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Double standards on interest rate ceilings



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Leader of the Opposition

NEWS RELEASE BY JOHN HOWARD MP L2/85

DOUBLE STANDARDS ON INTEREST RATE CEILINGS

The Prime Minister and the Treasurer are both guilty of double standards on the issue of interest rate ceilings. '

When the Treasurer removed the ceilings on small business

overdrafts in April, he said that interest rate ceilings had the effect of discouraging bank lending to small business.

He said that this had forced some such businesses either to

seek finance elsewhere, generally at a higher cost, or to make do without, ’

By contrast the Prime Minister falsely claims that the removal

of interest rate ceilings would lead to a rise in interest

rates.

The Treasurer knows full well that the Prime Minister's

assertion is economic nonsense.

The Campbell Report, the Martin Report and numerous other

inquiries have clearly demonstrated that interest rate

controls are counter productive. They force low income high risk borrowers into high cost borrowings and push up the average cost of loans. .

The Prime Minister is engaging in scaremongering tactics .

on this issue. , ;

Both he and the Treasurer are highly vulnerable on interest

rates. Both promised interest rate falls before the last election. Instead they have presided over interest rate rises

Real interest rates in Australia now stand at a 50 year high.

CANBERRA 13 September 1985 Parliament House, Canberra, A.C.T. 2600 Phone 72 6994