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PM admits breaking rates promise

Article from: AAP

By Maria Hawthorne, Jane Bunce and Peter Veness

October 26, 2007 06:41pm

PRIME Minister John Howard today admitted breaking a promise to keep interest rates at record lows.

Mr Howard has previously denied making the promise, saying he had only said that rates would always be lower under the Coalition than under Labor.

But he conceded this morning that the promise was made in a Liberal Party ad which aired for two nights early in the 2004 campaign, before being withdrawn.

He refused to say who pulled the ad or why.

But with the Reserve Bank poised to lift rates next month, for the sixth time since the 2004 election, he urged voters not to consider what he said three years ago, but to look to the future under a Labor government.

"What we have to focus on with interest rates now is not so much what was said three years ago – I'm quite happy to answer questions on that – but people are interested in what will happen in the future," Mr Howard said to Southern Cross Broadcasting.

"And they have to ask themselves, do they really think at a time of world financial turbulence, the economy will be better managed by the Labor Party, that interest rates will be lower under the Labor Party than they will be under the Coalition?

"All the evidence tells me that they won't be and the evidence of course is that when Labor was last in office interest rates were much, much higher than they are now.

"More importantly than the history, it's the future."

Mr Howard denied personally making the promise but acknowledged that a Liberal ad had pledged to keep rates at record lows.

"That particular advertisement lasted two nights and then it disappeared. It didn't get out of my mouth," he said in an earlier interview on Melbourne radio.

"Interest rates are not at record lows now, I understand that.

"The advertising did refer to that for two nights, I accept that.

"I acknowledge what was said.

"What really matters now is which side of politics is better able to manage an increasingly-hostile financial environment. Isn't that the question?"

Labor leader Kevin Rudd said working families were paying the price for trusting Mr Howard.

The "broken promise" had cost first home buyers on an average $240,000 mortgage about $200 a month, he said.

"What Mr Howard is saying is that his promise at the last election on interest rates lasted only two nights, and therefore from his point of view didn't really count," Mr Rudd said in Perth.

"Well, a lot of Australians who voted for Mr Howard at the last election did think it counted, and now they are paying the price for it with five interest rate rises on the hop.

"He has lost touch with working families if he thinks that you can say to them, down the barrel of the cameras as that Liberal ad did, that they would keep interest rates at record lows in order to get that last election in the bag and then get working families marooned."

Both leaders were campaigning in Perth today, where Mr Howard committed a re-elected Coalition government to spending $75 million to create a competitive grants program for emerging renewable energy technology.

And Mr Rudd promised almost half-a-billion dollars to have solar panels and rainwater tanks installed in both private and public schools across the country.


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