Today’s interest rate cut have – as cuts do – no doubt been welcomed by Australians weighed down with a mortgage, but one prominent and wealthy Australian whose financial security is not under any such encumbrances has also found the news welcoming: Joe Hockey, our Treasurer. Here is Mr Hockey’s reaction:
“This is good news for Australian families and it’s good news for Australian business,” Mr Hockey told reporters in Canberra.
“The government is working hard to take the pressure off interest rates by keeping inflation low.”
Mr Hockey said the rates decision would lift business and consumer confidence. “The shackles are off the Australian economy,” he said.
It is a different Mr Hockey now that he’s Treasurer. Under a Labor Government interest rate cuts were considered bad, bad, bad.
We have sifted through the archives at The AIMN to see what Mr Hockey’s reactions were – and our accompanying commentary – when he was the Shadow Treasurer to a government who rode us through the Global Financial Crisis and oversaw numerous rate cuts. One thing stood out: he is all over the shop when it comes to talking about – or knowing about – interest rates.
Enjoy these gems from our archives . . .
With the announcement that the Reserve Bank is tipped to cut rates today, Joe Hockey has pounced:
Mr Hockey says the expected cut shows Labor has lost control of the economy.
But, he adds:
“Of course interest rates on average should be lower but if interest rates come down today it is because the economy is struggling, not because it’s doing well,” he told ABC radio on Tuesday morning.
Is it just me, or does the above statement make absolutely no sense or offer no logic whatsoever? Have I missed something? Or has Joe Hockey finally made it publicly clear that he has well and truly lost the plot?
I suspected all along that he lost the plot eons ago. His history of erratic announcements on interest rates confirm this. And no matter what happens to interest rates today, he will see it as a result of bad government.
The Prime Minister’s early announcement that the election will be held on September 14 relegates the recent Liberal Party’s Our Plan: Real Solutions for all Australians to the waste paper basket. It probably belonged there anyway; offering nothing but statements and bereft of strategies. They’ll be busy coming up with something more substantial over the coming weeks, one would expect.
I also expect they will retain this commitment from the Plan:
The Coalition will protect the Australian economy from economic shocks and create the conditions which keep interest rates as low as possible . . .
I wonder if Joe Hockey knows about this. Was he even consulted? Is the party aware that Joe has been telling us for some time now that interest rate cuts are a bad, bad thing?
Or maybe Joe was consulted about the Plan a couple of years ago when he trumpeted that interest rate cuts were a good thing.
After all, in August 2010 he told us he wanted them to come down:
. . . what I did say is I would want to see the Reserve Bank move further in cutting interest rates.
Then in September 2010 the thought of rising interest rates made him livid and it was all the Government’s fault:
The Gillard Government must accept the blame for higher interest rates.
History tells us that the rates were put on hold that month, incidentally. But Joe was livid nonetheless.
In November 2010 after a rate rise he was still livid:
Australian families were the victims of a government who was no longer talking about interest rate rises, childcare costs and other costs of living, Mr Hockey said.
Families would struggle to buy Christmas presents, he said.
“It hasn’t been the usual practice of the Reserve Bank to increase interest rates in December because that is like a body blow to the heart of retail in Australia.
“But that body blow has been delivered, it’s been delivered by the Reserve Bank, by the banks and it’s all come about by this government.”
Fast forward to his 2011 Budget Reply Speech a more relaxed Mr Hockey told Parliament that:
. . . this Budget does nothing to reduce the upward pressure on interest rates.
Funnily, however, there were no rate rises in 2011 up to the day of his reply. But he was about to get livid again.
On Oct 1 2011 in anticipation of an increase he pointed the fickle finger of blame at the Government:
Of course the Reserve Bank should not be increasing interest rates tomorrow, but if they do then it will be Julia Gillard and Wayne Swan’s interest rate increase because they have done nothing to address core underlying inflation pressures.
Guess what? They never went up. Nothing to blame the Government for after all. Good try though.
Like all hard working Australians he announced on Jan 27 2012 he wanted the RBA to cut rates:
“I think the Reserve Bank has the capacity to do much of the initial heavy lifting and to stimulate economic growth by reducing interest rates.”
And he alone could save us when on March 27 2012 he proudly announced that:
He would work though on realising lower interest rates that would prop up the finances of many Australian households.
But . . . when they did come down, on May 11 2012 he was back to his livid self:
. . . shadow treasurer Joe Hockey said the rate cut was a sign that the Government had lost control of the economy.
Yet he left us dumfounded on June 4 2012:
Opposition treasury spokesman Joe Hockey has conceded Australia’s economy is in reasonable shape and endorsed Wayne Swan’s commitment to returning the budget to surplus.
Speaking to an international audience on Bloomberg TV, Mr Hockey said Australia was vulnerable “like everyone else”, but its economic fundamentals were strong.
“Australia is in a better position than most other western nations,” he told Bloomberg’s Asia Edge program.
“We have an unemployment rate of around 5 per cent, we have strong demand for our commodities and even though they probably won’t get there we have a government that at least is promising to deliver a surplus budget.”
[yet] When the Reserve Bank lowered interest rates by 50 basis points last month, Mr Hockey said it confirmed the “weakness in the Australian economy”. In his budget reply he said economic growth under Labor had been “very poor”.
The very next day, after a rate cut he sniggered to the adoring media that:
The Reserve makes clear it is worried about Australia’s underperforming economy and deteriorating international conditions.
But before the month was over they were apparently going up according to Mr Hockey:
Well you know what’s interesting . . . we’ve been saying this for three years now, that if the government actually delivers a surplus then it’s going to take upward pressure off interest rates.
Which is good, because it fits in with his Nov 2010 prediction:
Australia is set for high interest rates.
And also in November that year after an increase he declared:
. . . the Gillard government and its ”insipidly weak Treasurer” owned the interest rate rises.
And when we didn’t get a cut he laments in June 2012 that:
“A week ago Australians were expecting an interest rate cut – now they are facing interest rises. That undermines consumer confidence, it undermines business confidence and it leaves Australians fighting higher prices.”
But when the rates went down on Oct 2 2012 it was back to the Government’s fault again:
The Reserve Bank has cut interest rates today not because the economy is doing well, but because parts of the economy are doing it tough.
And on Oct 10 last year he took on a dire tone:
Last week’s reduction in the cash rate, to 3.25 per cent, took it to levels only one cut away from the lows reached during the financial crisis. The Reserve Bank are cutting interest rates not because the Australian economy is doing well but because the Australian economy is deteriorating.
But also in October 2012 we learn he wished for an interest rate cut and his wish was rewarded. And he was happy:
Last Tuesday, at the Elmore Field Days, he called on the Reserve Bank to drop interest rates.
And lo and behold, an hour or so later, that’s just what the bank did.
So chuffed was Big Joe, he grabbed a tractor and raised it above his head, roaring King Kong style.
OK, it’s a toy tractor.
And when they don’t go down we get this statement on Nov 6 2012 to blame the Government for them being put on hold:
Joe Hockey claims the Reserve Bank did not reduce the cash rate because the economy is overheating:
‘This shows it is now manifestly clear that it is the policies of this government which are pushing up the cost of living and staying the Reserve’s hand in delivering further interest rate relief to home buyers and small businesses.’
Again in November last year:
. . . the carbon tax is going to make it harder to cut interest rates.
But he doesn’t like them being cut. Remember? It means the country’s in a mess and it’s all Labor’s fault.
Such as it was with this announcement on Dec 4 2012:
The Reserve Bank has today cut the cash rate from 3.25% to 3%. Clearly the Reserve Bank is trying to catch a falling Australian economy . . .
Followed by this the very next day:
The Federal Opposition says the RBA rate cut foreshadows tough times ahead for the Australian economy.
Coalition treasury spokesman Joe Hockey says the move shows the RBA is intervening to counter Labor’s big spending policies like the promised Gonski education reforms and the National Disability Insurance Scheme (NDIS).
But he’s not alone. When joined by his boss in June last year:
Alas, Hockey was (inexplicably) joined at that press conference by Abbott, which reduced the average economic IQ of the room by 20 points. Abbott proceeded to lay out his understanding of the rate cut. Abbott thought the RBA had cut rates because “economic conditions are soft. The stock market is down. Profits are weak. Retail sales are weak. The property market is down.” Glenn Stevens’ statement that the bank had cut rates because of “modest” domestic growth, a weakening international environment and low inflation was politely ignored.
Yep, it’s all the Government’s fault. It’s only good if cuts come under a Coalition Government. To repeat the old Liberal meme, here’s what Joe had to say back on Aug 9 2010:
Mr Hockey also argued “interest rates are always lower” under the Coalition – an argument described by Mr Swan as one of the “bigger distortions” he’s heard in recent times.
Laughable, isn’t it?
I like what Leigh Sales asked him on the 7:30 Report on Nov 1 2011:
So, how come when interest rates go down the Government never gets credit, but when they go up it’s always the Government’s fault?
Follow the link if you want to see his answer, but don’t expect anything intelligent. You won’t find it.
. . .
See what we mean? He’s all over the shop.
And to think that this hypocritical, incompetent economic buffoon is our Treasurer.
Frightening, isn’t it?