Flailing around on interest rates

Tuesday, 6 November 2007 

Two thirds of those surveyed in the latest Galaxy poll think interest rates are caused by the economy either here or overseas.

Only 12% think it is Howard’s fault and 14% the Reserve Bank’s. That is, only a quarter of voters think this week’s potential interest rate rise is anybody’s fault, and less than half of that a politician’s. This is the background that will determine the rate rise’s direct political impact i.e. not much. However, it is a background that the media is largely ignoring as it continues to get excited about the coming Reserve Bank decision.

Part of the reason is that the media is playing catch up to the resilience of Labor’s lead after a year of denial because of the strong economy. Yet it also shows just how much has changed since 2004. It is not that the economic debate has changed that much since then. The interest rate debate was not an economic one in 2004, it was about trust in Labor mainly on its position on Iraq and the War on Terror. Now Howard is struggling to find an issue that makes him a conviction politician which is why has been flip-flopping around on the economy, denying he has control over interest rates while promising he has enough to keep them lower than Labor and now suddenly talking up economic threats where none exists.

For its part, it is a sign of Labor’s flabby campaign at the moment that their message keeps wandering around. Because the issue in 2004 was not about interest rate policy but national security, there is not much point making a big deal about Howard breaking his promise to keep rates low. Again, because people don’t think there is really any economic debate these days, there is little point blaming Howard’s economic policy. Those 12% who think governments can make a difference to the economy are probably small business owners in the marginals that everyone thinks are swinging but are probably Howard’s biggest supporters and will look to him for security if rates rise again. There is only one response for Labor, be better than the Liberals at feeling the pain. This was something Rudd was getting good at this year, before the campaign started and the Labor strategy started to become more focussed on winning the last election rather than this one.

Posted by The Piping Shrike on Tuesday, 6 November 2007.

Filed under Tactics

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