This article is from the Australian Property Journal archive
Just over 14 months ago, the Reserve Bank raised interest rates by a ¼ of a percentage point – many are speculating a similar rise next week, but not Australia’s Treasurer Peter Costello.
Reserve Bank board meets next Tuesday with speculation he increase that rates will go up next Wednesday. It was in March last year that the Reserve Bank last raised interest rates.
However, yesterday the man in charge of
’s economic future, Treasurer Peter Costello would not enter the interest rate debate.
Mr Costello said the agreed conduct of monetary policy, set in place in 1996, was to have the independent bank setting the cash rate at its monthly meetings.
Mr Costello said that was done according to a formula of achieving 2% to 3% underlying inflation over the course of the cycle.
"For over 10 years now I have studiously refrained from predicting interest rates," he said on Network Ten yesterday.
"Interest rates in this country will be set as they always have been, according to an inflation target of 2% to 3% underlying over the course of the cycle.
"This will be determined by the board at its meeting. I don’t predict the future of interest rates.
"I’ve got other things that I am turning my mind to at the moment and that is an independent arrangement which has served
well over 10 years and will continue."
Mr Costello said the Reserve Bank’s meetings had been occurring every month and that will go on “before the budget, after the budget, for years to come”.
"We don’t sit around and wait for these things. We make our own assessments as to what the economy needs, where it has to go and we take the right decisions accordingly."
By Ted McDonnell
