Horse 682 - John Howard Will Win in 2007

Australian Politics despite what people say is really very simple. Voters in this country are on the whole only concerned with their hip pocket and will vote accordingly. If you look back at election results going back 60 years to when "Ming" took power in 1949, we find that an encumbant government has only been voted out of office 4 times - 1972, 1975, 1983 and 1996.

The election cycle at a federal level since 1949 has been dictated by one factor: Australia's economic performance, comprising a combination of the inflation rate and unemployment rate. Australians are only prepared to vote out a government federally when the economy is experiencing stagflation - a relatively high unemployment rate and high inflation. Because stagflation is rare in Australia, since the election of the Menzies Government in 1949, change of government at a federal level is also rare.

From 1972-73 to 1980-81, unemployment kept rising: the average rate jumped to about 7 per cent. By 1972, the inflation rate had also leapt to above 7 per cent. With this combination, the long reign of conservative government ended in December 1972.

But the election of a Labor government federally was short-lived. Unemployment continued to worsen between 1972 and 1975 and inflation went through the roof, reaching 17.6 per cent in March 1975. Gough Whitlam was voted out of office at the end of 1975.

Unemployment continued to rise during the Fraser Government, but it stayed in power until March 1983 thanks to a trend downwards in inflation from 1975 to 1982. But inflationary pressures set in again, with the inflation rate hitting 12.5 per cent in September 1982. With unemployment reaching 9.7 per cent in February 1983, the Fraser Government lost the federal election.

The Hawke-Keating Labor Government was in power for 13 years. Between 1983 and 1990, the unemployment rate fell from 10 per cent to below 6 per cent (5.8 per cent in January 1990), holding back any change in government from inflationary pressures and rising interest rates (which were about 17 per cent at the time of the 1990 election).

After the 1990 election, Australia went into recession. By February 1993, unemployment had reached 10.8 per cent and everyone, including the Labor Party, thought the Hawke-Keating Government was over. The 1993 election was unwinnable for the then prime minister, Paul Keating.
But Keating won. Why? Although unemployment was at record high levels, inflation had dropped significantly. In March 1993, the inflation rate was about 1 per cent. Between 1993 and 1996, unemployment fell to 8.1 per cent, still historically high. But by December 1995, the inflation rate had risen to 5.1 per cent. Keating lost in March 1996 in a landslide to John Howard.

The annual inflation rate in Australia was only 3.9% in the three months to Sept. 30, the second consecutive quarter it has breached the Reserve Bank's target band of between 2-3%. Although prices have been rising, it's not yet enough to make people hurt. And despite the fact that the Federal Government is telling us what a good job it's doing (after selling the rest of Telstra and making people buy something which they used to own), really Mr Howard's Government isn't really doing anything at all and nor does it need to.

So long as the Australian Voter is as thick as cement, then Howard had nothing to fear. 60 years of evidence proves this.