Wayne Swan budgets for interest rates cuts
Retail interest rates could fall further as a result of the Federal Government's plan to return its Budget to the black. Treasurer Wayne Swan said a surplus would give the Reserve Bank of Australia more room to cut official interest rates.
“Just as it was right to step in and support demand when it was needed, it's right now to be stepping back to provide space for the private sector to grow and to ensure the Reserve Bank has the flexibility to cut interest rates further if it thinks that is necessary. This is a key reason why getting the Budget back to surplus in 2012-13 is an economic imperative.”
In its most current forecast, the Government says that it plans to deliver a slim, $1.5 billion surplus next year.
Source: Herald Sun