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In a bid to keep the economy in surplus Prime Minister Kevin Rudd has warned voters that interest rates will rise in the coming months.
Mr Rudd said interest rates could start moving as early as December and expects the Reserve Bank of Australia’s (RBA)cash rate to be 90 basis points above its present low of 3 per cent by July next year.
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According to Mr Rudd, despite signs that the threat of a recession is easing, the government is not yet ready to call an end to the downturn and will push ahead with the remainder of its $77 billion stimulus program to guard against a spike in unemployment.
The government has said it will rein in spending in order to get the budget into surplus as soon as possible.
“Our primary objective is to sustain jobs, to keep people in employment, keep businesses open,” Finance Minister Lindsay Tanner said.
