The newspapers are all in agreement: another rate rise will be politically disastrous for the PM. But what are the real experts saying?
Can Howard survive another rate rise? Over to you, Crikey Cabbie Panel.
David Bradley, Sydney: No he can’t. Anyone who’s trying to pay the bills has a long memory. Every time I look at the money coming out of the bank account every month I’m reminded that this is the guy who told me rates wouldn’t go up. Even if it’s just $20-$30 a month that makes a difference. If it happens again, I can’t believe people would forgive him. Nor should they. Taxi drivers can be sure their business will go down for a few days. The first thing that happens with a rate rise is that people start tightening their belts. I’ve been in the game for 20 years now and you can expect business to drop for a week or 10 days. In any other job that’s equivalent to a pay cut. So when the man who claims to be sensitive to small business is in charge at the time when things like that happen it’s hard to feel too much compassion or empathy for him.
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Bruce Tootell, Melbourne. He’s in trouble because people don’t understand how interest rates work. People know that when interest rates rise it means they pay more, but what causes it? Inflation, and inflation is caused by people having money and spending. So interest rate rises are a way of saying we’re going well, but people don’t see it that way, and because the man who won’t buff [ie, John Howard, who won’t polish his policies to better sell them to the public] won’t tell them. I don’t think he can survive another rate rise. Howard has needed to be a fraction more innovative over the last five years.
Ross Nelson, Sydney: I don’t think he can survive anything, and another rate rise is just another nail in his coffin. I think he’s a goner even before another rate rise because people are sick of hearing how well Australia is going and yet they are still struggling from bill to bill to get by. They’re no better off even though we’re supposedly living in boom times.
Alex Hryciw, Adelaide. It’s hard to say. There’s nothing historical for us to go on because the Reserve Bank has always waited to raise rates until after the election. Now it’s a different ball game. The feeling I get from a lot of these oldies is, “When you’ve got someone who’s been in there, why bring in an L-plate?” If you bring in a learner you’ve got to start the ball game all over again. He might be lucky enough and wear another rate rise and get through it. Two or three months ago Howard was out, but now that the election’s been called and he’s making all these promises, I think you’ll find that all these oldies, to whom he’s promising the world, are going to fall for the trap and he’s going to get back in.