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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

a new governance style « Previous | |Next »
February 7, 2008

The Rudd Government has got a few problems in terms of political governance that are of its own making. Consider Rudd's cut to spending programs so as to use a bigger budget surplus to help restrain the economy and diminish inflation pressure, thus reducing the need for further rises in interest rates.

This wouldn't be necessary if Rudd had not committed himself to big tax cuts in each of his next three budgets. So Rudd is busy boosting demand with one hand while it seeks to restrain demand with the other.

economicmangement.jpg Allan Moir

Another example is the "education revolution" to put computers in schools, upskill disadvantaged student whilst retaining the Howard government's formula for grants to non-government schools that favours private schools. As Ross Gittens points out in the SMH in 1996 non-government schools got about $3.50 per student for each $1 per student going to government schools. By now the ratio has blown out to almost $5 per student.

| Posted by Gary Sauer-Thompson at 6:25 AM | | Comments (8)
Comments

Comments

Funny how when things arent going so well for the government the media always show footage of the pollies turning the wrong way down corridors or streets.
I guess the parties over now and Rudd and co and they must take responsibility for the econemy and not just the Department of Retoric.
Its a long time between now and the next election so perhaps saying no to the tax cuts would wash over in a few months. But the shop keepers wont like that. Boy its a hard one.

He's either going to have to live with the compromises he made to get elected, or squib on some of his promises.

Some of the tax cuts could go to super instead and some of the private school funding could go to scholarships r something, but that would be a whole other package he'd have to sell.

Maybe the thousand genius thinkers meeting can offer some suggestions? Then it could be their fault.

The contradictions are sharpening.They--the ALP-- are hoping to ride them out and that people don't notice.They'll notice because Rudd and Co promised to fix mortgage stress There is a perception that Rudd can fix it. Increased interest rates won't help the fixing business. Nor will blaming the Coalition for creating the stress in the first place.

The polls will be back in the news soon. Confidence in the governments ability to manage the economy may be low.

Lyn,
increased interest rates fall most heavily on those with high mortgages and lightly on those who own their own homes. Class sits behind that. As Dennis Shanahan says:

The blunt instrument of a rise in official interest rates leaves many of those fuelling demand - real estate investors, high-income earners in boom states, foreign investors, big spenders without a mortgage and those with rising real estate values - untouched while it hits the most vulnerable: low-income renters, those over-committed on credit, and home buyers whose house values have dropped below the mortgage....it is the lower-priced houses in Sydney’s west with buyers on lower incomes who are feeling the pinch and not those with ever-rising values in Sydney’s east.

Thso feeling the pinch are Howard's battlers who switched to becoming Rudd's friends. How long will the heavily committed home buyers remain Rudd's friends?

Les,
in the light of the above comments it depends how well Rudd + Co can fix things--lower prices, inflation and interest rates.

I see that Turnbull is saying that Rudd + Co will have to stop blaming the Coalition, take responsibility for running the economy and doing something to fix mortgage stress. That is what the public----those who supported them ---understands them to have promised, isn't it.

Nan,
They're also blaming the banks, which is another popular bugbear among people on lower incomes. I wouldn't be surprised if they start talking about investigating fees and charges.

Making it easier for people to transfer a loan from one bank to another also sounds good. Whether it actually is good is another thing, but it sounds as though it will be easier for people to get a bit of revenge on power other than the government. It's an Alan Jones type solution to a perception problem.

Peter,
Yes he is right to some extent. Now is the time for action or more so to be seen to be making the right decisions. Unfortunately the things that they will do will not show immediate results. Will the media sit on their hands and do dog stories till the good things happen? Not likely. Interest rates up, petrol up, housing up, credit card debt up, food bills up all are much better stories that will reach out to the voters that swung. It can only equate to poll figures down.
Rudd and co will of course seek to remind voters of Howard as a tactic.