Families and businesses hit hard by rate hike

Federal Treasurer Wayne Swan has warned that families and businesses will be hit hard by the recent rate hike.

“Today’s decision is a tough one for Australian families and businesses but it’s also another indication that rates could not stay at 50 year emergency lows forever,” Swan said.

The Reserve Bank yesterday increased interest rates by 0.25 percent to 3.5 percent. Based on the increased cash rate,  Swan said an average home loan (of $300,000) would increase by $46 per month.

Opposition Leader Malcolm Turnbull said rates would keep going up because of the Government’s irresponsible over-spending on stimulus.

“The truth is Australians are going to pay higher interest rates thanks to the reckless spending of the Rudd Government,” Turnbull said.