As Albanese rejoins the campaign trail, so do interest rates for the first time in about 15 years

Home Politics As Albanese rejoins the campaign trail, so do interest rates for the first time in about 15 years
As Albanese rejoins the campaign trail, so do interest rates for the first time in about 15 years

Welcome to the end of Week Three, everyone, and it’s a big hello to Interest Rates — joining us on the campaign trail as a key issue for the first time in about 15 years.

Given the long hiatus, it’s worth a quick recap of the rules of thumb that traditionally accompany politicians’ assessment of their own ability to influence complex matters like inflation and interest rate increases, by playing a little game I like to call: “Is this debacle my fault?”

When interest rates are low, prime ministers and treasurers are often passionately struck by the extent to which this outcome is driven by their own expert handling of the complex high-performance motor vehicle that is the Australian economy.

When interest rates were last an election issue, the Howard Government went to great lengths to remind voters that excessive government spending (such as that habitually indulged in by Labor governments, the listener was invited to infer) caused inflation to rise and thus generated higher interest rates.

An orgiastic, Salem-style hysteria about inflationary government spending gathered pace — which oddly enough didn’t apply to things like the Superannuation Guarantee, the Baby Bonus or the private health insurance rebate, in which public resources were directed towards people who strictly speaking didn’t need them.

It’s why, in 2004, poor old Mark Latham had to sign a ridiculous giant cardboard pledge to “guarantee” that he’d keep interest rates low.

So richly fetishised was the causal relationship between fiscal settings and interest rates at the time that the idea they could be affected by signing a big sheet of cardboard wasn’t even the silliest notion in the room. Good times!

A quite different approach

How things have changed, though.

When pressed to explain this week’s sickening inflation spike, the Treasurer didn’t even rhetorically ask himself if it was anything to do with the jumbo super-soaker of stimulatory spending that’s been trained on the Australian economy since the nation first noticed a loss of taste and smell.

He opted, instead, for What You Say When Things Are Bad — which is, essentially, that it’s beyond our control. Russia, the pandemic, freighters getting jammed in the Suez, that sort of thing.

Scott Morrison holds a glass of whisky during a visit to a distillery.
Scott Morrison popped by a whisky distillery in Tasmania, amid continuing discussion about cost of living pressure. (AAP: Mick Tsikas)

Now, this is a cheeky generalisation to throw over absolutely all the inflation drivers. The 5.7 per cent increase to the cost of new-build homes is surely a leeeetle bit related to the fact that the government keeps chucking money at this already-quite-toasty sector. And it would take a superhuman act of grace to conclude that the 6.3 per cent hike in university fees is unrelated to the government’s decision to, er, increase them.

But yes, it does in this instance seem fair to conclude that the major drivers — supply issues, fuel costs — are attributable to factors beyond the government’s powers.

Anthony Albanese and a blonde woman wearing a blue top and skirt walk beside an air force plane.
Anthony Albanese busted out of COVID isolation on Friday, and jumped straight on a plane to Perth. (AAP: Steven Siewert)

Which leads to a rather fascinating conundrum. The government’s argument this week is on one hand, essentially, that the inflation crisis could have happened to any old numpty, but on the other, that it’s absolutely critical for the nation’s future that we should not switch to a new numpty.

Here’s David Speers kicking the inflation footy around a little. The Insiders host is uniquely qualified to comment, having inflated the length of his program by a shocking 50 per cent for the campaign. This Sunday, the guests are Finance Minister Simon Birmingham and Greens Leader Adam Bandt.

National security sticking around

National security is another notorious hot zone for “trust me, it’d be worse under the other lot”. And the government continues to contend that the unfortunate developments in Solomon Islands are unrelated to its natural policy supremacy in this field.

Solomons PM Manasseh Sogavare has gone (and I use the diplomatese here, advisedly) absolutely spare in his Parliament.

It’s also been revealed why Australia’s High Commissioner to the country was out of action at the crucial moment — an ill-timed back injury.

Good day

Labor leader Anthony Albanese was released from close Cavoodle supervision in Marrickville on Friday, having completed his seven-day COVID isolation.

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Mr Albanese says Labor is best placed to deal with the cost of living

The resilient Australian electorate braced resiliently for more Albanese press conferences. But what? There wasn’t one! Smiles all round, as the Labor leader jets straight to Perth for Sunday’s Labor campaign launch.

Bad day

Deputy Labor leader Richard Marles, however, won’t be at the launch because it’s his turn to surrender to the spicy cough.

Also having a suboptimal day on Friday was Clive Palmer’s candidate for the federal seat of Higgins, Ingram Spencer, who has been arrested for using a carriage service to menace or harass.

Keywords include “aggressive behaviour” and “Russian propaganda”.

As a general, but entirely unrelated, principle: Don’t buy an alpaca online.

What to watch out for on Saturday

On Saturday we’ll see both leaders on the hustings for the first time in a week. Hurrah! 

After some morning interviews, Albanese spent the bulk of Friday getting to Perth, so Saturday will give him his first day back on the campaign proper.

Morrison will start the morning in northern Tasmania, as he seeks to sandbag two seats in the north. He’s hoping the extra time he’s spending in Tasmania will help in his efforts to win the Labor-held seat of Lyons in the state’s centre.

Catch up on today’s stories

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Play Video. Duration: 2 minutes 54 seconds

Inflation figures force parties to outline their plan to reduce the cost of living.

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