Fed: Govt spending spree could push up interest rates

AAP General News (Australia)
12-06-2003
Fed: Govt spending spree could push up interest rates

Economists say the government blew $3.5 billion of taxpayers' money in the last five
weeks in a move which could put more pressure on interest rates.

In recent weeks, the government has announced a $1.5 billion boost to its Medicare
package and $200 million more for universities in a bid to get controversial reforms through
the Senate.

Access Economics says the big-spending government is not helping interest rates.

Other spending includes a boost to tourism, new childcare places, aid for the Solomon
Islands and a continued military presence in Iraq.

Australia's four biggest banks have announced they will pass on in full the second
quarter of a percentage point interest rate rise declared by the Reserve Bank this week.

AAP RTV kmh/sb/rh/rp/rh/wz

KEYWORD: ECONOMY (CANBERRA)

2003 AAP Information Services Pty Limited (AAP) or its Licensors.