Talking down the economy won't help Coalition's popularity
Yes, the Coalition's fall in the opinion polls has become an economic problem. The factors behind it are taking the shine off consumer confidence at a time when increased consumption and stronger business confidence are required to minimise pain in a transitioning economy.
The bloom coming off the change of government, the very sudden end of the Abbott honeymoon, plays a key part in Wednesday's 5 per cent fall in the Westpac-Melbourne Institute consumer sentiment index. Westpac chief economist Bill Evans steers clear of the "voter intentions" demographic breakdown in the survey, but cites post-election fade as a factor.
Labor voters are taking the change hard and feeling it in their view of the economic outlook, dipping below the 100 break-even point between pessimism and optimism for the first time in nearly 5 years. The surge in Coalition voters' confidence before the election appears to have run its course. If there weren't very many Labor voters, that wouldn't matter much, but their numbers are on the rise again. The Newspoll and Fairfax-Nielsen polls both have Labor ahead of the Coalition 52-48, but Labor lags on primary votes 38-40 on the latest count.
The Coalition's rhetoric during its first couple of months haven't been the stuff of confidence-building. It seems no one buys the idea that ending the carbon tax will solve all the nation's problems.
The language and demeanour of Treasurer Joe Hockey remain too often those of a shadow treasurer. Having scared the kiddies in the past four years with the Great Big Gross Debt bogeyman, he's effectively still all doom-and-gloom about said debt blowing out towards half a trillion dollars, never mind the apparent urgency of shoring up the Reserve Bank with $8.8 billion.
Whatever the rational merit of disowning the car industry, the way it's being pushed this week is hardly confidence-building. There was a touch of hairy-chestedness about "demanding" Holden make a decision even before the Productivity Commission has finished its hearing, let alone filed its report. The figures being bandied about by the industry and its lobbyists are enough to worry people, especially the idea that Holden closing will take a much broader slice of overall Australian manufacturing with it.
So it's time to leave behind the habits of opposition - they're not working in government. The effect of constantly telling everyone what a bad job Labor did is to suggest the nation remains in a deep economic mess.
The dire threats of what-daddy's-going-to-do-with-you-when-he-gets-home (the Commission of Audit) do nothing for confidence, nor does the Gonski flippity-flopping or headlines about cutting childcare workers' pay. The ceaseless combativeness and talking down of the economy isn't working with the voters and that, in turn, is not working for our economic prospects.
Michael Pascoe is a BusinessDay contributing editor.