Our poll guru has been re-reading his Bert Kelly as the election gets underway:

“I can guarantee that interest rates will also be lower under a Coalition government,” Honest John said last week.

He made much of interest rates – and economic generally, too – in his presser yesterday when he formally announced the election date.

Of course, what he didn’t say was that the Reserve Bank indicated only a couple of weeks ago that interest rates are going to rise, anyway.

The Prime Minister hasn’t fessed up to how the war in Iraq that he was so keen on has helped push up the cost of a barrel of oil, how the Reserve Bank has nominated oil prices as a key risk for inflation, and what those billions tipped into the economy in the past few weeks by his tax and spend budgetary policies are doing for inflation – and how interest rates are usually raised to keep a lid on inflation.

Indeed, let’s bust some of the great political myths about the Government and the economy. No one in the Gallery seems to want to do it. And remember what Ross Gittins wrote on the private sector economists in the Herald a few weeks ago?

“For the most part, the nation’s economists have been derelict in their duty. They’re tigers of vigilance when Labor’s in power but, when the Libs are in office and God’s back in his heaven, they’re out to lunch.

“With business economists, their masters are so fearful of offending the Government they’re not even allowed to say what they really think about a drunken-sailor budget, much less something so far out of their bailiwick as a trade deal.

“With business itself, most of the key industry groups were squared away privately during and immediately after the deal’s negotiation. The sugar lobby, of course, was bribed in public.

“I suspect that, after eight years in office, the Government has got it through to the business lobbies that, if they want to put their case to the minister in private, the price is never to criticise in public and always to give forth approving noises whenever a new policy is announced.

“The most compulsive welcomer of Government initiatives is the Australian Chamber of Commerce and Industry, ACCI. It’s so supine in public you wonder if it’s become a subsidiary of the Liberal Party.”

Everyone who’s passed Economics 101 know that the economy’s performance is a reflection of the judgement of the Reserve Bank, the US Federal Reserve and the currency markets. The Government simply tinkers a bit at the edges with a budget surplus or deficit that runs at a little over one per cent of GDP – neither here nor there.

Labor endorses central bank independence – and why wouldn’t it. It got the process of allowing the RBA to independently set interest rates according to an inflation target under way. Peter Costello only formalised it with an exchange of letters.

Labor endorses fiscal responsibility. The main reason it hasn’t released its tax policies is that it will have no idea what the Government’s binges will have left in the purse until the Charter of Budget Honesty figures are released – and Peter Costello seems to have a gift for swiping Labor’s ideas for fiscal savings and then spending the money on buying out key constituencies while Labor is less likely to encourage the behaviour of greedy speculators than the Coalition.

Why don’t more political writers point out to the masses that interest rates and inflation are low everywhere in the world? Why won’t they write that they are low for three reasons totally devoid of the supposed management credentials of the suburban solicitors who currently control the purse strings?

· For years now – from the time of the Hawke/Keating Government – central banks around the world have targeted inflation as the key factor in setting the cost of credit.

· Global trade liberalisation has driven down traded goods inflation, and China has entered the global economy as a trading force, cutting the price of manufactured goods and helping to send Australia’s terms of trade to their best levels in three decades.

· At the same time, the process of decentralised wage fixing – started by Labor, despite some recent silliness on this subject – has continued.

Indeed, what has Howard done that is so economically astute? A bit of tax reform and… and… Well, he initially cut Labor’s budget deficit – a hangover from the global (note global) recession of the early nineties – but then proceeded to p*ss away the hard won surplus by dishing up piles of pork at every election and all the recent Budgets.

He did it back in May – at a time when the economy least needs the fiscal stimulus, thanks to household debt going through the roof as a result of the crazy halving of the capital gains tax, negative gearing and a few other bright ideas.

And, even more embarrassing than that day back in 1995 when the Debt Truck got stuck under a bridge, look at what’s happened to foreign borrowings. Foreign debt, despite all of Howard’s talk in 1996, has doubled. “It’s all private sector,” the Government will say, but it’s debt, nonetheless – debt created by the consumer lead debt spiral that Howard’s policies have helped to create.

While household debt has reached record rates, micro-economic reform has come to an absolute halt. Instead, the Coalition will stoop at anything to bail out its mates – Manildra, anyone? Good governance has gone out the window, grovelling to Washington is the rule of thumb when it comes to deciding trade policy and there was never a third term agenda.

God only knows what a fourth Howard Government’s economic achievements will be.