Interest Rates: Abbott recycles failed interest rate pledge, and runs into Gillard King Hit
17/02/2012 
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How many ways dumb is Abbott’s opening gambit on him delivering lower interest rates?
Tony Abbott must think we all have the memories of guppies. Or maybe Tony has, and he can’t remember that far back?
His last Government stint came on the back on this Howard Promise in the 2004 election.That the Coalition could be trusted to keep interest rates lower.
Tony Abbott’s premise was dumb on many levels.
Firstly, the Liberals failed to honour the “You can trust us to keep interest rates low” promise. Well we couldn’t trust the Liberals as it turned out, for the reasons I discuss here.
In fact the Howard Government failed to deliver on this promise, and interest rates increased 7 times when he was in office.
Then interest rates went down after Labor took office.
Secondly, its dumb to remind people of your own past failings by bringing them back to the surface. Don’t trawl up your failures Tony.
Thirdly, its dumb because interest rates went down under Rudd, albeit because of the Global financial crisis, to the lowest levels in history.
So its double dumb to highlight your failings against your opponents successes in one sentence. It makes you look like a fool.
Fourthly, its dumb because the interest rates have gone up recently, but only because of the success of Australia’s economy, whilst the Labor Government had its hands on the levers, and not because of Labor’s spending.
The banks were also claiming that money is costing them more, and having to put up interest rates,because of what happened with the mortgage meltdown in the US, not Labor’s spending.
So the RBA’s attempts to cool demand and inflation because of our ultra low jobless rate, brought on these interest rate increases.
Again Abbott is highlighting the Labor Governments successes, and his own lack of knowledge.
Tony Abbott makes himself a big target for Gillard.
As Prime Minister Julia Gillard said today, “Gee whiz, Tony Abbott must think everybody in Australia was born yesterday.”
I believe that Tony Abbott is incapable of thinking on that level. or understanding how interest rates work in our economy. So why would anybody trust him with money?
Exposing yourself to a free hit is the fifth reason why it was dumb. [OK, I'll stop counting now]
In fact, according to recent newspaper reports, Tony Abbott can’t manage his own family budget.
Apparently, Tony Abbott let a $900,000 mortgage repayment he was making slip his mind for 18 months, one that he was supposed to declare. So what’s he talking about mortgages for anyway?
And how can Tony Abbott claim he is a good money manager when apparently he had to refinance his mortgage because he could not manage his family budget on the money he earns and all the perks he enjoys!
Tony if you can’t manage your own money, how can you expect people to trust you with the nations money?
Wrong election cost comparison, Tony.
Abbott also refers to the price of gas and electricity as proof of costs rising under labor. Here he is mixing up State driven costs of utlilities, with a Federal election. So here he is betting that Australians are dumb enough not to pick the difference. I think voters are smarter than that Tony.
What about the workers Tony? Lower wages, less services means bigger savings for Australia?
Mr Abbott on Sunday indicated his policies will put downward pressure on interest rates. Well lower wages and rising unemployment will put downward pressure on interest rates and kill off demand.
Unfortunately it will also reduce tax revenues, have more people collecting Centrelink payments and having people lose their homes. Tony, nobody wants that! But working families can cope with these interest rates as long as they have a job that has a decent wage attached to it.
What about the Self Funded Retirees Tony? I thought they might be wanting to vote for you!
Its also dumb because he doesn’t seem to understand that many people want interest rates to be higher, including self funded retirees who have interest bearing deposits. For many this is where most of their incomes are derived from. Because rates went so low under Rudd, many had to go back to work, or supplement their incomes from CentreLink.
Hey Tony! What about the RBA? Don’t they decide on interest rates?
Finally its dumb, because politicians don’t control interest rates. That’s the job of the Reserve Bank of Australia. [And I have been saying for over two months that the last interest rate rise was one too many, and three months too soon.]
Hopefully Tony can get his act together and make a contest out of this election, or we may be seeing a routing of the Liberal party and the rise of the Greens as a third force in Australian Politics if this first day is anything to go by.
Author Rick Adlam, Mr Mortgage
Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers.
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