John Howard didn’t look at all happy tonight. He’d been wedged. He’s a clever politician, that Kevin Rudd.
Howard, far from pulling rabbits from a hat, is actually very predictable. Even the cynical press gallery, I think, were shocked by the extent of Monday’s spendathon, but his past form should have meant that it could have been picked a mile off. While there are some who correctly point out that the difference between Labor’s spend and the Coalition is a drop in the ocean when considering commonwealth outlays over the next four years (which appears to be the time frame everyone is using in announcements), that’s to miss the point that the razor gang promise is serious, and Rudd made a downpayment on that tonight by cutting existing programmes to fund the technical training plan. There’s also some truth in the Labor claim that such initiatives build capacity, but the bigger picture is, as Peter Martin eloquently puts it, that Labor have now demonstrated an understanding of the need for fiscal restraint.
There’s a bit of symbolism about it, but it does suggest that when Ken Henry knocks on Wayne Swan’s door in the event of a Labor victory, there won’t be any surprises. In fact, that shouldn’t be a surprise as Swan has been very careful to note on several occasions the respect he has for Henry – and that is also an important pointer – not least to the fact that Labor understand that there’s no future in inflationary spending which the Reserve will quickly claw back until the message finally gets through.
When the story of the campaign is written, it wouldn’t surprise me at all if the “me too-ism” turned out to be a deliberate tactic to trap Howard into spending like a drunken sailor, and Rudd’s call – “stop, enough!” had already been scripted. Howard’s fallen into a hole he dug himself, as any further attempt to go with his instincts and spend his way out of electoral oblivion reinforces the interest rates/inflation message and shreds his own economic credibility while changing tack accepts the validity of Labor’s critique.
It also wasn’t a good look that when some astute beancounters noticed that Howard was close to spending more than would ensure the fetishised 1% of GDP surplus was maintained, he resorted to telling the Fin that Treasury forecasts were usually wrong and he anticipated bigger revenues. This makes him look reckless, or complacent, rather than responsible.
And Peter Costello, who also must have seen all this coming, undermined the “repealing WorkChoices will see the end of the world arrive” narrative by boasting today that wages were growing under the Coalition. It just doesn’t make sense, and there’s enough evidence around that voters understand the connection between reckless spending and interest rate rises to make this particular convoluted argument (whose premises in any case are entirely false) a bit too much to swallow.
We live in interesting times. But, fortunately, good times for those who genuinely are concerned to see something done about the cost pressures on working women and men of Australia. (Oh, and their families…)
Cross-posted at PollieGraph.