Gosh it’s hard to keep up. Kevin Rudd is responsible for us surviving the worst of the Global Financial Crisis, but not responsible for the massive government debt we’ve racked up in the battle.
The Rudd government is close enough to China to get the $50 billion Gorgon Gas deal through, but not close enough to get Stern Hu an appointment with a lawyer.
What’s next - John Howard was responsible for interest rates going up, but Kevin Rudd was only responsible for interest rates coming down? What about when they go back up again?
(The Punch team will be discussing this and other issues with Federal Minister Anthony Albanese on Punch TV at 12.30pm today on Sky News).
This week in Parliament, and outside it too, saw a significant, if somewhat schizophrenic change in the Government’s rhetoric on the economy.
With some signs of good news Mr Rudd and his advisors clearly decided if they were going to fight the next election on their fiscal record, they’d better start fighting it now.
All of a sudden the Government switched from pitching itself as a scrappy little band of Davids trying to fend off Global Goliath to jumping up and down proclaiming We Slayed the Dragon!
Question Time every day this week has been dominated by the economy, especially Tuesday and Wednesday, after Mr Rudd made a Monday night speech proclaiming his stimulus packages were responsible for the Australian economy failing to fall into two consecutive quarters of negative economic growth.
“If the Federal Opposition had had their way, and we had not delivered short-term stimulus, Australia would have joined much of the rest of the world in recession,” Mr Rudd told the Australian Industry Group.
Whether or not this claim is legitimate has been debated all week. Regardless, the Government appears determined to fight the Coalition on their home turf, economic management, and in doing so are displaying more front than Harrods.
Here’s why. In the 2007 election campaign Kevin Rudd pitched himself as an economic conservative, who was generally in favour of government surpluses and sensible spending and, amazingly enough, in possession of some magical powers that would allow him to keep grocery and petrol prices low.
In the same campaign Mr Howard found the very thing that had helped him get re-elected in 2004 had come back to savagely bite him in 2007 - interest rates.
In the 2004 campaign you couldn’t move three feet without hearing Mr Howard or Peter Costello asking “who can you trust on interest rates?”. A lot of us bought it, and a whole heap of other stuff on our credit cards. By August 2007, three months before the last election, the ninth rate rise since 2002 prompted this front page in the Daily Telegraph.
The who do you trust line had worn out. Which makes the timing of Rudd’s new strategy interesting, if not puzzling. Just last Friday Reserve Bank chief Glenn Stevens told the House of Representatives standing committee on economics homeowners should brace themselves for interest rates rises by Christmas, heading upwards by as much as 2 per centage points.
Considering Rudd and Wayne Swan already carry the distinction of failing to prevent the big four’s pre-GFC decision to completely ignore the RBA and put rates up independently, a sudden and significant rise in rates before the next election could be very painful politically.
Deputy Prime Minister Julia Gillard told the Herald on Monday the Australian people would be more forgiving on this point than they were for Howard because of the GFC. You’ve got to wonder if her optimism extends to voters’ attitude to Government Debt.
While rates did eventually go up under Howard/Costello, they continued to run surpluses and pay off debt to the point where for each and every Australian we were in the black to the tune of $110. According to the 09/10 Budget papers, by 2012/13, each Australian’s share of Government Debt will be $8308.
But the finely tuned message makers in Rudd’s office have set their sights on Malcolm Turnbull and now the Government line is he’s the irresponsible one for opposing the second stimulus package. It’s a bold move, as is taking credit for the Gorgon gas deal, which has been in negotiation for a lot longer than the Rudd Government has been in existence.
Rudd has long claimed the Howard/Costello years were so prosperous because of the “mining boom of the past” (it’s all laid in that July 25 opus that ran in the Fairfax papers with the world’s biggest picture by-line).
What’s he going to say if we have a gas-led recovery? And what’s he going to say if the RBA decides to wipe out every last dollar of the stimulus spending with rate rises before the next election.
I’ve been trying to get anyone to take a bet there won’t be a Federal poll before the second half of next year, but this week has made me start to wonder.
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