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Reserve Bank governor Glenn Stevens has signalled interest rates are on their way back up with mortgage rates likely to edge up between half and a full percentage point.

Giving evidence to the House of Representatives economics committee in Canberra, Mr Stevens said the RBA’s focus continued to be on what mortgage rates were offered by commercial banks rather than on the Reserve’s official cash rate.

He said given the commercial banks had lifted rates over and above what the RBA had done, there was still about a half and a full percentage point to go before mortgage rates were back to what the Reserve would consider close to their long term average.

“There’s a little distance to go yet before I think you could characterise the setting of interest rates as normal or average,” he said.

The RBA surprised markets by leaving official rates on hold at its February meeting.

Mr Stevens said on top of the Reserve’s own lift in official rates, the commercial banks actions had effectively delivered three and a half interest rate rises to mortgages cases, and in the case of Westpac customers, four rate hikes.

He said one of the advantages of lifting rates as the RBA did in the last three months of 2009 was that it could hold rates in February and get a clearer picture of how the economy was travelling.

“You get that luxury when you can wait a little a bit further down the line,” he said.

Mr Stevens said Australia had performed much better than even the RBA had expected out of the global recession.

But he warned that meant the economy was now heading into an upswing stronger than otherwise would have been the case.

“With the economy having had only a mild downturn with begin the upswing with less spare capacity than would typically be the case after a recession,” he said.

“There’s less scope for robust demand growth without inflation starting to rise again down the track.

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said. 

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said.

Source www.thewest.com.au

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A GIRRAHWEEN man has  won $1 million from Wednesday’s Lotto draw – after he was mistakenly sold a ticket for the midweek draw.

The man, in his 40s, actually wanted a ticket in Monday’s Lotto draw, but was instead sold a ticket in Wednesday’s draw by a teller at Summerfield News & Lotto in Girrawheen.

When the sales assistant attempted to rectify the mistake by cancelling the ticket, the man insisted that the ticket not be cancelled.

“Please don’t cancel the ticket; it might be lucky,” he told the sales assistant.

His decision ended up winning him the entire Wednesday Lotto Division One amount on offer.

The man, who has been playing Lotto for five years, said that $1 million may not be much money for some people, but for his family it is.

“For us, its big money,” he said.

Whilst he was still coming to terms with the win, the man said his first priority would be to pay off his debts, and then he may consider building another house. His plans also included an overseas family holiday later in the year.

This was the third Division One Lotto win within the past week for WA and the 33rd Division One win for the state so far this year.

Tickets on sale for $30 million OZ Lotto jackpot draw

$30 million remains as the largest Division One amount ever won by a WA Lotto player and is up for grabs in Tuesday’s OZ Lotto draw.

Two Western Australians have won a $30 million Lotto prize in the past; the first, a couple from Leeming in 2001; the second, a university student in October 2007.

And, only last week the Western Australians have won a $30 million Lotto prize in the past; the first, a couple from Leeming in 2001; the second, a university student who for 10 months hadn’t bothered to check a ticket her father had given her as a gift. When she finally decided to check it, she became more than $13 million richer.

With OZ Lotto proving to be a ‘winning’ game for WA players, anyone who hasn’t already got a ticket in Tuesday’s $30 million OZ Lotto draw could put it on their weekend shopping list, or get a friend or work colleague to prompt them to buy their ticket before 6pm on Tuesday,” says Lotterywest spokesperson Jodi Eastman.

Lotterywest is unique in Australia in its role of returning its profits directly to the community through a grants program. Last financial year alone, over $205 million was raised for WA hospitals, sports, the arts and not-for-profit organisations

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