The script for John Howard and Peter Costello is not straight out of Samuel Beckett. The trouble with Godot was that he never turned up and neither did something else.
The somewhat forlorn Coalition characters in today’s political drama spent plenty of time before setting 24 November as the date for the final scene. Australia’s political Estragon and Vladimir were hoping that, by waiting, something good would arrive. Instead they were today given an interest rate rise, the sixth since the election of 2004, which leaves them looking somewhat tragic figures as they proclaim their great skills as economic managers.
Treasurer Costello was surely stunned by the Reserve Bank announcement of a 0.25 percentage point increase. The ABC morning show presenter Jon Faine gave us proof of that just after the announcement. A couple of months ago, said Faine, he asked Mr Costello why the Coalition had not called an early election to get the campaign out of the way before the Reserve Bank decision. Mr Costello’s answer surprised him. “He looked me in the eye … and said ‘there will not be a rate rise in November, take it from me’,” Faine said. “I said, ‘You might be right, you might be wrong, but you’re prepared to punt on it?’ And he said, ‘there will not be a rate rise in November’. Wrong, wrong, wrong.”
Very wrong indeed. Try now as they might, Messrs Howard and Costello, having taken the credit for reducing interest rates in their early years in office, will not persuade those with mortgages that they are not in any way responsible for what has happened during the last four years. The best they could come up with this morning is that their brand of industrial relations policy will ensure that wages are kept lower than would be the case under Labor. Not only will the banks now take more out of your pocket but a Coalition Government will limit the amount your employer has to put in it.
The hip pocket nerve of those in marginal outer suburban mortgage belt electorates have never been as tested this much before. The politics of punishment will be stirred as Labor unveils its version of a memories advertisement to remind the people of the Government promise before the last election to keep interest rates at record lows.
With no appearance yet of a surprise development to enhance their fortunes and time running out for something good to turn up, Team Howard is being forced to try and make the best it can out of a claim that the experience and wisdom which created the conditions for rising interest rates is best suited to stopping them going even higher. These are dangerous economic times and people should stick with the tried and true.
This approach, many pundits are suggesting, is what worked for Bob Hawke and Paul Keating in an earlier day and age when economic conditions really were tough and John Howard was the Leader of the Opposition.
I doubt that there is any parallel. Most importantly, Paul Keating as Treasurer had not spent years telling people how grateful they should be to him for so brilliantly delivering such good times. He was the man who boldly told us his recession was the one we had to have and that Australia was in danger of becoming a banana republic if we did not take his tough economic medicine. Paul Keating, whatever else, was the great economic teacher to the electorate.
The Howard/Costello message until recent days has been one of self congratulation. The about turn in rhetoric from good times to hard times is most unlikely to work.