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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

economic prosperity plus « Previous | |Next »
June 15, 2007

Glenn Stevens, the Reserve Bank governor, sent a strong signal yesterday that he will probably raise official interest rates again in the coming months. However, four rate rises have not disqualified the Government from being accepted by the electorate as a better economic manager than the ALP. Costello and Howard sure do thump the economic drum in Question Time about their greatness and Rudd's incompetence.

The political reality is that Labor has not been able to persuade Australia that it can be trusted with the economy---(meaning a job and an income). I cannot see a fifth increase in interest rates before the election making much difference. Nor can Peter Hartcher

electionC.jpg
Allan Moir

Nor will this kind of inequality despite a decade of economic prosperity.

This is "serious national housing crisis" characterised by "reductions in public housing stock, soaring private rental rates, an acknowledged housing affordability crisis and no real reduction in the number of homeless". And yet , as Glenn Steven, points out:

The global economy has continued to grow faster than its long‑run average, oil prices have risen a lot further, compensation for risk in financial markets remains remarkably skinny, Australia’s economic expansion has continued and Queensland is still experiencing stronger economic conditions than the average for Australia. But the fact that all those things are still occurring is quite remarkable. The Australian economy is on the cusp of the seventeenth year of the expansion which began in the second half of 1991. There is, at the moment, moreover, a high degree of confidence about the future, with share prices near record highs, property markets firming again and borrowing proceeding apace.

This means that inflation is a concern in the medium term as the pressures build from the economy operating at near full capacity. So further monetary tightening will come, though not in the immediate term is the message.

| Posted by Gary Sauer-Thompson at 8:53 AM |