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Transcript of doorstop interview with Mr Peter Reith MP



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Deputy Leader of the Opposition

E&OE

TRANSCRIPT OF DOORSTOP INTERVIEW WITH MR PETER REITH MP, LEADER OF THE OPPOSmON AND SHADOW TREASURER, CANBERRA, 6 MAY 1992

REITH:

Today's interest rate drop will be welcome news for the victims of Mr Keating's recession. But even Mr Dawkins has had to concede the point of a possibility of an increase in interest rates later on and that of course is exactly the point that the Coalition has been making. We are concerned about the sustainability of these

interest rate cuts. We want to se e interest rates down to improve the competitive position of our businesses and to give Australian households som e breathing space from the recession. But the reality is that as Mr Dawkins has been forced to concede, he doesn't have a policy, he certainly d o e sn t have the confidence of a policy that would secure interest rates at a low level on an ongoing basis.

JOURNALIST^

All he said was, that if inflation g o es up, interest rates go up. Surely that's obvious?

REITH:

Well it was frank candour from Mr Dawkins of a sort that we are not used to from Mr Dawkins. And I can only surm ise that he's been forced by the Reserve Bank to place this qualifier in at the bottom of his press release. It's the first time I've seen such a frank admission from the Treasurer and I think it betrays an underlying lack of

confidence about the capacity of his government to continue to deliver a sustained low interest rate regime.

JOURNALIST:

So are you predicting that interest rates will rise in the near future?

, - ψ

REITH:

My concern is that we don't have a policy framework within which we can be absolutely confident that interest rates will stay down. And look the truth of the matter is that under this Government, they have used high interest rates to bring on the recession. Australian families have been crippled by high interest rates. And I would

Parliament House, Canberra, A.C.T. 2600

COMMONWEALTH

PARLIAMENTARY LIBRARY MICAH

certainly note that in past years under Labor, you had low interest rates before the election and high interest rates after the election.

JOURNALIST:

So you're expecting them to go up in the next few months...inaudible...

REITH:

Well my concern is that this Government is doing nothing to keep interest rates down on a perm anent sustained basis. They are not prepared to take the policy changes that would give us that confidence. And even them selves today have to admit that they don't have the confidence that these interest rates will stay down. It's there in

black and white for all to see. They're announcing an interest rate drop one minute and telling you the chances are that it will be up the next. And I think it just show s you that this Government's policy framework is a total m ess.

JOURNALIST:

Mr Reith, you endorse nonetheless Mr Dawkins' call that interest rates falls to be p assed on particularly to m ortgages rather than first hom e m ortgages and to holders of credit cards.

REITH:

Well these interest rate drops ought to be p assed on to all of the banks custom ers and in respect of credit cards, those rates do ap p ear to be very high, they've not moved much on past reductions in interest rates. But I would certainly like to se e lower interest rates on credit cards.

JOURNALIST:

What's going to be the factor that will send interest rates back up?

REITH:

Well I think it's, I'm not in the business of making predictions, but what we do know is that the Government doesn't have a w ages policy and we d o n t have an

independent Reserve Bank which would give people som e confidence about the capacity of the Government to control inflation. I'm not making, I'm not in the business of making predictions, but clearly just an assessm ent of the policy framework of the Government today leads us to the view and Mr Dawkins obviously to the view that there's not much room for confidence.