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Costello should say sorry for rates rise.



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DEMOCRATS MEDIA 05/091 WEDNESDAY 2 MARCH 2005 SENATOR JOHN CHERRY AUSTRALIAN DEMOCRATS SPOKESPERSON ON HOUSING COSTELLO SHOULD SAY SORRY FOR RATES RISE The Australian Democrats have called on Federal Treasurer, Peter Costello, to apologise to homeowners for today's increase in interest rates. The Reserve Bank today announced that official cash interest rates will immediately increase from 5.25% to 5.50% costing the average homeowner an additional $30 a month. Democrats Housing spokesperson Senator John Cherry blamed the massive increase in property prices, and said that the interest rate increase would particularly hurt those on low incomes who did not get a tax cut in last year’s Budget. "The Treasurer doesn't mind claiming credit for our low unemployment and strong economy but he should acknowledge that his tax policies have created the housing bubble that has increased interest rates," Senator Cherry said. "Last year we saw $66 billion given away in election and budget bribes. Unfortunately, very little of this money went to those who need it the most and who will feel the squeeze of this interest rate increase. "The only question remaining is how much interest rates will keep increasing. It seems that the Treasurer has given the Reserve Bank the green light to increase rates up to 10 per cent.” Senator Cherry said the Reserve Bank and the Productivity Commission have supported the Australian Democrats policy that negative gearing and capital gains tax concessions should be reviewed. "This would restore affordability for first home buyers and reduce the prospect of significant interest rates increases," Senator Cherry concluded. Media contact Daele Healy 0419 867 649