SYDNEY - Australian Prime Minister Anthony Albanese has proven to be spectacularly popular since he was elected a year ago, but his political honeymoon appears to be coming to an end.

Mr Albanese is facing a series of mounting challenges, including allegations that a senior minister misled Parliament, and concerns about whether his economic policies are exacerbating the country’s high inflation.

His move to hold a referendum to recognise Australia’s Indigenous people in the Constitution is also looking troubled, as public support for the proposal has dissipated.

Since leading the Labor Party to victory against the Liberal-National Coalition in May last year, Mr Albanese has enjoyed unusually high approval ratings – a reflection of his steady leadership and lack of any serious scandals or mistakes.

The latest Newspoll opinion survey, conducted between May 31 and June 3, shows that Labor had a decisive 55 per cent to 45 per cent lead over the Coalition. Mr Albanese was rated preferred prime minister by 55 per cent of voters, compared with 28 per cent for Coalition leader Peter Dutton, and 17 per cent uncommitted.

However, there are growing signs that Mr Albanese’s popularity may have peaked.

In recent days, the Prime Minister, who prides himself on his integrity, has been forced to defend Finance Minister Katy Gallagher over claims that she misled Parliament in 2021. In a hearing at that time, she had denied knowing about a sexual assault allegation by a former Coalition staff member days before the claim was made public, and that she sought to use that information to politically damage the Coalition.

Ms Gallagher on Tuesday told Parliament she knew about the allegation days before it became public in 2021, but did “absolutely nothing” with the information.

The saga has dominated headlines in recent days and has drawn in Mr Albanese, who has strongly defended Ms Gallagher. He said on Tuesday that she had extraordinary integrity, and accused the Coalition of concocting a “bizarre conspiracy theory”.

But the incident – despite being murky – has raised the first serious questions about the government’s integrity.

Separately, Mr Albanese’s economic record has come under the spotlight over concerns that his support for wage rises risks fuelling inflation. These criticisms followed the surprise decision by the Reserve Bank (RBA), Australia’s central bank, to lift interest rates last week due to persistently high inflation. The interest rate is now 4.1 per cent, up from 0.1 per cent in May 2022.

Until last week, Mr Albanese had largely avoided blame for the rising rates, which began before he was elected. But RBA governor Phillip Lowe has warned that high wages – which Mr Albanese supports – could spur inflation, though he also pointed to other major factors causing rate rises, such as international inflation and increasing house prices.

Perhaps sensing that Labor may soon start to incur the public’s wrath over rising rates, Mr Albanese last week took a not-too-subtle jab at Dr Lowe. Asked about his government’s recent erroneous prediction that interest rates would remain below 4 per cent, Mr Albanese responded by criticising Dr Lowe’s dire forecast in 2021 that rates would remain at historic lows of 0.1 per cent until 2024. The Premier also wryly noted that his government’s prediction was “not as incorrect as the one saying there’d be no increases till 2024”.

He now faces a difficult choice over whether to extend Dr Lowe’s term as governor later this year. Replacing him would mean that the government further stamps its mark on the economy and incurs the blame for future rate rises.

The other looming challenge for Mr Albanese is the referendum later this year on whether to grant constitutional recognition to the nation’s Aboriginal and Torres Strait Islander people and to create an Indigenous advisory body.

Mr Albanese took a political gamble in pushing for the referendum, but opinion surveys show support for the change is dropping.

A poll on Tuesday showed 49 per cent of people back the change, down from 63 per cent in August 2022, while 51 per cent oppose it.

Typically, referendums in Australia succeed only with bipartisan support. But the Coalition leader, Mr Dutton, has opposed the change, saying it is divisive and would grant Indigenous Australians a greater say in the nation’s affairs than other Australians.

For Mr Albanese, a referendum loss would not only risk setting back the cause of the nation’s Indigenous people but would also raise questions about his political judgment.

The Prime Minister’s honeymoon was never going to last forever. And his next political test – how he handles his leadership after his shine has started to fade – will perhaps be his most difficult yet.