Rate rise re-writing

Friday, 26 October 2007 

They just don’t give up.

Having spent most of the year using the strong economy to dismiss Labor’s polling lead, now the media are using the economy to explain it. The possible rise in interest rates on Cup Day is being touted as a major blow to the government’s re-election. Yet why interest rates should be such an issue this election is not obvious.

Australian interest rates are low. Maybe so-so against international comparisons but certainly low by historical standards in this country. It is possible that high mortgages are exaggerating their effect but the RBA doesn’t think so, which is one reason why they keep raising them.

Nor is it really Howard’s broken promise that is a problem. The record low interest rates ads in 2004 only ran for a couple of days and besides, it was not how the Liberals posed the issue. It was on the basis of trust, not especially because Labor was proposing anything wrong on the economy, but because Howard translated the doubts raised over Labor’s commitment to the US alliance to their handling of interest rates as a way of bringing it home.

Grattan and Shanahan get closer to the truth when they claim a Cup Day rise by the RBA will help Labor’s claim that Howard has little control over the economy. It is noticeable that Rudd has made little connection between the rate rises and government policy (although Swan has come out with some stuff about productivity, maybe prepping for the debate). Certainly having a rate rise in the middle of the campaign would emphasise that lack of control, something the politically astute Treasurer has now compounded with his hysterical warning of a ‘Tsunami’ from the Chinese economy.

The trouble is, how long have the public worked this out? The leaked Crosby/Textor report suggested it was picked up in at least July, the Sky News focus group confirmed it a few weeks later (although ignored by the election expert they brought over from the US). Indeed, maybe that the economy is no longer a political issue is why Labor has held such a strong lead during the entire year despite the strong economy.

In fact despite the rate rises, the polling has been stable and saying the same thing all year with little indication that the voters don’t mean it. It is not the government’s support that has been falling away this year but the media’s confidence in it’s survival. What we are seeing is a re-writing of what has been going on this year that suggests that as the year progresses, more and more reasons are building why the government is on the way out. Not because of what is happening in the electorate but in the mindset of a media that is finally waking up to what has been staring them in the face all along. So we have a growing uprising over Workchoices in the electorate which seems to be building in inverse proportion to the Labor leadership’s opposition to it and now every interest rate rise delivers another blow to a floundering government.

Definitely the cheekiest example is Dennis Shanahan who talks of another rate rise being a devastating blow to the government and then follows up with a piece berating Rudd for pretending that this election is losable. This is from someone who has been pushing Howard’s comeback all year. The 2004 result was rewritten to become a Latham fiasco by those not wanting to think of what happens when international events impact a hollow Labor party. Wait to see the re-writing that will happen now that it’s the Liberals’ turn.

Posted by The Piping Shrike on Friday, 26 October 2007.

Filed under Media analysis

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