There were lots of memorable lines in Tony Abbott’s first press conference as Liberal leader yesterday but there was one you can expect to hear repeatedly ahead of the next election, whenever that might be.
``Each and every interest rate rise over the next 12 months is due to the irresponsible spending spree of the Rudd government,’’ he said.
There you have it. Kevin Rudd is going to be made to own each and every 25 basis point rise in interest rates between now and the next election - including the latest one yesterday.
The ETS is the issue that has dominated the debate for the past fortnight but interest rates - and the associated ``Labor is burying you in debt and deficit’’ line that will be flogged by the Coalition - will have just as much say in Rudd’s election timing.
Labor doesn’t want to be going to the polls with rates heading back toward 4.5-5 per cent. As Wayne Swan reluctantly accepts, the wonderful rates holiday we’ve enjoyed through the non-recession is over and households will soon be hurting. (Though, Westpac’s stunning and inexplicable 45 basis point rise in its mortgage rates yesterday suggests the real pain might come sooner than Labor expects.)
There was some talk, fuelled by the debt crisis in Dubai, that the Reserve Bank would give us all a Christmas gift and hold off raising rates until our credit card payments become due next year.
But yesterday’s statement from Glenn Stevens and his crew, who raised rates for the third time in three months for the first time ever, suggests they are worried about a housing bubble and we are on the fast track to situation normal, which is official rates somewhere around 5.5 per cent and mortgage rates near 7.5 per cent.
``In Australia, the downturn was relatively mild, and measures of confidence and business conditions suggest that the economy is in a gradual recovery,’’ the RBA said.
The global economy, so enfeebled just six months ago, has ``resumed growth’‘, we’re told. The strong dollar is helping keep inflation and rates pressure under control but the unemployment rate is close to its peak and, says the RBA, “the risk of serious economic contraction in Australia” has passed.
For what it’s worth - and I have lost a little faith in economists during the financial crisis - the consensus is for rates to continue to rise after, perhaps, a brief break at the start of next year to be about 4.25-4.75 per cent (and as high as 5.25 per cent) by the second half of 2010.
The reason rates are rising is that Australia has performed better than any other advanced economy during the downturn.
But, as Abbott knows, pride in your country’s economic achievements counts for nothing when your mortgage payments are rising every month.
Facebook Recommendations
Read all about it
Punch live
Up to the minute Twitter chatter
OK, so am I the last person in Australia to see this Herald front page mockup thru the Rinehart lens? http://t.co/LSNBPkVl
RT @mumbletwits: Our judgement is that ANZ will lift interest rates despite the RBA announcement, but only by about 0.06 per cent. #hindsightbrokers
Loving this photo of Arnie and Sly Stallone together in hospital for treatment. Great shot http://t.co/BD7FkF5e
Recent posts
The latest and greatest
Would you kill for a job?
Who would work in an abattoir? Most of us have done jobs we didn’t want to do because we needed…
Friday Dilemma: child cruelty or harmless fun?
Parenting. It’s the new oneupmanship. Ah, how quaint the days now seem when parents could raise…
Hipsters with hip replacements
Someone once told me that when people reach a certain age they begin dressing in the manner they did…
Nosebleed Section
choice ringside rantings
From: Punch on: Open thread 09/02/2012
marley says:
I'm one of the older ones, so I've certainly seen a few changes in my time. When I started school I learned to write with a nib pen, dipped in an inkwell (no, I'm not kidding). My mother became a dab hand at getting inkstains out of my clothes. Flicking ink at one another in the classroom was an essential… [read more]From: I’d rather have a piece of toast than listen to crap lyrics
Erick says:
Led Zeppelin are responsible for my all-time favourite mixed metaphor: "There you sit, sit and stare, like a book on a shelf rusting." (Misty Mountain Hop) I laugh every time I hear it. Hmmm, I believe I've decided what to play on the way to work today. [read more]Gentle jabs to the ribs
No wuckin forries. These nuckin futs are tuckin fops
Well, puck me with a fitchfork. The F-word is apparently an acceptable part of Australian speech. That’s… Read more
Most commented