The Prime Minister seems eager to put this week’s polling to one side, polling that shows his personal popularity slipping from the giddy heights of near space to the comparative lows of the stratosphere. Not much to worry about there, but even so he feels it necessary to continue the ramped rhetoric of grim times and tough policy responses, a tone that suits his current political needs.

The reality, if you believe the board of the Reserve Bank, is far brighter than the Government at times finds it convenient to have us believe. According to the latest RBA board minutes, released this morning, members were moved to observe that, “In the case of the Australian economy … there were signs that the economic stimulus that had been applied was supporting demand.” Huzzah! And, “Overall, the Australian economy was likely to record better outcomes than most other advanced economies in 2009 and 2010, reflecting the healthy state of the domestic banking system and effectiveness of the macroeconomic policy stimulus to date.”

There seems to be some sort of gulf developing here between the reality observed by politicians — grim, and the emerging recovery sensed by the increasingly bullish RBA and Treasury. Both bodies are presumably well beyond political influence, but to the extent that the assumptions of last week’s budget are based on their shared hopes of rapid and hearty recovery, let’s hope they are right. There would be nothing like economic growth for correcting Mr Rudd’s temporary popularity deficit.

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Peter Fray
Peter Fray
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