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Canberra Watch « Previous | |Next »
August 9, 2006

I watched Question Time in the House of Representatives yesterday. The session was mostly about interest rates and petrol prices.It's an explosive mix as petrol prices are feeding through the economy causing inflationary pressures.

LeahyCA.jpg

I was suprised by the change in tone in the House. The Howard Government was defensive, subdued, and nervous. In contrast the ALP was upbeat, jolly and feisty. They were confident and enjoying themselves! What a change in atmospherics. It was more akin to a carnival created by the ALP.

Question Time was about the economy, economic management and economic credibility. The old Coalition line of the 17% interest rates under the governance of Hawke/Keating started looking a bit thin given the increase in the proportion of debt being carried out by households.

The ALP has a good position: mortgages are costing households more now than in 1989 when interest rates were 17%.

| Posted by Gary Sauer-Thompson at 2:32 PM | | Comments (3)
Comments

Comments

There is a smell in the air, isn't there?

They really have to ram home the fact that, really, interest rates don't matter to the homebuyer-it's how much you have to find each week that does.

Add to this the high level of personal debt that will go up too, and you do have a nasty bite on your expenditure.

BigBob,
if you factor in a two speed economy---prosperity in the west and stagnation in the industrial capitals of Sydney and Melbourne--then Howard's battling workers in manufacturing in either of those cities would be feeling the pinch.

They are living in far-flung suburbs with massive mortgages and mounting petrol bills.The housing boom is well and truly over in the south-east of Australia with NSW in recession and Victoria close. They need a reduction in interest rates not an increase.

The increase makes sense re WA's economy is overheating, not in NSW.

Hartcher in the SMH makes the point today that the ALP have begun rehabilitation of Keating's image - which points to them beginning to get over the hump of the 17% interest rates and recession that he presided over (one could say to our eventual longer term benefit - still short term pain lingers hard in the collective memory).

And that they effectively silenced Howard by bringing up the 21% interest rate he produced as Treasurer - apparently the first time this has been used. A strange thing to have never been used to counter Howard's 17% mantra.

And the ALP is still pushing hard on affordability.

Funny thing, this world has a habit of turning things around sharply on those that become sure of their own success.