My Rudd is going to stay hands off on interest rates to promote competition in the market. He is making a wise and intelligent move. Well, I am not saying the decision is right or wrong, but it shows his understanding of market. Period. Now, I am very interested in his promise on resolving housing afford ability issues.
New Prime Minister Kevin Rudd said Australia was a market economy and it was not the place of government to set prices.
“Maximising competition policy pressure is the right way to go – determining prices at a particular level is not something that any government of this country can do in a market economy,” Mr Rudd said today.
He said he would be concerned if banks lifted their interest rates further than the adjustment made by the Reserve Bank last month with a hint that squeezing families would be counter-productive.
“Can government of itself mandate what individual commercial banks do by way of their interest rates? No,” Mr Rudd told ABC radio today. “In a market economy banks will make their own determinations on that.”
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