Mortgagees punished as rich splurge, The Australian, 8 February, 2008.

Mortgagees punished as rich splurge: [1 All-round Country Edition]
Stapleton, John.ย The Australian; Canberra, A.C.T.ย [Canberra, A.C.T] 08 Feb 2008: 2.
Abstract
"Theย Reserve Bank are hurtingย theย people who can least afford it," he said. "In a worst-case scenario,ย theย economic sunshine ofย thelast 11 years will turn to sunset."
"If this happens,ย theย whole country suffers," he said. "Theย RBA's interest rate hikes have been a kneejerk reaction ... Once consumers stop spending, you lurch into a recession; small business starts struggling, unemployment starts increasing. Doesย theย Reserve Bank really suggest high unemployment isย theย policy we want?"
Full Text
RETAILERS and business groups have criticisedย theย use of interest rates as a "blunt instrument" for containing inflation, slugging heavily mortgaged middle-income earners but allowingย theย wealthy to continue spending.
Sydney Chamber of Commerce executive director Patricia Forsythe said there was legitimate and increasing concern thatย theย Reserve Bank's successive rate rises, 11 since 2002, were not havingย theย dampening effect intended.
"When it comes to fighting inflation, monetary policy is a very blunt instrument," Ms Forsythe said. "Despite international instability,ย theeconomy is fundamentally sound ... demonstrated byย theย strength of Christmas trading.
"Sydney has become a two-lane economy.ย Theย battlers have been stung by falling house prices and rate rises, butย theย wealthier regions are still experiencing solid house price growth. Only about a third of households have mortgages, so there are many households which aren't directly impacted by rate hikes."
Her comments were echoed by Retailers Association of Australia chief executive Richard Evans, who yesterday warned increasing interest rates affected onlyย theย minority ofย theย population who were heavily geared with high mortgages whileย theย rest ofย thepopulation continued to spend.
"Theย Reserve Bank are hurtingย theย people who can least afford it," he said. "In a worst-case scenario,ย theย economic sunshine ofย thelast 11 years will turn to sunset."
Mr Evans said reducing demand meant there was less money moving throughย theย economy, fewer jobs and more small businesses going toย theย wall.
"If this happens,ย theย whole country suffers," he said. "Theย RBA's interest rate hikes have been a kneejerk reaction ... Once consumers stop spending, you lurch into a recession; small business starts struggling, unemployment starts increasing. Doesย theย Reserve Bank really suggest high unemployment isย theย policy we want?"
Lisa Montgomery, head of consumer advocacy with finance group RESI Mortgage Corporation, saidย theย rate cuts were not havingย theeffect on spending they used to, and there was little evidence rate rises had slowedย theย economy.