Nov 2010

Rate rise hikes up dollar

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Member for Kennedy Bob Katter says today’s increase in the Australian dollar on the back of a Reserve Bank interest rate rise is evidence that the two are connected.

“There could not be a clearer and louder statement that interest rate rises lead to a change in the value of the Dollar,” he said.

“Often, this proposition is rejected by Treasury. But Treasury must understand that in their claim that interest rises are an effort to restrain inflation – a problem that exists in Treasury’s mind only – the reality is that their continuous interest rate rises are crippling our exports.

“They have used the argument of inflation to justify interest rates that average between 100 and 1000 per cent higher than our trading partners Europe (1%), the US (0.1%) and Japan (0.1%).

“With every rise in the interest rate, we have a rise in the Australian Dollar and every rise in the Australian Dollar is another nail in the coffin for the productive part of the Australian economy.

“Soon, Australia will produce nothing and own nothing as a result of primitive, 19th century Laissez-faire capitalism, which we now euphemistically and hypocritically describe as economic reform.

“If the Treasury in the late 1980s, had not told us a whopping great lie that they were raising interest rates to restrain inflation when inflation was plummeting from over 9.5 per cent to 6 per cent.

“Everyone knows the rates were raised to 17 per cent to protect the banks, two of which, in the 1890s, were technically insolvent. All four of them were last year given an open-handed guarantee by government.

“These banks, with their CEOs on obscene salaries or $8m a year are making record profits while enjoying government guarantees and the highest interest rates in the world.

“It’s time to yard them.”

Contact Details

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Mount Isa
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Email: Bob.Katter.MP@aph.gov.au