JOHN Howard yesterday doubled his campaign spending promises in one unprecedented wallop, with a $6 billion package aimed primarily at young families and small business.
This surely spells the end of any credibility for Howard’s interest rate scare against Labor, because if anything is bound to put major upward pressure on interest rates and inflation it’s Howard’s new $6 billion package.
This naked (and seemingly desperate) bribe to the voters also poses an intriguing question. Can Australians be successfully conned by the same trick for a second time? In 1993 Australians accepted Paul Keating’s promise that it was possible to have big tax cuts without a GST, only to discover that it was a lie. In 2004 John Howard is telling them that they can have smaller tax cuts, low inflation and interest rates and a very large increase in government spending all at the same time. If the majority accept this, then they’ll get the government they deserve.
What will probably happen thereafter is that Howard will retire, Costello will become PM and disown Howard’s promises as corrupt and irresponsible (as they are), and hope that he escapes the blame and odium that were Keating’s fate at the election following his Great Lie. If I were Costello, I’d become the invisible man between now and the election, and continue to keep a low profile until Howard retired, so I could have some chance of credibly disassociating myself from his policies.
PS – That theory lasted all of 25 minutes. As this SMH story reports: “Treasurer Peter Costello today defended the government’s $6 billion spending promises, saying they would not push up interest rates.”
PPS – Howard’s splurge also gives Latham the chance to promise some really meaningful major reforms in tertiary education, health, industry policy or public infrastructure, and contrast that with Howard’s cynical, wasteful vote-buying exercise. Latham could substantially underbid Howard on spending the newly-discovered projected surplus, and thereby demonstrate Labor’s fiscal prudence, but still offer a major reform package. Three-four billion of the newly-discovered surplus, plus a similar amount from the uncommitted balance of the $8 billion in savings that Labor had apparently identified, adds up to an awful lot of money.