KEY POINTS:
CANBERRA - Prime Minister John Howard made his big pitch for support at the Coalition's official launch in Brisbane yesterday swimming against a rising tide of bad news.
A last-minute change of heart by the nation's pool of swinging voters is always possible, but his chances of limping
into a fifth successive term looked more remote than ever.
A Newspoll in the Australian confirmed an earlier Morgan poll's finding that last week's interest rate rise has damaged the Government, extending Labor's lead back to 10 percentage points, enough to precipitate a landslide for Opposition Leader Kevin Rudd if repeated uniformly across the nation on November 24.
Howard's economic management - his main campaign strength - has also been opened to further attacks by Labor with a Reserve Bank warning that continuing inflationary pressures could push interest rates even higher.
Howard battled back in Brisbane, pumping about 1700 followers with his own self-confidence and refusal to consider defeat, and rhetoric of a visionary future for Australia underpinned by low inflation, low taxes and full employment.
"This election is about the future of our great nation, not the past," said the Prime Minister who has so far run largely on his record and the legacy of previous Labor mismanagement.
"Never forget what we inherited," he said.
"Never forget the A$96 billion ($113.6 billion) of debt, never forget the 8.2 per cent unemployment, never forget that interest rates reached 17 per cent under the former Government."
But as Howard conceded Labor claims of a housing affordability crisis, pushing home ownership out of the reach of millions of Australians, the Housing Industry Association predicted that the nation's chronic housing shortage could continue for another two years or more.
While Howard has been painting these pressures as the result of a booming economy fostered by his economic management, Labor has been hammering the Government for failing to install strategies and policies to keep inflation in check, and thus interest rates at the record lows the Prime Minister promised at the last election. Opinion polls place Howard ahead of Rudd in economic management, but this has been overshadowed by a preference for a Labor Government and Rudd as Prime Minister.
Yesterday's Newspoll, made after the Reserve Bank lifted the official interest rate 25 basis points to 6.75 per cent said that the Government had fallen 2 percentage points to 45 per cent on a two-party preferred basis.
Labor's support rose to 55 per cent.
Howard's audience yesterday had been primed by the man who would become Prime Minister, Treasurer Peter Costello, whose planned assumption of Howard's job if the Government is returned has been identified as an electoral liability.
Costello drove directly at the fear factor, warning that Labor did not have the experience or competence to manage an economy about to plunge into dark and troubled waters.
He warned of a duplicitous Opposition which would dump its moderate campaign promises if won Government, unveiling a radical new agenda of the kind suggested by Shadow Environment Minister Peter Garrett in an unguarded moment with a radio broadcaster.
"Let's think about this for a moment," Costello said. "Let's suppose you were a person of deep economic conservative conviction who believed in balanced budgets and repaying debt, what would you do to demonstrate it?
"Go down to the local branch of the Labor Party and sign up? Join the socialist forum? They'd have you believe there were never reds under the bed, just economic conservatives."
Along with the rhetoric, Howard and Deputy Prime Minister Mark Vaile rolled out a new list of promises: tax-free savings accounts for first-home buyers to help overcome the affordability crisis; education rebates for families, irrespective of income; subsidised university education for rural students, and; direct payments to slash childcare costs by 30 per cent.
Meanwhile Rudd, who will officially launch his campaign in Brisbane tomorrow, was yesterday bolstering his credentials in national security, a key Howard stronghold he has effectively neutralised by strong support for the US alliance and most Government policies except Iraq.
Rudd has promised to withdraw Australian combat troops from Iraq.
Speaking in Townsville, Rudd committed Labor to on-going annual increases in defence spending of 3 per cent and to a white paper to refine defence priorities. He also promised to extend free basic medical and dental care to the families of defence staff.
TAX BREAKS TO HELP FIRST-TIME HOME BUYERS
CHILDCARE
* The Government would no longer pay the childcare rebate through the tax system but up-front instead, cutting costs for families by 30 per cent.
* It would provide up to A$1 million ($1.18 million) to help build childcare facilities in areas of greatest need.
HOUSING
* From 2008-09, the Government would establish tax-free home savings accounts for people wanting to purchase their first home.
Under 18:
* Contributions of up to A$1000 a year will be tax deductible and all interest tax free.
* Parents, grandparents and friends would be able to contribute for children.
* Savings would be accessible to buy a first home once the account holder turned 18.
Over 18:
* A maximum of A$10,000 a year can be contributed to a tax-free savings account for adults with only the account holder eligible to claim a tax deduction of up to A$1000 for their contributions.
* The Government would consider contributing to the savings accounts and would also offer tax breaks to parents who use the equity in their houses to help their children buy their first home.
EDUCATION
* The Government would introduce a new tax rebate for education expenses, including school fees.