Unfortunately everything seems to be going wrong. Last week the Reserve Bank raised interest rates for the sixth time since Howard was re-elected in 2004 with the slogan 'Keeping Interest Rates Low'. Despite the bank's explicit warning that government spending was fuelling inflation and that it would take a dim view of any increases in the same, Howard went ahead on Monday with a campaign launch which included $9.5bn in new goodies for the punters. No one seems to have been impressed - the Australian Financial Review described it as a new 'land spending record' - and it allowed Labor leader Kevin Rudd to claim the high ground at his campaign launch by promising 'only' $2.4bn in new spending.
Already fighting the charge that it is trying to buy its way back into office, the last thing government needed was an official report into its pork-barrelling before the last election. But with a week to go until polling day, the National Audit Office chose yesterday to release a report showing that in 2004 a $328m regional projects scheme had been used to shovel money to government seats against departmental advice. The report is a shocker: grants were made without paper-work - sometimes before the recipient had even applied - and over a dozen were rushed though in hour on the day the last election was called so they could be announced during the campaign.