Page 539 - Week 02 - Wednesday, 5 March 2008
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Reserve Bank has changed is not the official interest rate—and the minister with the economics degree should know this. It is not the official interest rate, and you know that—or you should. It is far from it. There are many interest rates—the large business borrowing rate, the small business borrowing rate, the housing interest rate, the credit card rate, the cash rate, the overdraft rate. There are many rates in the market but the Reserve Bank has changed the cash rate—that is the rate at which it charges the major banks for lending funds to those banks.
Mr Seselja: That is embarrassing.
MR SMYTH: How embarrassing is correct. The decision announced at the board meeting was to raise it by 25 basis points to 7.25 effective 5 March 2008. So what we are talking about is the cash rate, even though you do not seem to understand that, Chief Minister, and clearly Mr Barr has just exposed his ignorance, the man with the economics degree; he does not even know this. Then you spent considerable time talking about the impact—
Mr Barr: I just said I would not stand for you lecturing anyone on economics, because you are an ignoramus.
MR TEMPORARY DEPUTY SPEAKER: Order, members!
MR SMYTH: of the increase in interest rates on struggling home buyers and others. The clear implication in your ranting was that the Howard government—
Mr Barr: You are the most embarrassing and least qualified person—
Mr TEMPORARY DEPUTY SPEAKER: Order! Mr Smyth—
MR SMYTH: caused the interest rate to escalate and as a result—
Mr Barr: to fill the role of shadow Treasurer in the history of this place.
MR TEMPORARY DEPUTY SPEAKER: Order! Mr Smyth, could you take your seat for a moment, please. Minister Barr, I have called you to order several times. Stop the conversations across the chamber, please.
Mr Barr: I am sorry, Mr Temporary Deputy Speaker.
MR SMYTH: Thank you, Mr Temporary Deputy Speaker. The other important thing to remind people is that the current cash rate is 12.75 percentage points below the 18 per cent imposed by the former Keating government in 1990 on Australian households and businesses. There is the lesson: 18 per cent down to 7.25 per cent. The Chief Minister’s comments are quite simplistic; they do not understand what the Reserve Bank says and I think in that regard the Chief Minister ought to read the statements of the Reserve Bank at what is causing this. It is consumer spend that is causing it.
MR BARR (Molonglo—Minister for Education and Training, Minister for Planning, Minister for Tourism, Sport and Recreation, Minister for Industrial Relations) (4.18):
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