September 03, 2004 | Graham

The dangers of over promising and over demonstrating

Yesterday Mark Latham signed “Labor’s Low Interest Rate Guarantee”. This was a variation on past themes from both sides of politics, and it was a mistake.
In 1993, needing a weapon to blunt the tax cut component of the Hewson Fightback! package, Keating legislated his LAW Tax Cuts. The message was that you can vote for Hewson and you will get his tax cuts, and the pain of the GST, or you can vote for me, and just get the tax cuts. Whenever Keating was challenged on whether his cuts were deliverable he would spell it out – of course, they are L.A.W. law.
After winning the election he had to scrap the cuts. They had never been deliverable, they had only ever been an evasive form of rebuttal.
Putting aside for one moment whether Latham’s undertakings are deliverable, they are still cut from the same paradigm – if it’s in writing and you can spell it out it must be real. Running an election campaign based on honesty and pulling a stunt that reeks of previous dishonesty by your own party is unlikely to earn you trust.
One of the side effects of that Keating promise, and the many other grandiose promises made by politicians, is that voters have become incredibly cynical about anything politicians offer them. Our focus group research in previous elections shows that there is virtually nothing that a politician can promise to deliver that will make electors vote for them. In fact, large promises actually turn voters off. An election campaign fought on the basis of large claims is heading for trouble in today’s climate.
Latham’s guarantee suffers from being a large promise. He is undertaking to:

  • provide surpluses in each year of the next parliament and reduce net debt;
  • reduce Commonwealth spending as a share of the economy; and
  • reduce Commonwealth revenue as a share of the economy.
  • At the same time he is making promises that will cost the government money, like rolling back Brendan Nelson’s changes to the University sector. When we asked our focus group on the Federal Budget whether they thought Latham could find the promised $8 Billion saving he was promising at the time, there was the online equivalent of laughter from the group.
    I have no doubt that Latham intends to try to do all these things simultaneously, but I’m sceptical that he can. I’m also concerned that not all of them are particularly economically appropriate. Take the promise to keep the budget in surplus. If we remain in an expansionary phase for the next term of parliament, that makes perfect sense. It doesn’t if we move into a recession; and we easily could if oil prices remain high, or go higher, and if the US currency were to suddenly realign to a lower (and more realistic) value. If Latham wins, and there is a recession, then this document, his signature, and the “bond” that is his word, will all be held in evidence against him if he is forced to run deficits as a result of circumstance, particularly as he is running an election campaign based on truth.
    It may also have immediate consequences with left of centre voters. These are Labor’s enthusiasts, because they are most motivated to depose Howard. They are also that sector of the community that wants to increase government services and that is most likely to tell pollsters that government spending and revenue should be a larger share of the economy. Making this pledge may rob Latham’s campaign of vital energy at the same time as it does nothing to convince centre and right voters that he can deliver.
    It is also likely to unsettle more conservative voters who will probably suspect it is just another stunt, and that he doesn’t mean it, just as they suspected that Labor’s hard line approach to refugees at the last election was one they didn’t intend to stick to, and therefore an indication of untrustworthiness.
    Of course, all these observations about what voters are likely to think are subject to the caveat that I am only speculating. Next week, after we have done the first of our focus groups, I will be in a much more knowledgeable position. If you’re interested in being involved, please fill in our questionnaire at

    Posted by Graham at 12:05 pm | Comments Off on The dangers of over promising and over demonstrating |
    Filed under: Australian Politics

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