It’s rare that a single piece of economic data can sum up a government’s complex political problems, but yesterday’s car sales data did the trick.
One of the interesting aspects on consumer sentiment to emerge into clearer view over the past couple of years is how artificial it is. The Rudd government was able to engineer an impressive lift in consumer sentiment in 2009 in the face of an economic crisis by giving the appearance of decisiveness in its handling, handing out cash and telling people, more or less, it was their duty to spend. Now its artificiality is being demonstrated in another way, with consistently poor (though, very recently, improving) consumer sentiment at odds with record expenditure on major acquisitions such as motor vehicles, as we saw yesterday — and, as we saw a fortnight ago, overseas holidays.
That is, people say they are concerned about the economy, but are acting in a rather more relaxed manner. Another example of the gap between stated and revealed preference.
The artificiality has also been demonstrated by the extent to which it’s now clear partisanship colours voters’ view of the economy. Coalition voters can see little but economic disaster all around them, despite a constant stream of economic data that governments of the 1980s and 1990s would have sold their blackened political souls for. Labor and Greens voters, on the other hand, take a far more positive view of the world. Apart from anything else, it suggests we should increasingly view consumer confidence surveys as heavily conditional on other factors.
Australians are spending enthusiastically on cars and overseas holidays, of course, due to the ongoing strength of the dollar, although the continuing rise in motor vehicle sales is also related to tariff cuts. The strength of the dollar is partly a consequence of the government’s successful economic management in maintaining economic growth while returning to surplus, which has pushed the Aussie dollar towards safe haven status.
Meanwhile, of course, the government has thrown money at industries such as automotive manufacturing and steel in an effort to prop up sectors hit hard by a strong dollar. Australians like seeing industries propped up. Indeed, Australians are a highly interventionist bunch when it comes to industry policy.
So, in summary, people think the government’s wretched, and claim not to believe the economy is going well, but act like the economy is going gangbusters and take advantage of the consequences of the government’s quality economic management, in turn putting pressure on the government to prop up industries that are missing out.
Labor may be at an historical low point in terms of its tactical nous and communication skills, but I defy anyone to work out how to resolve the contradictions in all that. Labor faces an irrationally angry electorate. That’s a key reason the hoped-for post-carbon price polling lift is very unlikely to materialise.
I don’t know Bernah
I think they just need to be a lot more energetic, active and strongly articulate a vision with coherent inspiring narative. They’ve been very anaemic.
I saw Recalcitrant.Rick’s suggestion for a narrative, it’s quite good.
There is also the disconnect of wanting government to help the car industry but at the same time buying imported cars instead of local ones .
Like the comments
“. Coalition voters can see little but economic disaster all around them, despite a constant stream of economic data that governments of the 1980s and 1990s would have sold their blackened political souls for. Labor and Greens voters, on the other hand, take a far more positive view of the world.”
I guess that this one shows how much smarter ALP & Greens voters are. SB being a case in point.
The there’s “Labor faces an irrationally angry electorate.”
Again describes SB to a T
since julia gillard became pm and especially more so since she negotiated to remain in power with the independents and the greens , i have never in my lifetime seen a pm and as a consequence a government cop more sustained negative press than what julia gillard has endured
her change of policy on carbon is obviously the main one that comes to mind
she has been painted as though she has been the only political leader in history to back flip on a stated policy, BUT more than that she has been painted quite unfairly as simply a LIAR, come on john howard was a seriall liar, tony abbottt has admitted on prime tv that he can not be held to account on anything he says unless he writes it down
has he been branded a liar NO but julia gillard has, and it has stuck
what has occured to julia gillard and is still occuring to her can only be described as a coup de tat, every known political tactic has been used against her except armed force, with some commentators actually calling for her to be murdered
the forces behind this campaign may well achieve there aims at the next election but what saddens me even more is that there campaign will be aided and abetted by ignorant australian voters at the ballot box
no fairness no fair go any more in the so called lucky country
a pox on tony abbott and his band of lackeys
Very good article and just demonstrates the power of those conveying the message. When the MSM have moved so far to the right even a 1c increase in pizza boxes gets an article about how it will put people out of business we can see rationality has gone out the window.
This lack of rationality is also shown in the fact that people actually like a lot of labors policies and dislike a lot of Abbotts but want Gillard out anyway. The NBN and mining tax are examples of this.
I also read an interesting article over the weekend talking about the American REpublican party and how many prominent conservatives are being kicked out or leaving because they believe the party is being taken over by nutters, people unwilling to compromise and formulate good policy but instead oppose anything the other side promotes regardless of merit in order to maximise their chances of winning the next election. Anybody see similarities here?