Yes, it happened again. August 08 2007 and the Reserved Bank of Australia raised the interest rates by .25% raising interest rates to a whopping 6.5%. A far cry from Labors 17.5% under Keating. This means that families who have a $200,000 home loan will be looking for another $50 per month. It’s unfortunate that this small rise will hurt many families, but this is only true for those who borrowed to the max and did not allow for rises.
In the old days, banks were very selective when giving out loans. Borrowers had to meet many criteria to show that they would be able to pay back the loan. They took into account wages, bills, and unforeseen circumstances such as the wife falling pregnant. They made sure that there was enough of a buffer zone so that the borrowers were able to survive in case things went wrong. This is not true today and many borrowers borrow more than they can afford.
Now I read somewhere that Labor is trying to say that although interest rates are lower than under Keating, people are actually paying more because of higher house prices. In other words, say that because house prices were lower in 1989 and you only had to borrow $50000, even at 17.5% your repayments would be only $8750. In today’s climate if you borrowed $200000, then at an interest rate of 6.5% you would be paying $13000 per year. OK, so we are paying more, but imagine how many families would be hurt if Labor got in and interest rates rose anywhere near 1989 levels.
I still say the country is travelling well under Howard and I just feel if it ain’t broke why fix it? Labor arguments that Liberals have been in too long and we need a change is farcical. Arguments that Howard is simply too old belittles the Aussie Elderly. I just do not feel that Labor, especially because they are so tied to Unions, can continue our great country’s current trend of a booming economy and high employment. Nope, sorry Rudd, I just don’t think you are ready.
