching.

As in most areas, the opposition says it will release its industrial relations policy closer to the election.

So far, it has promised to restore the Australian Building and Construction Commission (the “cop on the beat”) and the Registered Organisations Commission (a regulatory body governing unions and employer organisations).

It has also said it will repeal the right to disconnect, review the labour hire law, change the definition of casual employment and reduce the regulatory burden on small business.

The Coalition is under pressure from business to agree to a wish list to tilt the playing field back towards employers. For instance this week, the Australian Chamber of Commerce and Industry called for the definition of small businesses to be expanded, so that more firms would benefit from having fewer workplace burdens imposed on them.

The opposition must decide how many of the Labor changes it will pledge to roll back or alter. At the same time, it will have to try to reassure workers it doesn’t have a hidden agenda. Both will be difficult.

On the roll back, employers will be pressing for the Coalition to go further than is politically wise. There are senior voices within the Coalition urging caution. But whatever Dutton says he won’t do is likely to be met with scepticism by a distrustful electorate.

Regardless of the policy it announces, there’ll be no way the Coalition can avoid becoming a big target on industrial relations.

Moreover, its argument that the government’s IR changes are bad for the economy will be hard to prosecute because it will be some time before their full impact can be judged. The government itself has an independent review of its initial measures, due to report in January. That will allow it to either claim everything is hunky dory, or offer some fine-tuning.

Much of the nitty-gritty of the IR contest will be carried by Workplace Relations Minister Murray Watt and opposition spokeswoman Michaelia Cash.

Watt, from the left, who recently took over the portfolio from Tony Burke, is an articulate straight-talker. Formerly agriculture minister, he has been one of Albanese’s best-performing ministers.

Cash, who like Watt is in the Senate, has plenty of experience: she was industrial relations minister in the Morrison government. But she often comes across as shrill and reliant on slogans. In this election, the easy IR slogans will be on the government’s side. Cash is also media shy – she hates not knowing what’s coming.

On the ABC on Monday, Watt rehearsed the government’s lines. Declaring IR “a key defining topic and contrast between the two major parties of government”, he said: “What this comes down to is, at a time when Australians are already doing it tough, Peter Dutton and the Coalition will make things harder for Australians. It’s the worst possible time to be cutting pay and conditions.”

While the government is holding the upper hand on the politics of IR, the issue is not without  considerable problems for industrial and political Labor.

Installing an administrator into the crime-riddled CFMEU was a correct and inevitable step. But the action has triggered a reaction among some militants in the union movement who are now splitting from the ACTU.

This week a group from the National Building Industry Group of unions met to discuss tactics.

The rebels, who plan to hold a “Trade Unions for Democracy Summit” in December and are threatening to fund independent candidates (which in practice probably means Greens), hit out at both the government and the ACTU.

“The forced administration [of the CFMEU] driven by Albanese, Murray Watt, and Tony Burke, and supported by the ACTU, has opened the door for a sustained attack on construction workers,” they said in a statement.

The boss of the Electrical Trades Union, Michael Wright,  told The Australian: “There is a deep rupture  across the labour movement.”  He said the consequences were likely to be “far reaching”.

While the rebels are only a sliver of the wider union movement, with the ACTU retaining overwhelming support, the split is disruptive and difficult to handle both within the movement and for the Labor party. The latter will be some millions of dollars short for its campaign, and the Greens’ coffers are likely to be boosted.

Cleaning up the CFMEU – and the construction industry more generally – was not on the government’s “to do” list when it came to power. It was a reaction to revelations in the Nine media of the appalling conduct within this rogue union.

But the government will seek to turn it to its advantage in its IR campaigning, using it as an example of being willing to stand up to thuggery.

Michelle Grattan, Professorial Fellow, University of Canberra. Republished from The Conversation.