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Costello's interest rate blunder.



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Media Release WAYNE SWAN MP Federal Labor Shadow Treasurer

COSTELLO’S INTEREST RATE BLUNDER

Peter Costello’s horror fortnight continues, with the Treasurer exposed in an embarrasing blunder on the critical question of interest rates levels.

Mr Costello told 3AW’s Neil Mitchell yesterday that:

“If you are worried about interest rates, they are a lot lower than they were 10 years ago.”

Wrong Mr Costello. Interest rates are higher than they were 10 years ago on both measures.

The RBA’s official cash rate is currently 6.25 per cent. The RBA’s official cash rate ten years ago was 5.5 per cent.

The standard variable home loan rate is currently 8.05 per cent. The standard variable home loan rate ten years ago was 7.20 per cent, according to the Reserve Bank of Australia.

Three years ago Peter Costello made interest rates the central plank of his election strategy.

Even after eight rate rises - despite his promise to keep rates at record lows - Mr Costello continues to spruik his tattered interest rate credentials.

Mr Costello is also fond of preaching that “you’ve simply got to do your homework” - he cannot brush off this major blunder on interest rates as a minor detail.

Mr Costello must now publicly explain whether: a. he is just plain wrong on this critical question of interest rates levels; or alternatively b. he has been deliberately dishonest.

Perhaps Mr Costello’s interest rate ignorance explains why he thinks the current inflation level is:

“right where we want it”.

After eight interest rate rises - despite his promise to keep rates at record lows - it is very worrying that Mr Costello thinks core quarterly inflation at 0.9 per cent is “right where we want it”.

27 July 2007

Contact: Matthew Coghlan