Let’s cut to the chase. No prime minister or treasurer wants an interest rate hike in the middle of an election campaign focused on rising living costs.
Not Scott Morrison. Not Josh Frydenberg.
But the Reserve Bank has increased the cash rate and the central bank governor, Philip Lowe – who has the benign demeanour of a country parson in a Jane Austen novel – has signalled further increases are coming to counter inflationary pressure in the economy. Rates, Lowe warned on Tuesday, are now on a path to 2.5%.
Tuesday was the end of free money in other words. A big development. A blow to the aspirational Australians staking both the present and their future on the free money they’ve grown pretty accustomed to.
Often treasurers respond to epochal misfortune alone. But misery loves company.
Tuesday’s decision by the central bank was the first upward movement in interest rates in more than a decade. The last time rates went up during a federal election, back in 2007, the incumbent lost the contest and lost his seat – largely because events, in concert with his record, framed John Howard as a leader with more slogans than solutions.
Given the pressures and the bad portents, call it a sense of deja vu, Frydenberg brought his wingman – the prime minister. Morrison was asked upfront by one of the travelling impertinences whether or not he had just lost the election.
The prime minister was curt: “Of course not.” That was the cue to start pedalling – and pedal they did.
Morrison suggested the looming rate increase (worth about $85 a month on an average mortgage) was, in some respects, a dividend of Australia’s economic success. This was a sign of the strength of Australia’s economy, bouncing back after Covid.
Before anyone could genuflect or holler “just how tremendous are you – no, really”, Morrison observed that Australians had been preparing for this eventuality for some time and had “strengthened their balance sheets”.
Now it’s possible this sort of language resonates in some parts of the country, where household incomes are generous enough to warrant the status of a balance sheet. I’m prepared to hear submissions on this point.
But having been on a campaign stop earlier in the day at a household on the New South Wales Central Coast where a young woman couldn’t afford to save for a mortgage because her rent was so high, strengthening the balance sheet really didn’t feel that relevant an observation. The rhetoric felt pretty ludicrous.
Ludicrous or not, Morrison ploughed on. The prime minister noted he’d met the current cost of living challenges through recent budget measures and through tax relief. Frydenberg declared the government had people’s backs, which sounded pleasingly collegiate.
The problem with collegiality, though, is it’s not absolute. The cash payments and cuts to fuel excise in the Coalition’s pre-election budget are temporary, and the cycle of rising prices and rising rates looks to be with us for a little while, which for many people would feel like the working definition of sucks to be us.
Tuesday’s “please don’t let this be 2007” pitch contained all the usual parameters – all the good bits of the story reflected Morrison and Frydenberg’s general beneficence and the bad bits weren’t Morrison or Frydenberg’s fault.
The pair worked up to their counterpoint crescendo.
Morrison and Frydenberg declared these were very uncertain times and Australians would be much better placed sticking with the current government (the one presiding over the rising prices and rising rates) because the alternative was way, way scarier.
As could have been predicted (and in fact was) from the moment Anthony Albanese stumbled on day one of the election campaign with his brain fade on the cash rate – Morrison grabbed the helpful gaffe. The prime minister noted this bloke (that would be Albanese) who didn’t even know what the cash rate was three short weeks ago (but who’s counting) now believes he’s best to manage these very dicey conditions.
We were back to the ballad of the devil you know – Morrison’s 2022 campaign anthem. I shouldn’t say “back” because the truth is we never left. This pitch is beyond dreary.
Vote for us because we’ll do great things is compelling, it’s always electrifying, whether you agree with the things or not. But vote for us because we are not Labor is the most unfulfilling call to action in recent memory. Is this really it? All you’ve got guys? At this moment in history?
But voters should not assume because Morrison’s arguments are tired, self-serving, and often internally contradictory, that this shtick won’t work.
It might work, and we know Morrison will throw everything he has at making his message stick.
