John Armstrong: Worries better voiced straight after election

Someone at the Reserve Bank should buy the boss an alarm clock.

The Governor's warning that the incoming government will be punished with a hike in interest rates if the election campaign lolly-scramble turns into a spending binge is about three weeks too late.

His worries might have been better voiced immediately after the election. The ink is now all but dry on the long list of items entailing extra spending which Labour has promised NZ First and the Greens in exchange for their votes. .

However, a warning just after the election would have immediately raised questions as to why Dr Bollard missed an obvious opportunity to deliver a similar missive two days before the election.

When he made his announcement on the official cash rate on the Thursday before polling day, the Governor was clearly worried by the escalating election promises.

Whether yesterday's more emphatic warning, mainly targeted at ordinary households rather than Premier House, makes much difference to the bidding war for parliamentary votes is a moot point.

It gives Michael Cullen a useful bargaining chip in his dealings with Winston Peters, especially if the NZ First leader is engaging in a last-minute ratcheting-up of demands.

However, with National doing everything to lure Mr Peters to join a centre-right government, Labour has to respond in kind.

Normally, warnings of a looming double-whammy of interest rate hikes and collapsing house prices would have MPs pumping out the press statements.

But not now. As Henry Kissinger famously declared, power is the ultimate aphrodisiac. The country's politicians are 110 per cent consumed with either grabbing as much as they can, or not losing what they have got.

It is going to take more than a cold shower from the Reserve Bank to turn their minds to anything else.