Friday, 16 November 2007 

With just over a week to go, the campaign may have reached a turning point.

The interest rate rise and Rudd’s under-spending at the launch has now decisively shifted the campaign into Labor’s favour.

It isn’t that people blamed Howard for the interest rate rise and it probably had little direct impact on the vote. Nor is it that people really think Rudd is more of a fiscal conservative than Howard. It’s just that both events have exposed the myth that Howard has been hiding behind for so long.

For most of this year, pundits have been saying it doesn’t matter that Iraq doesn’t work for Howard, or terrorism or illegal refugees, or climate change or even IR is not working, there is always Howard’s lead on economic management. The economy and the hip pocket were supposed to be the last, but most important defence of the government.

In reality it was looking at things upside down. The problem is that there is no economic management issue. Keating gave the game away earlier this year when he said that after his reforms there was little to do but balance the budget. It was precisely because the economic issues that had defined the Labor and non-Labor parties through the last century (unions, government spending) had been resolved was the reason for Howard’s policy vacuum. Issues such as Iraq, and terrorism were what he used to hide the hole in his program and give him the pretence of being a conviction politician.

With those now gone, Howard was left with the lead on an issue where there was no debate. The first ever interest rate rise in the middle of an election campaign highlighted the lack of control governments now had on the economy and Rudd’s ability to get the Labor party to applaud (maybe not that enthusiastically) fiscal restraint showed that there was no barrier nowadays to Labor under-spending the Liberals. Both of these exposed that nowadays, the virtue of economic management means little.

Howard’s exposure would be complete if Labor hadn’t portrayed him as the great IR reformer, but then Rudd had two campaigns to run this year, one against Howard and the other to rally a party whose historical role is over but is still in the process of reorganising itself around that fact. Despite that, there seems little reason now, with a well aimed campaign, why Rudd can’t extend Labor’s lead in the last week and turn a victory into a rout.

Posted by The Piping Shrike on Friday, 16 November 2007.

Filed under State of the parties

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