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Govt says interest rate rises out of its control

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Australian Broadcasting Corporation

Broadcast: 05/11/2007

Reporter: Hayden Cooper

The Reserve Bank will meet tomorrow to decide wether to lift interest rates in the Middle of an election in a move that would set rates as the dominate theme of this weeks campaigning, with the Government attempting to deflate the issue as much as possible.

Transcript

TONY JONES: If last week was dominated by gaffes, this one's set to be all about interest rates.

The Reserve Bank board will meet tomorrow to decide whether to lift rates in the middle of an election campaign.

Already the Prime Minister's using an expected rise as a sign that uncertain times lie ahead, which only his government can manage.

Labor's reminding voters of the promises made three years ago.

And in what may be seen as a small positive for the Government, tomorrow's Newspoll shows Kevin Rudd's lead narrowing ever so slightly.

From Canberra, Hayden Cooper reports.

HAYDEN COOPER: Hand injuries and campaigning just don't mix, but Kevin Rudd's pushing through the pain barrier.

JOURNALIST: Are you going to get your hand looked at before you leave the hospital?

KEVIN RUDD, OPPOSITION LEADER: It's just shaking hands with guys like you.

HAYDEN COOPER: Shades of Hollywood and an election candidate's worst fear.

(Excerpt of West Wing, NBC)

CANDIDATE: Feels like it's going to fall off.

AIDE: There you go. 5,000 more handshakes to the election.

(End of campaign)

HAYDEN COOPER: But far from fiction, week four could bring a defining moment in this campaign - a hike in interest rates.

Like pulling teeth, homeowners are being told to expect some pain on Wednesday morning. But never one to give up, the Prime Minister's trying to turn a potential weakness into a strength. We are entering a more difficult and challenging period of economic management. Now is not the time to replace an experienced government on economic issues with an unexperienced government.

KEVIN RUDD: It's the big interest rate con.

HAYDEN COOPER: As the nation stops, the Reserve Bank board may go for the leavers to slow down a galloping economy. If rates do go up, it'll be the sixth rise since 2004.

Kevin Rudd says that's a broken promise in anyone's language.

KEVIN RUDD: What I see increasingly, though, is Mr Howard quite arrogantly pushing aside all responsibility for the problems of inflation in the Australian economy.

PETER COSTELLO, TREASURER: These things are outside the control of a Government, and there's not much you can do about them other then to wish that the drought would break.

HAYDEN COOPER: Unstoppable, maybe, but Mr Howard still argues a change in jockey would make things worse and he's cracking a whip at the banks, warning lifting rates beyond the expected quarter of a per cent increase.

JOHN HOWARD, PRIME MINISTER: No bank has a right, in our view, to take advantage of a general change in climate in relation to something like the subprime, to justify an increase in rates.

HAYDEN COOPER: To keep the focus on housing, Labor's unveiled funding for the homeless, $150 million for crisis accommodation.

KEVIN RUDD: And homelessness can happen to anybody. It can just hit you out of the blue.

JOHN HOWARD: The Coalition will release a policy on housing affordability well before the election.

HAYDEN COOPER: Bickering over interest rates and the promise, at least, of duelling policy on housing, the theme for the week is clear. But there's also some residual fire headed in Peter Garrett's direction after claims of another loose encounter with a journalist.

JOHN HOWARD: We now have two respected broadcasters who have confirmed what Mar Garrett said.

HAYDEN COOPER: The second is Charles Wooley.

CHARLES WOOLEY, BROADCASTER: He intimated that what we say in Opposition what might be what happens in government.

HAYDEN COOPER: Not true, says Peter Garrett, as does Malcolm Turnbull about claims that he too has been doing one thing and saying another on the Tasmanian pulp mill.

PETER CUNDALL, TV PRESENTER: Malcolm got out of his motor, rushed forward through the crowd, looked at me and said, "Oh, Peter, I must say I do hate that mill. I really hate it." And I said, "So did everybody else."

HAYDEN COOPER: Tomorrow's Newspoll in the Australian newspaper might yield some encouragement for the Coalition, but the change is only slight, 53 to 47 after preferences, still a Labor win, although John Howard has clawed back some ground as preferred Prime Minister.

KEVIN RUDD: I don't talk about opinion polls whether they are up, down, sideways, twisting about or whatever.

HAYDEN COOPER: Leave the acrobatics to the Deputy Prime Minister. No amount of poor polling will stop the stunts, not for the next three weeks anyway. Hayden Cooper, Lateline.

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Govt says interest rate rises out of its control

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