Evidence this morning adding to what we already have that the economy is neither the electoral asset nor the electoral liability it once was, and that interest rates are not a major political issue.
A Galaxy Poll reported in the News Ltd tabloids asked
If interest rates rise again in the near future, which of the following do you believe is mainly to blame?
The political answer, John Howard, received blame from only 12% of respondents – 17% of Labor voters and 3% of Coalition voters. The other responses were ‘international factors’ (37%), the Australian economy (30%), and the Reserve Bank (14%).
Andrew Norton 
I especially like the last answer:)
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Governments are never responsible for interest rate rises.
Governments are always responsible when they come down.
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I suspect you are clutching at straws here Andrew. The Question seems to be “mainly to blame” Of course a thoughtful respondent would think of international factors such as oil prices as well as drought impacting on fruit and veg. This says very little about their thoughts on lesser but still important factors, such as their polititions.
The very fact that I hear people repeating the figure of 5 increases means that rate rises resonate with some in the community.
Even if a rise only swings another 1% , or firms up some soft ALP voters, it could represent quite a few seats.
Regards Gerald
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Gerald – I’m not saying it has no effect. All the polling I have reported suggests that some people might react politically. My underlying interests here are in how people understand the economy, and how much credit or blame they give the government for economic outcomes. The trend data I have reported in previous posts suggests that there is a declining belief in the influence of government. This latest Galaxy poll is consistent with that.
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Isn’t the line “an extra $200 a month” a mirage anyway?
Voters don’t notice that money out of their wallets because their monthly repayments are not higher, it just adds interest to their loan, but the monthly repayments stay the same, don’t they?
If isn’t impacting their wallets directly, I really don’t think its going to have any affect.
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Stephen – Repayments do go up, though last time mine did I received a letter which invited me to discuss it with the bank if I could not afford it, which I presume meant things like lengthening the loan. I did not read it very carefully though; like most people with mortgages I borrowed knowing that rates would rise and can absorb the added expense.
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well there is a correlation between rate rises and the ALP’s primary vote but why bring empirical evidence into this?
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Andrew, I am catching up with all the blogs after a three week stint away from my computer. On this particular topic, I have three comments.
First, the Government, through its fiscal stance (cyclical and structural) and through its industrial relations stance, has a much bigger impact on the broader economic climate for interest rates than people seem to believe (see my most recent posting on Club Troppo). On this aspect, the Coalition and labor can each score points.
Secondly, as Gerald points out, even if people attribute “some” blame to Governments, it could be potentially significant. But this could be offset by the refocusing of voters on the economy – and if the current financial market turbulence, and especially the decline in the US dollar, gets worse, it could play right into Costello’s hands.
Thirdly, and without negating my first point, the real political sleeper is trust. Will the people remember the firm promise of Howard (and Liberal Party) to keep interest rates at record low levels – a promise he should never have made! Coupled with the way the Coalition sprung WorkChoices on the people without warning, could some swinging voters lose faith in Howard’s credibility and honesty? This is a more relevant and potent issue than whether people mainly blame the Government for recent interest rate rises.
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Fred (and everyone else making similar points) – I have never said that interest rates have no impact, just that this issue is perhaps not as important as the political class thinks (or at least seems to think, considering the space it is given). It’s also very unfortunate that low interest rates have become a proxy for good economic management, because interest rates tend to run counter to more important indicators such as growth and unemployment.
While again not ruling it out as a factor, I am a little sceptical of the trust apsect. Howard’s Newpoll trustworthy rating is the same now as it was before the 2004 election. It’s 15 percentage points above the Coalition primary.
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Andrew, on the issue of trust, recent online opinion polling (post interest rate rise) indicates that more than 2/3 believe “Howard cannot ever be taken seriously on the matter of trust”. See http://www.opinion.com.au.
I don’t know if these online polls are worth a cracker but I suspect that even Newspoll may show a drift away from trust in Howard since the interest rate rise and the revelation of what he personally said (in addition to the infamous Liberal Party ads).
I don’t want to overstate this factor as Australians are very cynical about their politicians and Rudd himself has not captured the full trust of the people either. But, other things being equal (which they seldom are), dwindling trust in Howard could be significant in one or two marginal seats. You don’t deny this of course. So we are not that far apart. It may not be decisive. (I am still putting my money on a narrow Howard win).
There is another aspect of trust that is in my view very important. It is the concentration and abuse of incumbency power. Coming soon after the misuse of government advertising, we now learn that the Government used government departments to identify the differential spending and programs in different electorates and this information is being exclusively used by the Government to boost individual members in marginal seats (a big issue in the Canberra Times in the last two or three days).
I doubt that many Australians worry about such issues but those who read the Democratic Audit of Australia (DAS) website, which has listed a number of very disturbing abuses of power, do care. Serious readers of DAS want to “clean out the stable” after eleven years of the same Ministerial faces. And the same applies to State Labor governments.
By the way Andrew, my comments were not meant as a criticism of your posting. I doubt there is anyone else in Australia with a better grasp of opinion polls than you. It was meant more as a supplementary comment.
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Fred – I think the public generally know how to read what politicians say and do. On the basic question of whether politicians will do specific things that they say they will do they are generally quite believable. I think you will find that the overwhelming majority of specific actions promised in elections occur. Where things fall apart is meeting general goals (low interest rates, better education) where governments run up against serious capacity and competence constraints. As I have said several times, this is think is the key mistake in the Rudd campaign, that he is raising expectations that he would like to keep but in all probability cannot.
I think the public would also be less than surprised that marginal seats get the goodies. It is a blatant process every election. BTW, both the Parliamentary Library and the Departments routinely provide information on what is going in in particular seats. The Opposition regularly puts in Questions on Notice and gets information on electorate-level activities.
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Andrew, much of the abuse of incumbency power by Howard – and it is abuse whichever way you look at it – is also evident at state government levels. But
(a) The Democratic of Australia is particularly scathing of the Howard regime and today’s CT editorial suggests that public servants have become much too politicised and should not have agreed to supply the information on spending in electorates as it was for blatant partisan purposes. The CT has been unsuccessful in getting hold of this information under FOI (another area of abuse).
(b) One of the few policies Rudd has promised that is not “me too” is on governance processes – better auditing of advertising, 5 year contracts for departmental secretaries with less focus on performance pay, promise of no immediate sackings (Howard sacked six when he took office), more arms-length appointments to key agencies, tighter disclosure rules on financial donations to political parties and so on. Rudd should have gone much further but it’s a start – assuming he keeps his word!
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Fred – I strongly disagree with aspects of the public service reform mentioned here. The Departments are not independent agencies. They are there to implement legally authorised policy and to provide advice to government. Their success or failure in this is a vital part in the success or failure of the government. Ministers should be able to remove senior public servants who are not performing – if Rudd feels that some existing Secretaries will not be able to meet his goals he should remove them.
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The public service exists to implement the policies of the elected government. I have never understood this business about “fearless advice”. In this regard the Americans have the correct approach – the incoming President brings in all his own people. To be sure, it doesn’t always work well, but there is no buck-shifting.
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I agree with you sinc.
You hire your own people when you get to run the executive. Fire the one’s you don’t want and start again.
Keeping the way it is in Oz has simply ensured we perpetuate a left of centre Public service.
I would go one step further, seeing you have control of the ABC, you ought to be able fire the former Whitlam and hawke staffers like Kerry O’btien and Tony Jones to allow your own stafferes a chance to shine in the public light anmd use the airwaves to get your message across. 🙂
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“You hire your own people when you get to run the executive. Fire the one’s you don’t want and start again.”
JC, I’ve got good news and bad news for you and Sinc.
First, the good news.
In two weeks time, quite a lot of senior public servants are going to get the Bulli Pass.
Now, the bad news (from your point of view).
They are all going to be right wingers – the people who gave us WorkChoices, children overboard and so on.
Maybe you can get them jobs at your places of work. I’m sure they would be ever so grateful.
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In my own experience with the federal bureaucracy their private political views were not a major issue. They acted in a professional manner. A Ministerial right to hire and fire is more about getting the best staff for the task at hand rather than those with the correct ideology.
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“A Ministerial right to hire and fire is more about getting the best staff for the task at hand rather than those with the correct ideology.”
That’s very funny Andrew. I suppose that explains all the firings of departmental heads by John Howard when he first came to power, including one for supposedly being in cahoots with Ros Kelly over the so called whiteboard affair, and it wasn’t even him who did it!
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Spiros – are you suggesting there are right-wingers in our government and/or public service? Name them.
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Sinclair, no names, no pack drill.
Watch out for who keeps and who loses their jobs after the election. That will give you a fair idea, though the correlation won’t be perfect.
If you are desperate to know in the next two weeks, do some googling.
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Spiros – Most secretaries kept their jobs, even those with Labor connections. Steve Sedgwick, secretary of DETYA (now DEST) when I was a Ministerial adviser, was a former Hawke staffer.
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More seriously – it doesn’t worry me that alleged right-wingers in the public service will lose their jobs in the event of a change in government. If the ALP win the election they should be able to employ whomever they please. What I said above applies to both the Coalition and the ALP. The government of the day should be able to bring in their own people.
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from his own mouth JC. C stands for Chavez.
You really cannot tell the difference
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Sedwick was the exception that proved the rule. He was an economic rationalist’s economic rationalist and he didn’t last long anyway. He was probably too much of an economic rationalist for the big spending Howard.
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Spiros
Why is it bad news that the party likely to win government wants to hire ts own? I’m indifferent. The conservatives lose? Bad luck, there go the spoils of office.
In any event , what conservative would want to be near this train crash?
Homer:
Whatever it is you’re taking isn’t working you’re still delusional.
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Spiros – Sedgwick lasted nearly 6 years in two portfolios, and then went on to another government appointment overseas. Ken Henry worked for Keating as an adviser but was appointed Treasury secretary in 2001. There are probably more.
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OK, I am wrong about Sedgwick, but you know that they sacked plenty, including one by reason of mistaken identity.
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I know some were moved on, but I can’t immediately recall any of them or why in particular. I have only two points here; 1) The governments have a right to choose senior public servants; and 2) That in practice some association with the other side of politics is not fatal; Ministers know that many if not most public servants are capable of acting in a professional manner regardless of their personal political preferences. That’s why Rudd is not planning to immediately move on Liberal appointees.
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I’d like to harden my position a bit actually. After a change in government, the incoming government should change over the top staff, afterall the electorate have voted for a change and the incoming government should deliver that change.
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“I’d like to harden my position a bit actually.”
Then you should lobby John Howard to provide tax breaks for Viagara.
“That’s why Rudd is not planning to immediately move on Liberal appointees.”
Wanna bet?
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When I’m older, perhaps. 🙂 I’d prefer to shut down the PBS though.
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“I’d prefer to shut down the PBS though.”
That’s just a right winger’s wet dream.
Or is it right wing porn?
“Ohhh, cut that program again! More! Don’t stop!
“Say my name!”
“Hayek”
“Say it again!”
“Hayek, Hayek, Hayek!!”
Fade to black.
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LoL. That’s very funny.
Been tortured by Hayek. Hmm, no wonder Andrew’s blog gets filtered …
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