Portfolio Media Releases

THE TREASURER IS IN DENIAL

23rd February 2010

Treasurer Wayne Swan is clearly in denial.  Today in Question Time, the Treasurer claimed:

“And of course we had the Shadow Treasurer running around the place last week, pedalling his phoney claims about some link between current spending and interest rates. And as we know, Tinkerbell over there was repudiated fundamentally, fundamentally by the Reserve Bank Governor in his evidence to the Committee only last week.”

Wayne Swan, House of Representatives, 23 February 2010.

When in fact last week in front of the House of Representatives Economics Committee, the Governor of the Reserve Bank clearly acknowledged that there is a link between government spending and interest rates:

JAMIE BRIGGS: But the link is there. There is a link between fiscal policy and excessive fiscal policy—that is, excessive government spending and interest rates.

GLENN STEVENS: In principle, that link is always there.

If the Treasurer in still in denial, perhaps it may help if he is reminded of his own words:

“The price that must be paid by the Australian people for this government's $66 billion spending spree during the election is higher interest rates, which the Reserve Bank said last Monday week are now on the cards, regrettably. It is an inevitable consequence …” 

Wayne Swan, Hansard, 16/02/2005, p. 120

 “But if the government pretend that interest rates are low then they do not have to admit that it is their policies that are putting pressure on the rates. What is putting pressure on the rates" What is partially responsible for this? It is the big spending, high taxing government.”

Wayne Swan, Hansard, 09/03/2005, p. 85

But if he is still unsure, maybe the words of the Prime Minister will make it clear:

"I believe there is a strong economic case for budget belt-tightening by the national Government if we want to do our bit in budget policy to make the job of the Reserve Bank easier over the course of 2008 to keep interest rates as low as possible.''
Kevin Rudd, AAP, 4 December 2008