HUGE PRESSURE ON FAMILIES AND THE RESERVE BANK

THANKS TO KEVIN RUDD

27 January 2010

Figures released by the ABS today show that Prime Minister Rudd has broken his promise to bring down the cost-of-living for Australian working families.

The ABS’s consumer price index shows that home-grown inflation is rising fast.  Over the year to December 2009, education costs rose by 5.6%, housing costs rose by 5.5% and health costs increased by 4.7%. 

This is despite Kevin Rudd promising in March 2008 that his government would “assist working families dealing with the housing affordability crisis…..and other matters which help the family budget as well”  - Kevin Rudd, press conference, 4 March 2008.

Goods and services controlled by State Labor governments have also recorded massive price increases, putting further pressure on the strained budgets of Australian working families.

Over the year, these massive increases include:

-          Electricity prices up 15.7%

-          Water and sewerage up 14.1%

-          Gas up 9%

-          Pre school and primary education up 7.5%

-          Motoring fees and charges 6%

Treasurer Swan has today emphasised the headline inflation rate, which was 2.1% in the year through to December 2009.  However, core inflation - the key measure which will be used by the Reserve Bank when it makes its decision on the cash rate next week - remains well above the top of the RBA target band at 3.4% over the year.

There is no doubt that the Rudd government’s refusal to pull back on its spending is putting upward pressure on interest rates.   Rising interest rates will cause more pain for all Australians who are facing higher costs as a result of the Rudd government’s failure to deliver on its promise to lower the cost-of-living for working families.

-ends-