Media Release

Rudd's Christmas rate rise trifecta

Tuesday 1st December 2009

The Rudd Labor Government must explain to mortgage holders why they will be spending more on their mortgages and less on their families this Christmas following an unprecedented third consecutive monthly jump in interest rates, Shadow Minister for Housing and Local Government and Acting Shadow Minister for Infrastructure, Scott Morrison said this afternoon.

“The interest rate hike also represents a drag on business investment, particularly in much-needed productive economic infrastructure,” Mr Morrison said.

“These three hikes since early October are an unwanted weight on families and mortgage holders right across the country,” he said.

“Ever since the Reserve Bank has been making monthly rate decisions we’ve never had three whacks in a row, especially before Christmas. It’s also the first time we have had a Christmas rate rise since 2003.

“These rate rises are a direct consequence of Labor’s refusal to rein in their reckless spending, forcing the Reserve Bank to take the hard decisions that they refuse to take.

“Labor would prefer to keep spending and borrowing money to promote themselves this Christmas, rather than give Australians a real Christmas present and take the pressure off interest rates.

“Labor’s stubborn refusal to wind back its reckless spending is in spite of urgings from domestic and global voices ranging from the Reserve Bank to the Productivity Commission, Business Council of Australia and the Organisation for Economic Co-operation and Development.

“Each 25 basis point rate hike adds another $750 a year to repayments on a $300,000 home loan.

“That’s a continual drain on the household budget and leaves less for spending on other essential household needs this Christmas, particularly at a time of fast rising costs such as electricity and water.

“The Rudd Government must now admit its mistakes and deliver a Christmas goodwill action to the Australian community and get their wasteful and reckless spending under control.

“Instead we have a Labor Government in denial, led by a Prime Minister more interested in strutting the world stage than attending to the base line needs of Australians.

“Every time a household cops another hike in the cost of living, they will see the harsh reality that three rate hikes since October could have been avoided if only Mr Rudd and Ministers Gillard and Swan had admitted their ongoing mistakes and fixed them by reining in their recklessness,” Mr Morrison said.