Reporter: Why don’t you just make ten louder and make ten be the top number, and make that a little louder?
Nigel (looking blank, chews his gum for a long moment before replying defiantly): These go to eleven.
No matter what Labor said in attacking his record on interest rates, Howard replied that, under Labor, interest rates went to 17 per cent. Even after Howard misled the electorate in the 2004 campaign with his promise to “keep interest rates at record lows” - misleading because the Reserve Bank, not the government, sets interest rates - he kept up the Spinal Tap defence. “Yours went to 17.”
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Even after the Reserve Bank raised rates three times, exposing Howard’s election promise as the falsehood it had always been, he kept it up. In Question Time, he called the peak mortgage rate under Labor in 1989 “the notorious 17 per cent”, “the dizzy heights of 17 per cent” and “the bitterly remembered heights of 17 per cent”. Say what you like, Howard said with a dogged imperturbability of which Nigel would be proud, but yours went to 17.
Finally, in parliament in August 2006, Labor’s treasury spokesman, Wayne Swan, reminded Howard that interest rates had hit 21 per cent in 1982 under the then Liberal treasurer, John Howard. Incredibly, it was the first time that the Opposition had used this on Howard. It seemed to disarm him. He lost his Spinal Tap defence.
It had taken Labor a decade to do this, a decade to point out that Howard’s rate peak was four percentage points higher than Keating’s. Why now? Beazley said: “We have been waiting for this for a long time - it’s finally reached the point where interest rates repayments on mortgages are more burdensome than in 1989.” The Reserve Bank had just raised official rates for the third time since Howard’s low-interest election.
How could it be that, with the average mortgage rate today at about 7.8 per cent, repayments are higher than under the notorious 17 per cent? It is because today’s buyers struggle with such huge mortgages that even though interest rates are much lower, the proportion of their income that goes towards servicing them is larger. As Labor crowed, it took an average 7 per cent of household incomes to meet mortgage interest repayments in the Hawke-Keating years, but since the last election the figure has hit 7.9 per cent.
It took Labor a full decade to realise that, in abandoning Keating because of his unpopularity, it had also surrendered its claim to Keating’s historic importance and to the prosperity he had bequeathed Australia.
Wayne Swan said in 2006 that Labor has “deliberately set out to take head-on the accusation that Keating’s record was worse than the Coalition’s”. It is too late. The boom, in the electorate’s mind, belongs to Howard. Asked which party is the better economic manager, Australians, by a margin of almost two to one, name the Howard government.
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The Lucky Country decided to make its own luck. The political party that made the decisive break failed to take credit for its own accomplishments. Now it’s too late. John Howard owns the national prosperity as a political asset or, in his own words, a “political weapon”.
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