Howard's Pledge To Keep Interest Rates At "Record Lows" Has Cost Mortgage Payers $3000 Since Last Election

Not being a part of the Canberra press gallery, I'm not too sure how widespread this rumour was, but it goes like this : It was John Howard who insisted on pushing the 'Keeping Interest Rates Low' and 'Keeping Interest Rates At Record Lows' mantras during the 2004 federal election. Treasurer Peter Costello objected, loudly, knowing it was a lie that would probably come back to burn them, but Howard would hear no dissent on the subject.

And how those two lines are coming back to burn the Howard government now.

For the first time in history, interest rates will be raised in the middle of a federal election campaign. This will be the sixth straight rise since that election, and every newspaper, radio station and television news program in the country, is reminding Howard of his pledge to 'keep interest rates at record lows.'

Howard, and Costello, first tried to claim that interest rates were still low, when the fourth and fifth rate rise hit. But that argument is dead now. People are hurting.The estimates of hundreds of thousands of families being pummeled by rising mortgage payments is the news story of the day :

Another rate rise - which would be announced on November 7, just 17 days before the election - would be the sixth straight rate rise since the Coalition was re-elected in 2004, after promising to keep interest rates at "record lows".

The increase in mortgage rates since then would add more than $3000 to the annual cost of servicing a $250,000 mortgage.

Labor treasury spokesman, Wayne Swan said that over the past five years, food costs had risen 50 per cent faster than the overall cost of living, which was up 21.4 per cent. Health costs had risen by 30 per cent while education costs were up by 40 per cent.

Food costs are likely to rise even further, as the effects of a worldwide grain shortage takes hold, leading to larger increases in the price of bread and milk, for starters.

So desperate is Peter Costello to get the focus off him and the PM and their dodgy promises about interest rates, he's now claiming that a Labor government would lead the country in a recession.

So this golden economy that Howard and Costello never stop trying to take total credit for is that weak and fragile, is it?

It's a tactic unlikely to work. Rudd got in early and warned the Australian people that Howard & Company would use The Fear in their campaigning.

But that won't stop them trying. What else have they got now?

Two weeks out from the election, Howard and Costello will be so desperate they'll probably run ads with old footage from the Great Depression of the 1930s, of soup kitchens and lines of unemployed workers and dirty-faced children picking through garbage bins. 'If you want to go back to this, vote for Kevin Rudd.'

Now that would be a fear campaign.

And there's also this - more good news for the government : financial markets are reportedly betting on two interest rate rises by the end of the year.