Coalition legacy inflated

Prime Minister Kevin Rudd blames the Howard legacy on the current rise in inflation, quashing the former government’s claim to economic superiority. Many economists predict another rate rise next month. Rudd and Treasurer Wayne Swan met with the Reserve Bank board yesterday to find ways to deal with the situation.

New opposition leader Brendan Nelson reminded the public that the last Labor government caused an inflation rate of more than five percent while former treasurer Peter Costello ran the rate at 2.5 percent. Opposition treasury spokesman Malcolm Turnbull added that the new government was too soft on banks with regard to the issue.
 
Rudd claimed the government is keeping watch on the banks. "I think working families will be looking very carefully at the decision taken by the commercial banks on these most recent set of rises," he said. "[They] will be looking very carefully at the decisions made by the commercial banks outside the framework of the official interest rate structure laid down by the Reserve Bank."