Interest rates: who’s to blame?

Darren says:

02:27pm | 06/10/09

whatever Hockey says will be empty rhetoric - and why is he always hanging around the NSW State Parliament? is he there fro the briefing on the NSW State plan for when he finally has the courage to take on Barry Do Nothing?

Jasper says:

02:51pm | 06/10/09

Who is to blame for the rate rise? The cyclical nature of capitalism probably has the greatest role to play…

Patrick says:

02:53pm | 06/10/09

Interest rate rises are not always a bad thing, they are there for a reason after all, and that is to encourage lending and control inflation. I think this one was at least a month premature, they should have waited for the next round of unemployment figures to be released as confirmation, and the housing market wasn’t at risk of exploding between now and November.

Nevertheless, I’ll be getting my shot glasses out and will be having a drink every time Joe Hockey or Malcolm Turnbull utters the phrases “reckless spending, “higher taxes and higher interest rates” “economic vandalism” or “wind back stimulus” or words to that effect. Prediction: I will have alcohol poisoning by 8pm tonight.

ANDIKA says:

03:02pm | 06/10/09

There was no need for a rate rise today. The RBA, like RUDD, likes to be the first to show off. Aussie Dollar upwards and onwards (presently 88.38 US cents to the dollar). I wouldn’t call 3.25% an emergency setting either - 0.5% as in the US is.

John A Neve says:

03:11pm | 06/10/09

“Who’s to blame”?  We are, high levels of bankcard debt, State debt and Federal debt. Not enough personal savings and high expectations. Little manfactoring capacity a small population and a large land mass.

Come on people, to compare us to heavily industrialised countries with large populations on a small compact land mass is bullshit. We either use national savings to build infrastructure or we borrow. For years we rode on the sheep’s back, now we ride on the back of resources. Neither will last for ever, we need to make things, if we don’t !!!!!

Colin says:

03:13pm | 06/10/09

Firstly, I reckon Glenn Stevens hasn’t learned his lesson - he was too tight on monetary policy prior to the period when the GFC occured and was too slow to react. Now he’s prematurely putting up interest rates. I know the man is supposed to be a hawk, but surely some more proof is needed before we know for sure tha the economy is back on track.
This move will not do confidence much good.

Secondly, if this isn’t proof to Rudd and his lackey Swan that the stimulus has done its job, will somebody please tell them (words of four letters or less in short sentences will need to be used). The stimulus was always overdone, was poorly targeted and has led large sums of money to be wasted that could have been spent for the benefit of all in the long term rather than the short term gratification of the Labor constituency.

Thirdy, can the governor general please start clearing her throat - we have precedence for getting rid of an incompetant government.

shabangabang says:

03:16pm | 06/10/09

I’m not blaming it on Ruddy, I’m not blaming it on Swanny, I’m not blaming it on Glenn Stevens, I’m blaming it on the boogie.

Biff says:

03:25pm | 06/10/09

It’s unusual to see Mr Swan yabber on without first getting instructions from the IMF.

Lucy says:

03:28pm | 06/10/09

The best economic stimulus is low interest rates. Unfortunately, due to the Government’s poor policies on economic stimulus, the inevitable has now happened.

If the stimulus - which was in large part unnecessary given the Government’s revenue only dropped $3 billion - had been wound back, then there wouldn’t have been the same pressure on the RBA to lift rates.

Thanks Kevin and Wayne.

iansand says:

03:37pm | 06/10/09

The Coalition is still trying to frighten me into voting for them.  I won’t until their politics rises above the level of 5 year olds in a playground.

bring back costello says:

03:41pm | 06/10/09

I agree with Colin, but I’m far more skeptical.
The Reserve tends to make its decisions based on politics rather than economics.
Its Board should have started lowering rates in late 2006 (economics), but instead decided to embarrass Howard and Costello by raising them more than necessary (politics). This led to an overheating of the economy and a perception that the Coaltion were not as good at economic management as they claimed.
Then when the GFC hit, the bank lowered rates by 4 percent.
Now they’re raising rates slowly to “normal” levels, but Rudd’s stimulus (again, politics) will eventually lead to double-digit interest rates and a debt that our grandkids will have to pay off. All so that Our Beloved Leader can succeed Ban Ki-Moon…

SM says:

03:46pm | 06/10/09

I’ve always though it was kind of odd that in an agreement between 2 parties (home loan), the actual sale price (interest rate) can be changed without the agreement of both

dis interested says:

03:50pm | 06/10/09

I tihnk shangabang said it most concisely - all the rest is just nonsense - we’ve come out of the whole debacle pretty well - personally I think the interest rate rise is about two quarters too soon - but I have never worried about them - if rises in rates really effect you to the point of distraction you are over geared to start with - who borrows to the max of their capacity to repay in the belief they will never go up? -

Luke says:

03:59pm | 06/10/09

Hey It’s funny that u can sit there and blame the government for poor policies on econonmic stimulus at the same time we ae haveing an interest rate rise because our econonomy has recovered from the worst of the GFC and we DIDN’T even go into recession. Why didnt we gointo recession well that was thanks to the quick actions of this government along with moves taken by the reserve bank to lower interest rates. Now things are getting better interest rates are returning to normal levels, and for this we should all be thankfull, because it means our economy is growing…

pc says:

04:15pm | 06/10/09

So its been a couple of days since Malcolm declared he didnt want to be the leader of a party with no ideas and nothing to say. As Lucy confirms the party would rather have no ideas and nothing to say than have Malcolm as leader.

In addition to having nothing to say and no ideas, it can now be said they are completely without talent too.

Joe says:

04:51pm | 06/10/09

Its the fault of kevin’s over spending on ‘stimulus’.

Carl Palmer says:

04:53pm | 06/10/09

I agree Biff, Ken Henry’s name will also be bandied around and will no doubt be encouraged to give the occasional interview sprouting out Treasury forecasts, modelling and comparisons with this that and the other. Batman’s sidekick Robin needs all the help he can find.

chris says:

05:14pm | 06/10/09

“Is it empty posturing from the Opposition to say rates going up is the result of the Government’s stimulus spending? “
No, if the government didnt spend as much there would be less pressure on rates but more pressure on unemployment. Throwing massive amounts of cash at the ecomomy will always have an effect on prices.
As they say theres no free lunch in economics.

Jeff of Meroo says:

05:40pm | 06/10/09

I’m all for the rate rise provided Rudd and Swan acknowledge that any further stimulus spending is not required and will be exactly as the Libs said it would be..  inflationary. 

There are too many cooks in the kitchen and either the gov’t runs the economy or the RBA does.  However, when one is turning up the burner (at tax payer’s expense)  while the other is pouring water on the flame (at homeowner’s expense) then the poor tax paying homeowner gets royally screwed (aka ME!).

jim says:

05:45pm | 06/10/09

One great thing about not having a mortgage is not being a pawn. I’ve always found it so bizarre that when the levers are pulled to slow the economy down, the intention is really to take money out of the pockets of mortgage holders - directly and deliberately! Not everyone, just them - well, others indirectly, I know. Why is this system so widely accepted? Why do people stand for it? If it was in the form of a tax people would be baying for blood - I guess I just answered my own question. Still, it’s weird I reckon.

Richard Ure says:

05:55pm | 06/10/09

Just because nature abhors a vacuum does not mean the Opposition has to abhor silence.

There constant rantings for the sake of it must be worrying even their most ardent supporters. Can’t they find something new, creative or constructive to say? And if not…

James says:

09:05pm | 06/10/09

Who’s to blame?

You & me, Malcolm, Joe, Wayne, Kevin, John, Paul, Stewie, Homer, Julia, Tony, Big Gay Al, Superman, Sam Newman, Kyle Sandilands, Magda Szubanski, Hillsong Church, The Punch and Brendan Fevola.

Malcolm Turnbull would have us all believe that it is solely Kevin Rudds fault, and that is why Malcolm Turnbull will never be taken seriously by the Australian public, let alone his own party.

karl says:

09:38pm | 06/10/09

THE RBA IS A JOKE .THEY REEL IN THE INNOCENT WITH LOW INTEREST RATES so we can help the economy.Now its time to punish us for to much debt.So now all the first home buyers who rushed in to take advantage of the home buyers grant pushed along by the greedy mortgage brokers and there partners the big banks WILL BEAR THE BRUNT OF THE RISE.Why drop the rate so low in the first place now Australians are in more debt and more families will be suffering.Shame on you RBA

James says:

10:51pm | 06/10/09

Karl, surely no one was stupid enough to think that the rates would remain so low?  Please tell me there are still a few people around with a little bit of common sense?

You can’t be reeled in if you don’t bite the hook., no matter how “innocent” you are.

Richard says:

11:02pm | 06/10/09

One of the reasons our response to the GFC was so effective was because of the Govt. stimulus and the cutting of rates by the Reserve Bank.  If we hadn’t had interest rates at a reasonable level we wouldn’t have been able to cut them as much and the effect would not have been as great as it was.  Australia needs high rates to attract capital to the country as we don’t produce anything of significance that would otherwise bring in capital (as stated by John A Neve). In any case for those self funded retirees higher interest rates are no bad thing.

M Cooke says:

12:49am | 07/10/09

Mr Turnbull is right , it is Rudd and the gooses fault, there is no doubt about it , any one with a half a brain can work that out.

Poor Old Pensioner{political} says:

07:37am | 07/10/09

Give us higher rates so my $1m investment can give me more money.

hoofman says:

07:49am | 07/10/09

I blame Kyle Sandilands and Wayne Carey.

Anthony says:

09:17am | 07/10/09

If we’re out of the woods, why am I still under water?  Just as the economy is showing green shoots the RBA pulls out the rug from under working families coming in to the home straight.  It’s just crazy.

G says:

01:53pm | 07/10/09

Those careful with their home loans very likely kept their payments up as rates fell. They’ll feel no pain at all as rates start to return to normal.

Even those who took the cuts should feel little or no pain at one .25pt rise, or even two or three in a row.  It’s hardly big bikkies. Seriously.

As for Hockey’s vapourings, pffft. Apparently he thinks we’re all as economically dense as he pretends to be.  Note please, Liberal Party:

One: Government debt is small, manageable, justified and 70% of us know it.
Two: Together, interest cuts and gov spending have kept us from near financial disaster and from an economic depression. And 70% of us know that too.

That’s ‘cause most of us get by on about a third of what you lot guzzle your way through every year.  So it’s time to button it on the spin, spite and fibs, ta very much.

It’s time you started trying to put up policies good for the whole country, whether we vote for you or not. Time to work out how to present them honestly. Time to try fairness and honesty when you pore over and check Government policies that 70% of us already support.

That or face a decade or more of utter irrelevance - your choice, really.

Miles says:

03:54pm | 07/10/09

The masses can’t see the forest for the trees generally.  Property has been the most over-hyped thing in recent years - with everybody clambering over each other to load themselves with debt.  Debit which makes the banks and government more wealthy - not the average punter.  And like Jim stated earlier, all mortgage holders are pawns - and a lot of them have been sucked into it without actually thinking for themselves.