Back before the interest rate rise, before the September CPI data was released, one might remember the usual talking heads regaling us with tales of how the RBA decision was extremely important for the government. A decision to keep rates at 6.5%, so the theory went, would benefit the Coalition by reinforcing the credibility of their low interest rate spiel. It was all about ‘economic management’.
Yet after the RBA so inconveniently pulled the trigger, these same talking heads are now regaling us with tales of how the rate rise actually helps the Coalition because it shifts voter focus back to the economy. It’s all about “economic management”.
T’was quite the argument – the Coalition was always going to benefit, the only trick is to adjust the mechanism, apparently on demand. Maybe this explains why the government hasn’t won a poll in 18 months; they’ve been listening to these guys.
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The key to understanding the way “the economy” seems to be working as an issue in this election is to not to fall into the trap of seeing it as a single holistic thing. Most punters aren’t economists, the broader notion of the economy is an abstract concept and on this hazy issue the Coalition rates well. There are jobs around, things keep moving forward, government debt is down, the sharemarket hasn’t crashed – it’s the economy.
But this abstract notion is also what gets measured by polling questions like the Newspoll survey on “which leader is best capable of managing the economy”. It’s why the results of these questions have little statistical relationship to vote estimates.
At the interface of the abstract and daily life, the story is vastly different. Interest rate rises reduce the household discretionary spending budget – the budget that funds self-perceived standards of living: the holiday, the recreation, the kids’ birthday presents etc. It does it simply by increasing mortgage payments (or rents) and reducing the amount households have left over for other things.
WorkChoices creates uncertainty for those not affected personally in a negative way by its operation but who believe they could be any time soon, and creates resentment and occasionally lower take home pay for those that have felt the rough end of the policy first hand.
If you throw rising grocery prices, petrol prices and childcare costs into the mix, you start to get a broad feel for the different kind of “economy” that people get cheesed off with Howard about, rightly or wrongly.
Many of these folks clearly answer the Newspoll questions on economic management in favour of Howard; to them he is good at looking after the abstract concept. But on the personal economy front their grievance is washed into the large mix of issues that makes up Howard’s dissatisfaction ratings – and as we’ve seen before, so goes Howard dissatisfaction, so goes the Coalition’s two party preferred vote.
So when the talking heads pop up and start spruiking how the focus on the economy will be a benefit for the Coalition – that may well be the case were the focus actually on abstract notions of the economy, but interest rate rises seem to be only barely related to the economy in the punter’s mind if you look at the polling data and how it relates to the actual vote estimates.
We know that interest rate rises increase the ALP vote; we know that there is no statistical relationship between the Coalition vote and the Newspoll results on the “better economic management” question. What we don’t know is exactly how the personal economy plays out in its relationship to the major party votes.
To the pollsters, we need a new question on economic management that encapsulates the lived “economy”, that captures the way the economy actually plays out in people’s daily lives and which party the punters believe are best capable of handling the things that make the lived experience.
Until we get a measure like that, we’ll have to put up with talking heads spouting vast quantities of absolute nonsense over the economic management polling results.
Please pollsters, have mercy on our souls – give us something so we can take that lame horse out the back and shoot it.