Portfolio Media Releases

GILLARD FINALLY ADMITS THAT LABOR HAS FORCED UP INTEREST RATES

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Julia Gillard has finally admitted that Labor's record levels of spending and borrowing has forced up interest rates.

“In saying that returning the budget to surplus will create room for the RBA to lower rates, Julia Gillard has finally thrown the dead cat on the table,” Acting Shadow Treasurer Andrew Robb said.

“This is an admission that Labor's cumulative record deficits of $167 billion and sustained borrowing of $100 million a day has resulted in Australians paying higher interest rates than they otherwise would be. It is an admission of failure.

“And while Ms Gillard and Wayne Swan talk about future surpluses it must be remembered that on budget night what Labor will actually be delivering is another deficit of $40 billion or more.

“In fact we will have to wait another 16 months before we know the final budget outcome for 2012-13.

“Labor is now spending almost $100 billion more annually compared to when they first came to office. Spending has increased by nearly 40 per cent while inflation has risen by 13.2 per cent over the same period,” Mr Robb said.

“Until Labor actually delivers a real surplus and stops its borrowing it will continue to place upward pressure on both interest rates and the exchange rate.  

“The pressure Ms Gillard is now exerting on the RBA to reduce rates is the height of hypocrisy given Labor’s previous sanctimonious lectures about respecting the independence of the Reserve. 

“It shows Julia Gillard is becoming increasingly desperate. If Labor had followed the advice of the Coalition and others over the past two years and reined in spending and borrowing interest rates and the exchange rate today would be lower. It could also be actually delivering a surplus rather than another record deficit,” Mr Robb said.