Former Prime Minister Paul Keating was once voted “The World’s Best Treasurer”. He was committed to fundamental structural reform of the Australian economy, and was responsible for the deregulation of Australia’s financial system and the floating of the Australian dollar.
But Australia’s trade deficit was always one of Keating’s worries. During a 1996 radio interview, he warned Australians to curb their debt or risk the nation becoming a “banana republic”. The comment sent the value of the dollar tumbling, and gave Keating’s critics a stick with which to poke him in the eye.
Back in my days with the Young Liberals, the “banana republic” theme was used to great effect. During the 1996 Federal Election, an old mate ran as endorsed Liberal Candidate for Paul Keating’s Western Sydney seat of Blaxland.
At polling booths, Liberal Party volunteers were provided with a box of rotten bananas and a simple script. Anyone refusing a Liberal “how-to-vote” sheet would be offered a rotting banana instead. “Vote Liberal or vote for Keating’s banana republic”.
Now, with the latest inflation figures and with interest rates looking like they might go through the roof, John Howard looks like the best he can offer Australians is a banana monarchy.
Howard has attempted to blame a record 4% inflation rate on the price of Queensland bananas following the devastation to banana growing districts caused by Cyclone Larry. Record inflation will almost certainly place upward pressure on interest rates, causing greater devastation to Australian household economies than Cyclone Larry caused to North Queensland’s banana crop.
With fuel prices continuing to rise and interest rates ready to add an extra few hundred dollars to average monthly repayments, Australians can kiss goodbye their tax cuts from the last budget.
And across the Tasman, NZ Opposition Leader Don Brash’s references to New Zealand’s last budget as “the Bondi budget” won’t be sounding as amusing as when they were first delivered.