Surely No One Thought We Could Have It Both Ways

Sydney Morning Herald

Friday March 4, 2005

Tut, tut . . . in response to the latest interest rate increase from the Reserve Bank, I can already hear the chorus of disapproval from the debt/credit junkies and their willing and able suppliers (bank and non-bank lenders).

The message from the Reserve is simple, really: spend less (of money which isn't yours anyway), save more. To help you detox, the Reserve will increase rates, a little at a time, until the message sinks in. Get it.

Brian Surin Chain Valley Bay

How predictable it was to read the usual suspects bag the Howard Government over the piddling rise in interest rates (Letters, March 4). What is more puzzling is why they blame the Government for the current account deficit. This is a measure of private sector spending. This is Australians spending big on big-screen TVs and luxury cars. It's the business sector investing in plant and equipment.

If some people took off their anti-Howard blinkers they would see the current account deficit as the unfortunate aspect of a robust economy.

Peter Maresch Lane Cove

Your pages are filled with those virtually demanding we return to the policies of Paul Keating and the other "heroes" of the ALP who gave us "the recession we had to have" and an interest rate of 18 per cent.

Why doesn't anyone ask those who lived through those times with heavy mortgages hanging over them, who had bank loans so steep they starved to be able to pay them off, if this is what they want? But you already know the answer, don't you?

Only a total maniac, or someone so wealthy as to have no problems anyway, would cavil or complain over a 5.5 per cent bank rate.

Geoff Cass Tewantin (Qld)

The trade deficit "drama" is pure sensationalism. High interest rates in Australia encourage Australians with access to foreign credit to borrow overseas. Raising them further will strangle growth in the Australian economy but give people more incentive to borrow overseas.

Usually a high interest rate would encourage inbound foreign money, but in this case it seems the world market is betting on a fall in the Australian dollar (which would offset returns from a higher interest rate). It seems inevitable that the Australian dollar will fall, which will make overseas borrowing less attractive, imported goods more expensive and our exports more lucrative - problem solved.

Last, if the Government is so concerned about us being turned into a banana republic by Chinese toasters, why is it in negotiations with China for a free trade agreement? You can't make imports cheaper and then complain when people buy them.

Ravi Shah Glebe

You've got to hand it to some people. There's a minuscule increase in interest rates, all pandemonium breaks out with 10 letters spelling doom and gloom in this newspaper. Which part of the term "variable interest" don't they understand?

Stephen Iacono Sefton

It really is time Peter Costello stopped bleating about Keating. This week marks the ninth anniversary of the Howard Government. Enough said.

David Breeze Dulwich Hill

A family owns three properties but might have to forgo a holiday due to increased interest rates ("Another $2125, and that's the family holiday gone", Herald, March 3).

People who own two or more houses are upset at paying increased land tax. My father grew up during the Great Depression. If alive, he would have laughed long and loud at such claims of doing it so hard.

Ian Murray-Jones Randwick

The way to rein in excess consumption without the heavy-handed effects of interest rate rises would be a simple tweak to the GST. But this would never, ever happen.

William S. Lloyd Denistone