Govt rates claim ‘nonsense’: Ex-RBA boss

The former governor of the Reserve Bank, Bernie Fraser, has dismissed as “absolute nonsense” the Coalition's claim that a Labor government would mean higher interest rates. He said rates will rise whichever party wins government and warned that the Coalition had probably increased pressure on rates by spending down Budget surpluses when the economy was growing strongly.

Meanwhile, Opposition leader Mark Latham has signed a pledge to keep interest rates down if elected, saying a Labor government would keep Commonwealth spending under control and the Budget in surplus. Latham said his incentive to keep rates down was personal because all his family has mortgages and he comes from a mortgage belt. He also said he'd be happy for the Reserve Bank to report regularly on how a Labor government was easing pressure on rates.