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Why Interest Rates?
“The Federal and State Governments across Australia have to come up with a smarter and more palatable way of managing divergent State economies than rely upon the RBA using the blunt instrument of interest rates rather than the fine point of a laser,” Mrs Castle said.
“On the one hand the NSW Government’s taxation regime is simply designed to reap windfall gains to prop up the State Budget by ripping hundreds of millions of dollars out of homebuyers' and investors' pockets in stamp duty and land tax at a cost to everyone who needs housing – and that means everyone.”
“On the other hand, the big stick of monetary policy hits NSW the hardest when the RBA wants to curb inflation brought about by high fuel costs and uneven State economic growth,” Mrs Castle said.
“People are just over it. At the end of the day they just want to buy somewhere to live and to make some money to retire on and unfortunately life doesn’t always mean that we can wait and buy homes when the Reserve Bank wants us to.”
Mrs Castle’s comments follow a speech by new Reserve Bank of Australia (RBA) Governor Glenn Stevens last night to some of the nation’s leading economists, where he indicated that the Bank held a continued tightening bias to monetary policy, given its concerns about inflation.
Mrs Castle said the RBA’s concerns were admirable, however, the undue impact on home owners, home buyers, investors in residential property and the rental housing stock, particularly in Sydney and other parts of NSW, was turning the Great Australian Dream of home ownership and even leasing appropriate rental accommodation into a growing nightmare for many.
“This is not just a problem for Sydney and coastal cities. The drought in rural and regional NSW is also impacting on the State’s economy and the rural property sector and regional cities and towns need another interest rate rise like a hole in the head,” Mrs Castle said.
Please direct all media enquiries to REINSW Communications Manager, Mr Nicholas Campbell
Tel. (02) 8267 0527 / 0406 955 801.
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