The Reserve Bank’s rate rise to 6.75 percent is the sixth time interest rates have risen under John Howard’s government, but the Prime Minister isn’t taking responsibility for the increase. Howard maintains that the rates would have been higher under a Labor government because their industrial relations policy was inflationary.
"Our fiscal policy has been incredibly restrained and responsible. I don't see anything in the [Reserve Bank] governor's statement that is critical of our fiscal policy," he said. He instead blamed the strong economy, oil prices and the drought.
Labor leader Kevin Rudd pointed out that it was the fifth rate rise since the government introduced WorkChoices. "Every 15 weeks or so since the introduction of Work Choices, we have had an interest rate rise," he said.
Rudd also referred to the Coalition’s previous promise to keep rates ‘at record lows’. "Mr Howard's promise has been breached on six occasions. Mr Howard can no longer be trusted on interest rates and what he says about interest rates.”
The Reserve Bank warned that inflation was not yet under control. The financial market forecast a one-in-three chance that the rate would rise again in December, but there was a higher expectation that the next increase would occur in February next year.
