Interest rates and the vote

Those commenters stressing that interest rates could be a signifcant factor in the election, even if most people don’t think the government is to blame for them, get a boost from polling reported in this morning’s Sunday Age.

In a Taverner Poll of Victoria and NSW, 21% of those polled blamed the government for the increases in interest rates. That’s a lot more than the 12% blaming John Howard in a Galaxy Poll earlier this month. Is that because there has been an increase since, opinion is different in NSW and Victoria, or the question wording affected the result? Unfortunately, The Sunday Age has kept up with its very poor opinion poll practices, and published nothing about question wording or sample size.

But some evidence for the vote-changing case:

The latest Sunday Age/Taverner Research poll shows that 57% of the key mortgage-holder demographic will be voting for Labor, compared with only 43% for the Coalition.

This is a complete reversal of the 2004 campaign, when a Taverner poll conducted then showed the Coalition enjoying an 8-point margin over Labor among mortgage holders.

Of course there are factors other than interest rates likely to be influencing this group, but they seem to be swinging a lot more heavily against the Coalition than other groups. Along with the apparent statistical relationship between interest rate rises and Labor support, this is looking like a cause of the imminent Ruddslide.

The interesting issue now, from a public opinion perspective, is to what extent this will flip after a change in government, given that interest rates are likely to increase again regardless of who wins. Neither Howard nor Rudd will in any meaningful sense be to blame for that (a strong economy is a pretty good problem to have), but perhaps this group will lash out at whoever seems to be in charge at the time. While Howard foolishly gave the impression in 2004 that interest rates would stay low, Rudd is creating expectations he cannot meet across a wide range of areas. Whatever’s left of the Liberal Party will be able to make good use of voter disappointment in 2010.

2 thoughts on “Interest rates and the vote

  1. “Whatever’s left of the Liberal Party’. Nice choice of words. Are you going to chance your arm at predicting Saturday’s outcome? Or, be like the rest of us and, wait till the result is known before contemplating the Liberal Party’s future.


  2. Johno – I think the party of government for 2008 and beyond has been predictable for a long time, the ALP, but which Liberal MPs survive will affect my analysis of the Liberal Party’s medium term future. While I think the party has serious long-term problems in shifting demographics, and has the issue cycle running against it, factors like personalities do matter. An opposition without Malcolm Turnbull would be very different to one with him, for example.


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