EDITORIAL: Doom gloom interest rates, climate change and fuel prices

By: Chris Smith


Talk about shock treatment, fuel price to $8 dollars a litre in 10 years has to be the biggest endorsement

Talk about shock treatment, fuel price to $8 dollars a litre in 10 years has to be the biggest endorsement to invest in public transport infrastructure, but can the current fragile economic situation allow for this kind of investment?

Public transport advocates are calling for a $10 billion investment by the Federal Government, $5b from the AusLink 2 funding and $5b from the new $20b Infrastructure Australia fund.

In the last week or two massive announcements has shaken confidence in the economy including a recent CSIRO report on fuel and the Garnaut report on a proposed carbon trading scheme needed to combat climate change.

Interestingly enough the bus industry, under the guise of public transport is even getting support from the trucking lobby as it finally sinks in, more buses equals less cars, equals less congestion, equals greater productivity and a smaller net carbon footprint.

It’s interesting to see with the focus on mortgage stress and higher fuel prices banks have still upped interest rates before the Reserve Bank.

The question from the average Australian is why would you lift your rates when we are all struggling?

And alas, the answer lies somewhere in the rapid increase in base metal prices. The mining sector is boosting up the economy, everyone is still going relatively well and have adjusted their spending patterns, they are still spending the same amount, because things cost more, but discretionary spending on things people don’t really need has gone down.

For all intense purposes this uneven economy is sending mixed messages, everyone has tightened their belts but there is still a surge in job vacancies, the job market is still very much buoyant and businesses are still growing.

Some economists are even saying we have avoided the dirty "R" word and for the speculators no one has a clue what will happen next.

Despite the doom and gloom it still holds true that with higher fuel prices and resource availability the emphasis will turn to governments to supply people alternative transportation models and this will definitely mean an increase focus on public transport and a growth in the bus and coach industry.

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