Rising interest rates brought to you by Labor’s pre-election spend

Reserve Bank governor Michelle Bullock yesterday refused to make any comment to media questions about the role of government spending in the bank’s monetary policy board’s decision to raise interest rates.

Board of Directors expression he also noted the fact that “growth in private demand has strengthened significantly more than expected, driven by both household spending and investment.” So much for the argument that government spending crowds out private demand.

Really, what a crowd? The RBA can chart growth in private sector activity through monthly credit data for December, for example, which was published last week and showed loans running at 6.9%.