I took a peek at the news online just now and saw this News.com.au headline - "Tax cuts erase rate rise pain: PM".
John Howard is quoted: "PEOPLE are getting more money back from the Coalition's tax cuts than they are spending on mortgage increases, Prime Minister John Howard has said.
Rejecting the idea that the tax cuts were fuelling the inflation which prompted yesterday's interest rate rise, Mr Howard today said home buyers had come out ahead under the Coalition.
He said the average family received about $80 a month from last year's tax cuts and would have $120 a month under proposed cuts from next year."
Leaving aside the fact that the $80 is gone to previous rate rises and the $120 is still out there in the Never-Never somewhere; banks, investors and businesses are going to pass costs rising from interest rate increases onto their clients and customers.
So low income people on the North Coast who do not get these tax breaks will be paying more for a wide range of goods and services. Ordinary households and families with mortgages which have already pared their budgets and abandoned any luxury spending will really feel the pinch of these flow-on effects.
Nothing the Coalition has offered during this election campaign will compensate for this, especially as the current rate rise is only the first in what might be a long string of Reserve Bank efforts to dampen inflationary trends.
The Prime Minister may point to external factors in an effort to assign blame, but this is only partly true. His own profligate spending on election sweeteners (combined with past budget giveaways to shore up his position) are also to blame.
So don't tell the North Coast that we will feel no pain. We know it's a bl**dy lie!
