Vic: PM to blame for rates rise, Lenders says

AAP General News (Australia)
08-08-2007
Vic: PM to blame for rates rise, Lenders says

MELBOURNE, Aug 8 AAP - Today's interest rate rise will add $65,000 to the life of an
average mortgage and is a result of the prime minister's poor economic management, Victorian
Treasurer John Lenders says.

The Reserve Bank of Australia (RBA) has raised interest rates for the first time since
November, lifting its cash rate to 6.5 per cent, up a quarter of a per cent - the highest
level in 10 years.

Mr Lenders said the rise defied a promise from Prime Minister John Howard that under
his stewardship Australians were in good economic hands.

"The prime minister not managing interest rates has added $65,000 to the cost of an
average Victorian family's mortgage," Mr Lenders said.

He said Mr Howard was desperately trying to blame the states for the rise, but that
argument was wrong.

"The Reserve Bank gave a number of reasons today why it was raising interest rates,
it did not mention the states at all as part of those reasons," Mr Lenders said.

The inflation rate and a strong economy were among the bank's reasons, Mr Lenders said.

"Those reasons did not include state government debt and I think the governor of the
Reserve Bank and his board would have made that comment if they thought it was a problem."

Mr Lenders defended his government's efforts to make housing affordable.

"We have cut stamp duty on homes of under $500,000, we've put targeted assistance in
place for first homebuyers to come in, we're also the first state in the country to reduce
mortgage duty," he said.

"But let's not escape the fact the most significant issue in housing affordability
is interest rates."

AAP kl/gfr/apm/bwl

KEYWORD: RATES LENDERS

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