by Alan Thornhill
Australia’s working families have been hit twice by developments in global financial markets, according to the Prime Minister, Kevin Rudd.
“Working families in Australia – and the Australian economy more generally – are not immune to developments in global financial markets,” Mr Rudd said at question time in parliament yesterday.
“Turbulence in global financial markets is putting upward pressure on interest rates through rising credit spreads,” Mr Rudd said.
And he noted that this is happening as interest rates are already rising as a consequence of inflationary conditions.
“This is a double whammy when it comes to the impact on working families dealing with their mortgages,” Mr Rudd said.
“The government will take hard decisions to help Australia achieve long term, low inflationary growth on the one hand while on the other taking some of the pressure off inflation by ensuring that public demand is kept under control.”
Just how it will do that, though, is not yet clear.
The government has been telling us that all will be revealed when it brings its first budget into parliament in May.
The early signs, though, have not been encouraging.
The government, for example, beat a swift retreat when the opposition put a little pressure on it over the carers’ allowance and the baby bonus.
The Howard government, of course, was particularly profligate, when it came to middle class welfare.
And decisions it took, towards the end of its time in office, are politically difficult to reverse.
But governments never have a better time to take the tough, but necessary actions, than they do in their first year in office.
And the Rudd government, so far, has shown no real courage, in such matters.
Sympathy, like that Mr Rudd offered working families, yesterday, is one thing.
Real action, that will help, is another.
Watch this space.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Thursday May 23
The Dow Jones Index fell 80.02 points to 15,307.60
Ford Australia says it will close its Australian manufacturing plants in October 2016. Some 1,200 jobs to go.
A British soldier is hacked to death in the London suburb of Woolwich, in an apparent terrorist attack
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