AAP General News (Australia)
02-02-2000
Fed: Black day for consumers with prices up
CANBERRA, Feb 2 AAP - It will be a black day for consumers today with the price of
petrol, beer and cigarettes all set to rise, and analysts tipping another hike in official
interest rates.
With inflation beginning to rise, today's Black Wednesday excise increases will be
the biggest in over four years.
The petrol, beer and cigarette price rises occur automatically as a result of the federal
government's twice yearly inflation-linked excise.
For motorists, the hike comes on top of already soaring world oil prices, and will
automatically add 0.652 cents a litre to petrol prices, delivering a $200 million dollar
windfall to the federal government.
Motoring organisations last night branded the rise absurd and called on the treasurer
to freeze the increase ahead of the GST.
"What is even more absurd than this automatic and inflationary indexation, is that
the government has asked retailers not to increase prices before the introduction of the
GST, a request that they haven't apparently imposed on themselves," The Royal Automobile
Club of Victoria said.
South Australia's Royal Automobile Association said the rise meant for every $10 spent
at the pump, $5.77 would now go going straight to Canberra.
But even worse news is in store for home owners with the Reserve Bank set to lift rates
by at least a quarter per cent later this morning.
Business yesterday made a last minute plea for the Reserve to hold off, arguing the
rise could not be justified.
"What they (would be) doing is harming the economy now on the basis of expectations
they may have for the future," Australian Chamber of Commerce and Industry chief executive
Mark Paterson told AAP.
But economists said a rise was a foregone conclusion, and the only issue in doubt was
whether it would be a half or quarter of a percentage point.
AAP rft/ah/br
KEYWORD: ECONOMY DAYLEAD
2000 AAP Information Services Pty Limited (AAP) or its Licensors.
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