Why wouldn’t Prime Minister Anthony Albanese call an election now that the RBA has cut interest rates? Photo: Michelle Kroll.
Did you hear the cheers coming out of the Cabinet bunker yesterday?
They shook the capital to its core.
Okay, that all might be a little dramatic, but it certainly wasn’t just mortgage holders feeling a sense of relief when the Reserve Bank of Australia cut the official interest rate by 0.25 of a percentage point Tuesday afternoon (18 February).
The Federal Government is over the moon about it.
It’s the first rate cut since 2020 and a much-needed boon for families and individuals in the cost-of-living struggle.
It is also something Anthony Albanese and his Labor team have been hanging their hopes on since November when the cash rate went up by the same amount.
Opposition Leader Peter Dutton has had a good run with the term ‘crisis’ when talking about the economy and, as the polls have shown, it’s been hurting the government – a government which desperately wants a second term.
It’s a tiny cut, but it’s a cut nonetheless, and it is something homeowners, as well as borrowers and spenders of all descriptions across the country, haven’t had for nearly half a decade.
This rate cut comes with plenty of warnings that we’re nowhere near out of the inflation woods yet, and there are no guarantees of further cuts to come, particularly this year.
But make no mistake, Aussies are more than a little pleased that this cut has finally arrived.
It comes with an unheard-of promise from the four major banks to pass on the cut in full.
Treasurer Jim Chalmers did his best not to jump up and down on the spot with glee when announcing that the banks were on board – while also insisting he wasn’t taking credit for that little bonus add-on to the good news.
We can be sure, however, that he has had many a discussion with bank bosses about passing on the cut in full … if there was going to be one, of course.
Yep, it all adds up to great news for the Federal Government.
There are votes in this development for sure. Just how many is less sure.
The rate cut announcement came shortly after fresh political polling numbers were released in the Essential Poll.
It placed the two major parties in a tie at 48-48 on a two-party preferred basis.
Albanese and Dutton are now neck and neck in opinion polls, with both seeing a dive in their personal approval ratings.
While that’s not great news for Albo, it’s better than the weekend’s YouGov poll suggesting the Coalition is better placed to form minority government than Labor.
Dutton could be two crossbenchers away from becoming PM, YouGov says.
The Essential Poll has a better grip on the nation’s political pulse than YouGov, so this latest survey will be the one politicians are now paying more attention to.
But there will be another poll released on another day not too far away, and then another after that, and more right up until the election is held.
So, with a not-so-good poll coming directly on the back of a pretty awful poll for Labor, and with a rate cut coming on the back of years of hikes, why wouldn’t the PM seize the moment and pay Governor-General Sam Mostyn a visit?
Why not? Indeed, despite the Prime Minister doing the media rounds yesterday, he insisted he wasn’t rushing to an election because of the good news.
There’s a lot of ground to cover before the next government is decided, and Labor is still very much up against it for sure (that’s largely self-inflicted, by the way).
So, any upswing for it should be exploited as much and as soon as possible.
We can expect to hear much, much more from Labor about how it has been, and will continue to be, on the case of improving the economy.
We can expect to hear a great deal more too from the Coalition saying exactly the opposite.
And sooner rather than later, the G-G can expect to hear the PM asking her to dissolve the parliament and issue writs for an election.
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