Federal treasurer Wayne Swan has hit back at claims by the opposition that the fiscal policy was instrumental in the official cash rate rise.
Former treasurer Peter Costello suggested the stimulus policy was a ‘low quality’ outlay and said the government should have relied on higher welfare payments rather than discretionary spending.
However, Mr Swan has backed his decisions, citing the Access Economics report released yesterday which showed the stimulus policy had helped shield Australia from the worst of the recession.
Mr Swan said the coalition wanted to see interest rates stay at their 50 year lows forever, but “they cannot and those opposite know it,” he said.
The treasurer pointed to recent comments by Reserve Bank of Australia governor Glenn Stevens which suggested that interest rates had risen on the back of a recovering economy.