Fed: Addressing skills crisis will help lower rates: Beazley

AAP General News (Australia)
08-25-2006
Fed: Addressing skills crisis will help lower rates: Beazley

SYDNEY, Aug 25 AAP - Federal Opposition Leader Kim Beazley says the government must
address the nation's skills shortage in order to lower interest rates.

Mr Beazley said Australians were spending a larger percentage of their incomes paying
off mortgages under the Howard government than under former Labor prime minister Paul
Keating when interest rates reached 17 per cent.

"The ordinary Australian mortgagee is paying more in terms of that percentage of their
income devoted to paying off their mortgage interest rates than they were under Paul Keating,"

Mr Beazley told Southern Cross Broadcasting.

"What Howard has done in the last election campaign when he led people to believe,
lying basically, that he would keep interest rates at record lows, a lot of them took
out even more money.

"People have gone and borrowed to the eyeballs and what that means is that every time
we get a 25 basis point rise now, the impact, in practical terms, or shares of people's
income being paid back to the banks, is higher than it was in Paul Keating's day."

Mr Beazley said the solution to lowering interest rates was to address the shortage
in skills and infrastructure.

"The Reserve Bank has been saying for five years what the Labor Party's been saying
for 10 - deal with the capacity constraints that are putting inflationary pressures in
the economy. And that is simply skills and infrastructure," he said.

"Now, this is not the Labor Party speaking, though it happens to be a traditional Labor
message, that is the Governor of the Reserve Bank speaking.

"(The government) just doesn't understand how critical those things are."

AAP acb/was/goc/it/bwl

KEYWORD: RATES BEAZLEY

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