It is a measure of how crazy politics has become. Since the fall-out from the new tax system became apparent, senior government ministers have become deeply worried about small businesses shifting to One Nation or even the Labor Party. The Coalition assumed small businesses, deeply conservative and suspicious of Labor's trade union connections, were rusted-on supporters. For this reason, the government is mightily relieved that the Reserve Bank yesterday cut official interest rates by 0.5 per cent.
Small business is often heavily reliant on debt and highly susceptible to interest rate movements.
Treasurer Peter Costello yesterday called on banks to pass on the rate cut to small businesses and home buyers. At the same time, the government has been revving up its attack on the Labor Party over its relationship with the unions, claiming a Beazley government would be controlled by trade union bosses. On day one, Labor governments take office. The government is still clinging to the hope that its political stocks will be bolstered by fears in the community about the Labor Party's ability to manage the economy. With the economy slowing, voters are questioning the government's credibility.