Monday, August 5, 2013

Coalition drops lower rates pledge - The Australian

Tony Abbott, watched by his wife Margie, campaigns on the NSW Central Coast. Picture: Peter Lorimer Source: TheAustralian

TONY Abbott has abandoned the Liberal Party's mantra that interest rates will always be lower under a Coalition government.

Faced with the prospect of the Reserve Bank dropping interest rates later today, the Opposition Leader said a Coalition government would not "chloroform" the economy, which would produce even lower interest rates.

He pointed to overseas. "Sure, interest rates are low, but economic activity is almost non-existent."

Instead, Mr Abbott substituted a promise that taxes would always be lower, government spending would be lower, and the budget bottom line would always be better than under Labor. He also said the economy would always be better managed under a Coalition government.

"There's no doubt that a reduction in interest rates is a good thing ...but you have to ask yourself, `why are interest rates likely to be cut?'

"The Reserve bank is worried about the state of our economy, and why wouldn't they be, given just last Friday the government's economic update revealed that the budget is haemorrhaging to the tune of $3 billion every single week, unemployment is surging toward 800,000 and debt is spiralling to $400 billion," Mr Abbott said on the NSW Central Coast.

Economic predictions suggest the Australian government's debt ceiling of $300 billion may be reached by the end of 2013.

"If interest rates go down it's because this government is presiding over an economy which is in much more trouble than the government has previously been prepared to admit," Mr Abbott said.

For the second full day of the campaign, Mr Abbott did not announce new policies, instead running on his promise to abolish the carbon tax as a symbol of the high cost of living.

He was campaigning in the NSW seat of Dobell, held by the controversial Labor MP turned independent Craig Thomson.

He said Mr Thomson "characterises and symbolises" the last six years .

"Mr Rudd is only prime minister now because he apparently got an assurance from the former Labor member for Dobell of support in the parliament."

He held a press conference with the mayor of Wyong, Doug Eaton, who said changes to the fringe benefits tax treatment of the private use of cars would cost his council $1 million a year.

Most employers are likely to pass on the extra cost of the tax changes to their employees, but Wyong Council is constrained by the NSW Local Government Act from passing on more than 10 per cent of the cost.
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