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August 2006
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Daily Media Quotation

Silence When The Volume Is Turned Up To 21

August 11, 2006

by Peter Hartcher - Sydney Morning Herald

In the cult movie This Is Spinal Tap, a spoof documentary on the life of a failing heavy metal band, the group's guitarist takes us on a tour of his collection of prized musical instruments. After showing off his favourite electric guitar - the one with the flame painted on it - the long-haired, gum-chewing Cockney Nigel Tufnel brings us to his favourite amplifier.

"It's very, very special because if you can see," drawing attention to the calibrations on the knobs on the face of the amplifier, "the numbers all go to 11."

A normal volume knob is marked from zero to 10, but Nigel's favourite goes up to 11. The reporter wants to know if this unique calibration makes the amplifier louder. "Well, it's one louder, isn't it?" Nigel replies triumphantly. "It's not 10. You see, most blokes, you know, will be playing at 10."

"What we do is if we need that extra push over the cliff you know what we do?"

Reporter: Put it up to 11.

Nigel: Eleven. Exactly. One louder.

Reporter: Why don't you just make 10 louder and make 10 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 11."

When Parliament resumed on Tuesday, and then again on Wednesday, Labor devoted most of its opportunities in question time to vociferously attacking John Howard for presiding over three increases in official interest rates since the election at which he promised to keep interest rates low.

The Prime Minister responded with the Spinal Tap defence. No matter what Labor said in attacking his record on interest rates, Howard replied that, under Labor, interest rates went to 17 per cent.

On Wednesday, Labor asked Howard about interest rates four times, and each time Howard gave the same answer. 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 seemed to be saying with a dogged imperturbability of which Nigel would be proud, but yours went to 17.

So yesterday, 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. It was the first time that the Opposition had used this on Howard.

It seemed to disarm Howard. He lost his Spinal Tap defence. At first, he let out a nervous laugh, then he delivered a flailing non-answer. No mention of 17 per cent rates under Labor.

There is a new aggression in Labor's attack on the Government's economic record. This week we saw a preview of Labor's campaign against the Government at the next election - it struck out strongly on the "triple whammy" of hip-pocket issues of interest rates, petrol prices and the workplace laws.

The Reserve Bank's decision last week to raise official rates for the third time since Howard's low-interest election has galvanised the Opposition. And the best evidence was that, for the first time in years, Labor spoke the unmentionable word during an attack on the Government's economic performance: Keating.

Paul Keating was an unpopular leader, and the Liberals have made sure his name has become synonymous with the 17 per cent interest rates that prevailed during his term as treasurer. The name was so stigmatised that his successors in the Labor leadership sought to distance themselves. Amid the razzle-dazzle of the Labor campaign launch in Brisbane at the last election, former leaders were feted, and Mark Latham hugged Gough Whitlam for the cameras.

But Keating was brought in through a side door and edited from Labor's broadcast TV footage. He became invisible. It was the nadir of his exile. Now Labor is rehabilitating him. "We have decided to bring him in from the cold," Kim Beazley said this week. "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."

How can this be so, with the average mortgage today about 7.8 per cent, compared to the notorious 17 per cent? Because today's buyers struggle with such huge mortgages that even though interest rates are much lower today, the proportion of their incomes that goes towards servicing them is larger.

As Labor crowed this week, 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 it has hit 7.9 per cent. At the last election, Latham, embarrassed about Keating and reluctant to fight Howard's record of success, chose to avoid the economy, and left Howard to dominate the battlefield. It was a disastrous choice.

Swan says Labor has "deliberately set out to take head-on the accusation that Keating's record was worse than theirs".

It will be hard for Labor to win this argument. It is hard to argue against 15 years of uninterrupted growth, halved unemployment and doubled household wealth.

But even if Labor cannot win the argument on the economy, it has demonstrated this week that it can neutralise the issue.

If it can deprive Howard of his biggest winning issue at the last election, it will be a critical win. Labor forced Howard back onto the Spinal Tap defence, and then even forced him to abandon that.

It is not a sufficient condition for a Labor victory. It must work on credibility. It must avoid pop economics and stunts; Beazley, a candidate for the prime ministership, needs to avoid lowering himself to pointless and unedifying exchanges with Government back benchers. But while it is not a sufficient condition for a Labor win, neutralising Howard on rates is a necessary condition.

Peter Hartcher is the Herald's political editor.



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