09-December-2010
Portfolio Media Releases, The Economy
In its latest shot across the bows of the Gillard government, the RBA has highlighted new data which shows Australian households are giving Labor a strong lesson in how to live within its means.
Shadow Minister for Finance and Debt Reduction Andrew Robb said the latest data shows that while households are tightening their belts, saving more and repaying debt, Labor was continuing to spend and borrow at record levels.
“Australian households are saving more than 10 per cent of their disposable incomes, the highest levels since the late 1980s, while the Gillard government is recklessly borrowing $100 million a day to fund billions of dollars in continued stimulus spending,” Mr Robb said.
Last night RBA Assistant Governor Philip Lowe said within households there had been “a rethinking of attitudes of debt and spending following the events in the global economy over the past few years.
“In preparing our forecasts we have, for some time, been assuming that the household saving rate stays high for quite a while yet. If this were to occur, not only would it lead to a lowering of risk in household balance sheets, but it would reduce inflationary pressures during the period of high investment.”
Mr Robb said that while Australian households understood the importance of living within their means, the Gillard government just didn’t get it.
“The culture of reckless spending and borrowing is ingrained in this government, which has presided over the most wasteful programs in this nation’s history.
“It seems incapable of changing its ways, despite constant, pointed warnings from the RBA, Treasury, Finance, economists, business, the Auditor General and others for over 12 months now.
“Australian households are putting this government to shame despite the increased cost of living pressures they are experiencing, through higher interest rates, which are being compounded by Labor’s profligacy,” Mr Robb said.
Media Contact: Cameron Hill on 0408 239 521