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High interest rates, a chilling prospect

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Tim Fischer mp Federal Member for Farrer

Leader of the National Party of Australia

Shadow Minister for Energy and Resources


Federal Leader of the National Party, Tim Fischer today warned that higher interest rates may be the penalty primary producers and small business have to pay for Paul Keating's economic statement.

"This is the last thing Australian Farmers and small business operators want, having just gone through a horrific period of artificially high interest rates engineered by the then Treasurer Paul Keating in the recession we should not have had.

"Keating's $2.3 billion spending program covers a range of worthwhile projects but despite this he has failed to indicate where the money will come from.

"In effect, he has taken out a loan on the Nation's Bankcard and as everyone knows, it has to be paid back with interest.

"His spending won't be coming out of taxes or cuts in Government spending so he will have to borrow. In effect he is using the Nation's Bankcard beyond the borrowing limit. This will place increasing pressure on the capital market, blowing out the deficit and forcing interest rates up once again.

"A one percent increase in interest rates will cost the farm sector $120 million.

"Farmers havn't recovered from the last interest rate hike and many have been forced off the land or have curtailed their

improvement programs or are just holding on.

"There will be some assistance through the Rural Adjustment Scheme to allow the planting of crops, however it is the 11th hour for optimum planting conditions and the assistance being offered is in reality another debt burden.

Mr Fischer said farmers and small business operators will not be the only sectors to be hit by any increase in interest rates, young first home buyers will see their mortgage payments


"Australia cannot afford the chilling prospect of another debt on the 'never never'," Mr Fischer concluded.

ENDS 1 March 1992

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