WEEKEND READ: Without a safety net

The future and longevity of the Rudd government are being determined right now. In 2007 we were speculating on the impact of the Reserve Bank of Australia's decision to raise interest rates on John Howard's fortunes. Howard got sent into retirement.

A year on and we are pondering not so much the impact of the RBA's latest rate reduction on the future of the Rudd government, but the impact of the underlying reasons for the larger than expected rate reduction on the fortunes of Kevin 24/7.

While Rudd's self described "working families” will welcome the reduction with open arms, it's unlikely the Prime Minister and his Treasurer will be as overjoyed, at least in private, because the reasons for the RBA's decision are a harbinger of bad news.

Job advertisements are falling, consumer confidence eroding, the housing market stagnating, business investment declining and forecasts that unemployment could rise to 9 per cent or reach double digits before the end of 2009.

After a decade of economic sunshine under Howard's Liberals, "working families” rolled the dice because times were good, they believed asset values would always rise and jobs would always be plentiful.

They believed they could afford change and eradicate work choices, which Kevin told them would help destroy their lifestyle by undermining their pay and conditions. Those same working families are now beside themselves about job security, never mind pay and conditions.

With an election due in late 2010, everything Rudd does or doesn't do now will determine whether or not there are enough positive signs on the horizon to save his skin in an election year. It's a political tight rope that could well end up around the Prime Minister's neck.

The irony of politics, is the only safety net Rudd for left those "working families” is Howard's surplus and labour market flexibility frameworks.