PM blasts Joyce over `risky` statements

Australia's political leaders should be working hard building confidence, not
jeopardising the recovery with risky and irresponsible statements, Treasurer Wayne
Swan says.
Prime Minister Kevin Rudd again lashed out at comments made by opposition finance
spokesman Barnaby Joyce that cast doubt over Australia's ability to pay its debt.
Mr Swan said his Liberal opposition counterpart Joe Hockey had also made a "complete
misrepresentation" of a Reserve Bank of Australia (RBA) document on fiscal and
monetary policy.
The political stoush came as new data on Wednesday showed an unexpected fall in
consumer confidence, which Mr Swan said reflected worries over the fragility of the
global economy.
The Westpac-Melbourne Institute consumer sentiment index slipped 2.6 per cent in
February, despite the RBA leaving the official cash rate unchanged last week when
another increase was widely expected.
Westpac chief economist Bill Evans said consumers were fretting over the prospect of
further interest rate rises in 2010, as signalled by the central bank.
A 6.5 per cent fall in the Australian dollar and a eight per drop in share prices
since the last sentiment survey, as global financial markets worried over debt
problems in Europe, probably also dampened the spirits of consumers, Mr Evans said.
Mr Rudd said perceptions of sovereign risk in European countries, led by Greece's
debt problems, had made markets extremely sensitive to negative comments regarding
sovereign debt.
As such, he said comments by Senator Joyce, casting doubt over Australia's ability
to pay its debt, were "reckless" and "risky in the extreme".
He noted comments by Citigroup economist Josh Williamson saying the senator's
comments were "incredible" and "absolutely irresponsible".
Australia's net debt is projected to peak at just 9.6 per cent of GDP in 2013/14,
"one tenth of the average of major advanced economies", Mr Rudd told parliament.
"What we have here is capital R - risk," Mr Rudd said.
"Risk represented in the leader of the opposition who says he has no interest in
economics.
"Risk in the judgment of the leader of the opposition in appointing Senator Joyce to
this position, but risk to the economy at large."
Mr Swan also accused the coalition of "serial sloppiness", saying Mr Hockey had
misrepresented a statement by RBA governor Glenn Stevens when he said the remarks
were aimed at the Rudd government.
The governor warned governments on Tuesday that central banks may not be so
accommodative if they did not cut their spending.
But, as Mr Swan pointed out, the statement in its introduction said: "For local
readers, we emphasise that the paper is not intended to provide any particular
message about current issues for monetary policy in Australia."
"So sloppy is our Joe, he hasn't even read that message," Mr Swan told parliament.
In response, Mr Hockey held up a map of the world, saying it "actually shows
Australia on it, the same Australia that he claims is excluded from it".
Other data showed demand for home loans fell for a third straight month in December
against a backdrop of rising interest rates and as the government's more generous
first home owners grant drew to a close.
Loans granted to owner-occupiers in December fell by a further 5.5 per cent, a
slightly larger drop than had been expected by economists.
First home buyers made up 21 per cent of all home loans granted in the month, its
lowest level since October 2008 and when the increased grant was first introduced.