Credit by association

Wednesday, 24 October 2007 

Without underestimating the Treasurer’s ability to stuff it up, Labor probably has more to lose at next Tuesday’s debate between Costello and Swan.

No matter how many mistakes the Treasurer makes, he will at least be more associated with the strong economy than Swan.

But this is all the economic debate is really about. Those who think the management of the economy is an important factor in deciding between the parties, would have to find the economic issues over which they would be divided.

It is hard to see what they would be. In the last century there were only ever three real economic issues: union power (inflation, wages, productivity), how much to open up the national economy to the world (tariffs, currency) and how much business profits were to be centralised for the economy as a whole (government spending, tax cuts) . The first has been resolved, the second also with the deregulation of the 1970s and 1980s which in turn pretty well now decides the last one.

Rudd’s me-tooism on the economy is not a tactic, it is economic reality. Neither party can create much difference over something on which they have little influence. This is the reality that has been exposed since Howard promised to keep interest rates at record lows at the last election. It is not that he is to blame for the rate rises since (or the one that could be coming) it is that no-one is to blame. He was simply making a promise that he had little influence to keep.

That lack of control is why both parties have such a preference for promises that won’t come in until years away. But it is not only the long-range timing that limits their political impact, it is also the fact such promises reflect little real political difference between the parties, but seems a normal part of keeping the budget accounts. This is likely to be the last election which will see such an emphasis on pork-barrelling.

The media, still largely stuck in the past when political differences on the economy did exist between the parties (a long time ago now) are still discounting Labor’s lead by the fact that they are lagging in economic management. But the coalition’s current lead on economic management more just reflects their closer association with it from being in power. As Labor’s turn approaches, this is likely to be the only real polling gap that closes during the campaign.

Posted by The Piping Shrike on Wednesday, 24 October 2007.

Filed under Tactics

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