12/04/2005 - 22:00

As political theatre this doesn’t rate

12/04/2005 - 22:00


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Not surprisingly, I have been fascinated by politics this past week or so. But not in an admiring way, more in that stunned, what-are-they-going-on-about way, when you shake your head and wonder if there isn’t something better they might all be doing.

Not surprisingly, I have been fascinated by politics this past week or so. But not in an admiring way, more in that stunned, what-are-they-going-on-about way, when you shake your head and wonder if there isn’t something better they might all be doing.

This time my subject is federal politics – supposedly the arena of choice for grown-up politicians.

The current fracas about interest rates is what has been distracting everyone from getting on with what they are meant to be doing.

For those who have been out of the country in recent weeks or, understandably, have switched off of late, newspapers and the broadcast media have devoted significant amounts of time and space to the prospect of an interest rate rise (which didn’t happen last week).

The reason interest rates are political – even though they are set by an independent body – is because John Howard’s re-election campaign focused on this subject at a time when many voters are overstretched on their mortgages and fearful of a rate rise.

Perhaps I read the fine print better than most, but I clearly recall the Howard campaign stressing that conservative governments had a better track record for keeping interest rates low than Labor.

Mr Howard pretty much laboured this point for the whole campaign, simply reminding voters that conservatives in power tend to manage the economy better.

From what I recall, Mr Howard never made a promise that interest rates wouldn’t rise, just that his government was more likely to keep them low than Mark Latham’s Labor Party.

It was really up to the voters to choose if they believed this or not, and they did – overwhelmingly.

Labor had three years to think up their own campaign, and weeks to come up with an answer to Mr Howard’s claim when it became clear that was the central plank of Liberal’s re-election strategy.

Perhaps the link between Mr Latham and Australia’s most economically challenged prime minister, Gough Whitlam, was highlighted by focusing on interest rates.

The Labor Party failed to answer this challenge, and it lost.

Or, to borrow a line from WA Labor secretary Bill Johnston’s letter on this page, the Liberals won and that should be acknowledged.

Instead we have a campaign

of Orwellian-style retrospectivity, where the Government is being accused of promising to keep interest rates as they were. No government can do that without ending the independence of the Reserve Bank of Australia, and would certainly never promise to do so.

Just as every election contains its policies about health or crime, no would-be premier or prime minister promises to stop people getting sick or to make criminals vanish. They simply put up an argument that things will be better under their leadership and the people judge who they believe most.

Why on earth we are arguing about this six months after an election beats me.

Yes, interest rates have gone up, but barely and only from historic lows in the Australian context.

Unbelievably, Labor has even started to question how low our rates are, pointing out that our interest rates are much higher than Japan’s. That’s true, but Japan has been through a long period of economic stagnation – a situation that is hardly desirable.

Perhaps all this posturing by Labor’s Kim Beazley is all about getting the record straight for the next election – especially if the Liberal’s next leader could be current Treasurer Peter Costello, whose credentials for leadership are very much focused on economic management.

That might be the case, but it’s lost me. The only record I hear sounds like a broken one as Labor barks on about something irretrievable, the election of 2004.

As someone who would obviously love to see a Western Australian do well and a bit of genuine policy debate (taxes, immigration and infrastructure are some worthy topics), I am swiftly losing patience with Mr Beazley’s tactics. Having said all that, I

am disappointed by the prime minister’s actions of recent days. Mr Howard has been too outspoken on the subject of interest rates and we’d all be fools if we didn’t think that sort of pressure doesn’t affect decisions, even of independent bodies like the RBA.

In this argument, Mr Howard has one fool-proof defence, the very independence of the RBA. If he gets drawn into playing politics with that, especially at a time when his leadership of the country is unquestioned, he risks looking as small as his opponents.

This is one he should just bat away and remain aloof, he doesn’t set interest rates in this country, he simply pulls some of the levers that dictate which way they will go.

Labor might be looking for another ‘children overboard’ scandal to bog this government down but this isn’t it.

Mr Howard should just keep working towards rolling out his agenda for the next short term of government and leave Labor where it is – sounding old, tired and devoid of policy as it shrieks about how unfair it was that people didn’t vote for it at the last election.

Building bridges

I recently attended a joint luncheon organised by the Royal Australian Institute of Architects, The Association of Consulting Engineers Australia, the Master Builders Association and the Property Council of Australia.

A panel session with some distinguished guests was asked whether we should still have foreign students coming here on scholarships like we had for decades under the Colombo Plan.

It was interesting to note that the academic on the panel, Laurie Hegvold, believed that the universities’ drive for foreign students was an extension of that idea.

For what its worth, I was heartened to see $100 million in scholarships being offered to Indonesian students as part of the earthquake relief.

Anything that improves our neighbours’ understanding of us – and vice versa – is a good thing.


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