Vic: Brumby returns fire after Howard's salvo against states

AAP General News (Australia)
08-06-2007
Vic: Brumby returns fire after Howard's salvo against states

MELBOURNE, Aug 6 AAP - Victorian Premier John Brumby has defended the state's balance
of finances, as the war of words with Prime Minister John Howard heats up ahead of an
expected interest rate rise.

Mr Brumby said suggestions the Labor states were responsible for putting pressure on
interest rates were "a complete nonsense", adding the Reserve Bank of Australia (RBA)
was happy with state debt levels.

"Reserve Bank governor Glenn Stevens ... said he was completely relaxed about state
debt levels, that they are not an issue in terms of interest rates," Mr Brumby told ABC
radio.

"Debt levels today in Victoria are just a fraction of the debt levels that they were
50 years ago under (former premier) Henry Bolte.

"Our borrowings are lower today in real terms than when we were elected. When you look
at borrowings and when you look at what the states owe on super, our net real financial
liabilities today are miles below where they were when we were elected."

Mr Brumby said Victoria was paying off debt while at the same time investing in schools,
transport and new hospitals.

"All of the states have got triple-A credit ratings and far from putting upward pressure
on interest rates, in fact what the states are doing is investing in skills, investing
in infrastructure, investing in the things that are reducing the infrastructure bottlenecks
and putting up prices throughout the economy.

"If there's pressure on interest rates, it's coming from the federal government. This
would be the fifth rate rise since 2004 when John Howard promised to keep interest rates
low - five rises putting real pressure on family budgets.

"We're seeing the prime minister in a desperate pre-election vote-buying spree, travelling
around Australia trawling from marginal seat to marginal seat to find projects to bail
out.

"The public are saying, 'gee, 11 years, why the sudden interest?' But to point the
finger at the states, it's not about rational policymaking, it's about politics and it's
about desperation."

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KEYWORD: ECONOMY BRUMBY

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