It’s not an easy job, being the Governor of the Reserve Bank.

Is it a bird? Is it an interest rate rise?Picture: Gary Ramage

Glenn Stevens may have the benefit of hundreds of boffins feeding him historical data about the performance of the economy. But at the end of the day, no-one can see into the future. Interest rates are set in the Governor’s gut and those of his eight fellow board members.

And my gut’s telling me they should cut next week. There have been three important developments since the board last met. First, commodity prices remain off their highs, boding ill for investment and jobs in the previously red-hot mining industry. In his last statement, Stevens observed commodity prices had “fallen sharply in recent weeks”. Indeed, the price of Australia’s biggest export, iron ore, had tumbled to around $US86 a tonne.

It has since recovered to around $US104 per tonne, but remains well below the $US140 levels of the start of the year. Meanwhile, the price of Australia’s other major export, thermal coal, is also languishing below $US90 a tonne, down from $US110 earlier in the year.

Recession in Europe and anaemic growth in the United States means lower demand for Chinese exports; which in turn means lower Chinese demand for the major input to their steel making process – iron ore. But in the face of this contraction in external demand, China’s options for stimulating internal growth - through another stimulus package – are more limited than during the global financial crisis.

Of the 4 trillion yuan of stimulus spending back then, only 1 trillion was funded directly from the central government’s budget, with nearly 3 trillion yuan coming from local governments who in turn borrowed the money from commercial banks. This backlog of debt means there is less room for rapid stimulus. Throw into the mix a delicate leadership change-over in the Chinese Communist Party and slowing in Chinese growth looks inevitable.

Lower commodity prices have dampened activity and jobs growth in the fast growing part of the Australian economy.

Meanwhile, the Australian dollar remains high, dampening activity in the already cool parts of the economy, like tourism and manufacturing. The total result is a general cooling in economic activity, paving the way for lower interest rates.

The Australian dollar is the second major reason why the bank can cut interest rates next week. Usually, you’d expect the dollar to fall with commodity prices. But the Australian dollar has remained stubbornly high. When the Reserve board last met, the dollar was falling back towards $US1.02. But the US government’s decision to stimulate growth in that economy by printing money has put downward pressure on the US greenback pushing the Australian dollar back up to around $US1.04.

The perception of Australia as a relative “safehaven” for investment has seen demand for dollar-denominated assets like Australian government bonds soar.

A higher Australian dollar makes it easier for the Reserve to cut interest rate cuts in two ways; first, by exerting downward pressure on inflation (by making imports cheaper) and second, by dampening growth by Australian non-resource exporters and firms competing against cheap imports.

The high Aussie dollar is a foot on the throat of both inflation and growth, allowing the Reserve Bank to ease up a little on interest rates.

Finally, the Reserve Bank will take into account planned cuts to government spending at both state and federal level, and the impact this will have on reducing demand in the economy.

The Treasurer, Wayne Swan, has confirmed the government will cut spending to achieve its budget surplus in 2012-13. Some have criticised this as “pro-cyclical” fiscal policy – that is, cutting spending into an economic downturn.

Much depends on the size of the required cuts. Out of economic production worth $1.4 trillion a year, government cuts of $5 billion a year would remove just 0.3 or 0.4 percentage points from growth, which is manageable. Cuts of $20 billion a year would lop off a massive 1.4 per cent from growth. But spending cuts of such magnitude are not yet required.

With economic growth still at around trend, getting the budget back into surplus is the prudent thing to do. If the GFC taught us anything, it’s that governments are pretty bad at balancing the books.

If the government can do so now without sacrificing worthy policies, let them.

State governments too have caught the cutting bug, merrily slashing into front line service jobs. This helps to restore balance sheets, but results in higher joblessness.

Fortunately, there is a solution: lower interest rates.

When the dollar is already too high, a better policy mix is to have tighter budget settings and looser monetary policy. Lower interest rates would ease upward pressure on the currency and give relief to trade exposed parts of the economy.

And if the political bickering over government debt and surpluses shows anything, it’s that the job of managing short term demand in the economy is best left in the hands of an independent, and altogether less hysterical, Reserve Bank.

The only real thing arguing against a cut next month is the fact that unemployment remains historically low, leaving the door open for higher wage demands which fuel inflation. It would be unusual for the Reserve to cut interest rates at a time when the jobless rate was steady, or, indeed, falling a bit.

But these are unusual times. The pace of jobs growth has in fact slowed markedly, the low jobless rate made possibly only because of a sharp drop in the number of people looking for work.

On balance, the prudent course would appear to be a modest 0.25 percentage point cut to the cash rate when the board meets next Tuesday.

Of course, it’s anyone’s guess as to how much the big banks would actually pass on.

Twitter: @Jess_Irvine Email:

Comments on this post close at 8pm AEST.

Most commented


Show oldest | newest first

    • D Glass says:

      06:53am | 26/09/12

      How much cut passed on?
      Well, the Reserve Bank takes bank discount into account in setting the rate.

      Employment growth soft, Unemployment low and steady:
      True. As much due to the recent soft trend in working hours as anything else (ABS Labour Force August). These days, that’s employers prudent and flexible response: rather than slash jobs, reduce hours for a time.

      The big picture:
      In the nature of things, ABS Labour Force stats are inevitably of the “lagging indicator” sort. The numbers show how the economy was, over recent past months.

      In contrast, the Reserve Bank aims to look forward, to the longer term, and to look through short term volatility or even short term softness.

      Too early to say at present, but one of the better “leading indicators” of national employment (DEEWR, Sep) has recently started to hint at growth above trend in coming months.

    • Alfie says:

      07:52am | 26/09/12

      Glenn Stevens will do whatever his Labor masters tell him to do.

    • What's it all about? says:

      08:41am | 26/09/12

      To the blind everything is about politics.
      Take this clown for example

      If his wife leaves him it will be Labor’s fault.
      If he slips on a banana, labor put it there.

    • D Glass says:

      09:02am | 26/09/12

      Stevens has been on the RBA board since 2001 - a Howard/Costello appointee.  Made Governor & Chairman in 2006: by Howard/Costello.


    • Alfie says:

      09:32am | 26/09/12


      Not quite correct. If my wife leaves me, it will be her fault. All the rest is Lavor’s fault.

    • john says:

      04:48pm | 26/09/12

      @What’s it all about?

      If he slips on a banana, labor put it there.
      or did he eat the banana already and clumsily dropped the peel there for labor?

      see @23 secs and try not to burst out laughing - lets call her Julia!

    • Tubesteak says:

      07:52am | 26/09/12

      The thing is if he drops them now and things don’t turn out to be as bad as we believe they may turn out to be it could have disastrous consequences if he needs to raise them a little further down the track.

      I think we should wait until the threat is bigger and closer and see if there is real danger. A pre-emptive strike may see us taking a gun to a knife fight against a little old lady.

    • Get rid of both parties says:

      08:44am | 26/09/12

      Threat is bigger?

      Retail has collapsed.
      Mining is over. 200k truck driver here, 10k Mongolia.
      Most expensive RE on the planet.
      Manufacturing, long gone.
      Producing assets all sold.
      Welfare out of control.
      Grossly reduced government revenue.
      Continuing populating.
      Highest personal debt in the world.

      We’re broke and there’s nothing that will stop the pain that’s coming.

    • Tubesteak says:

      12:07pm | 26/09/12

      Retail has collapsed? - tell that to the people that are lining up to buy iPhones. Do you have evidence that across all sectors (including online) that retail has collapsed? I doubt it.

      “Mining is over. 200k truck driver here, 10k Mongolia”
      While commodity prices for certain things have dropped recently there is an expected commodities supercycle on the horizon.
      It doesn’t matter if an Australian truck driver earns a lot here compared to Mongolia. The Australian truck driver has to work in Australia because that is where it is required. While some mining companies are laying people off this is a short-term cyclical event.

      Most expensive real estate? So what? Only matters to you if you are forced to buy or sell. The rest of us are happy to ride along with it. It doesn’t mean much for the economy or interest rates how comparatively expensive property is. I’m sure you can go and live in Nevada if you don’t like Australian house prices.

      Manufacturing should be gone. There’s no point paying an Australian $50 per hour when you can pay an Indian $0.25 per hour. Not like Australia was ever producing anything that ever required a great deal of skill. Nor will we ever. Even Apple makes their stuff in China because labour is cheaper. Not even Germany manufactures all their luxury cars in Germany. They farm them out to cheaper or more geographically appropriate locations and all the sheep continue to pay premium prices for their 3 series’. Only the upmarket models are made in Germany. Australia will never produce an equivalent car to a top-range BMW/Mercedes/Audi/VW.

      “Producing assets all sold” - which ones do you refer? Who bought them?

      “Welfare out of control” - blame the middle class who got hooked on Howard’s vote-buying for this. Not that it means there’s not an imminent threat. Nor does that fuel a need to cut interest rates.

      “Grossly reduced government revenue” - please provide the total stats on this. You’ll be surprised how little it has fallen. BUt depends on where you pick the peak….

      Population is continuing to increase with time. You can’t stop people from breeding. This isn’t a problem. We always rearrange our inputs to suit our needs along with technological advancement and cost of input. How much was a litre of petrol back in 1850…..?
      Hopefully you’ll see the point

      Debt and broke?
      Which one is it?
      Debt is fine if it is for an asset. Most of our debt goes on our homes. Homes are tax free and the trend over each decade is for house prices to grow. Especially with a growing population and low construction quotas.
      Recent stats show that most of us are in front of our mortgages. So it’s not really a problem.
      Debt is only bad if it is to fund personal consumption. Our credit card debt is about the same per person as it was back in the 90s. No real problem there.
      Government debt is at 8% of GDP. Credit rating is AAA. US government debt is over 100% of GDP. UK debt is over 90% of GDP. Our government can afford more debt if necessary but at this stage more fiscal stimulus isn’t necessary. We’re not in boom but that doesn’t mean it’s all bust. It’s that nice cruising level that we like.

    • bobagorof says:

      12:32pm | 26/09/12

      @Get rid of both parties:  I’m surprised the sun is still shining today, what with the sky having already fallen and all…

      None of those things happened in the last month.  Or the last 2 months.  The RBA didn’t think it was Armageddon then.  But if you disagree, maybe flee to Europe while there’s still a functioning airline service.

    • glenm says:

      12:44pm | 26/09/12

      @ Tubesteak,
      ” It’s that nice cruising level that we like” 
      Dont presume to speak for everyone with blanket statements such as this. What you descirbe as a nice cruising level is to me the worst period of economic activity in the past 20 + years. The building industry is flatlining, planning for new residential and commercial development is virtually non existant. As someone involved in the early stages of the development process, I am certain that the lack of activity now will become more evident in the future as those projects underway wind up. The reserve bank shold have cut interest rates long before now and further than the suggested .25 points.

    • Get rid of both parties says:

      12:55pm | 26/09/12

      Every single thing you’ve written Tubesteak relies on our resources being the worlds sole source.

      They are not.

      In addition they’ve been sold.

      Everything you’ve written is everything that’s wrong with Australia. It’s completely, utterly and without doubt unsustainable.

      It is completely illogical to think we just consume while the emerging economies continue toiling for our benefit. It’s ending. It’s over. Re read what you’ve written and imagine how someone like me absorbs it. We’re doomed.

      Finally, why or how do we get to earn ten times (20 times in the truckie case) what our competitors do?

      We can’t, it’s simply not possible in the long term. When things even out, and they will, our debts will be ten fold what they are now, housing will collapse to a tenth today’s value. There is nothing more certain, things will be changing within the next decade or two and our ridiculously indulgent lifestyles will die a terrible death.

      We wanted globalization and thought we’d be the sole beneficiaries. Hilarious how naive and dumb we are.

    • Tim says:

      01:02pm | 26/09/12

      could that be because the building industry gorged itself on unsustainable growth and profits for years and are now complaining that things are getting back to a more normal level?

    • john says:

      01:34pm | 26/09/12

      @Tubesteak “lining up to buy iPhones”

      - economy isn’t a measure of how long the line is to buy an iphone!

      Shop-front retail is in steep decline as internet purchases to escape taxation & rents has sky-rocketed.  Labor has sat on its hands to tax on-line purchases under $1,000 and a levy to nneds to be added to the online site holder to pay taxes that would have been normally due to society had it been a shop front.

      People will hate me for say this but online shopping is just one GIANT TAX AVOIDANCE racket.

      “While some mining companies are laying people off this is a short-term cyclical event.”

      Actually it is not, China has softened over 66% in the last 5 years

      Mining &energy; is now sourced from cheaper nations, the current “market adjustments’ in share price is a reflection of these changes.

      “Most expensive real estate? So what? “

      true - however Australian house prices have not adjusted to the current overall economic conditions, because we still think we are riding a mining boom. In fact the rug has been pulled from under our feet we just don’t realise it yet.

      “Manufacturing should be gone.”

      Not really a good idea, e.g Mitsubishi closer in Adelaide created pain on many levels, in the say way I remember Chrysler did, its Australia’s Achilles heal to surrender manufacturing.

      “Welfare out of control”

      At least you got this right, only because immigration exacerbated this.
      The idea of immigration is to produce human energy to grow an economy not to syphon it. Wealth re- distribution creates apathy and co dependence and over time is actually worse. Like drug addiction.

      Debt and broke?

      Perhaps both - soon, the only thing saving this country as the mining boom with all engines out - comes in for a crash landing with no manufacturing to cushion the blow to make it a smooth landing is Australia’s low debt.

      All assets of any significance have been sold to defend against any shocks.

      However the financial economic firewall is now being ‘attacked’ as it has been extensively plundered by generous bribing governments wishing to buy popularity. if this firewall collapses then it gets ugly.

    • Ozymandias says:

      03:24pm | 26/09/12

      @ John: Actually, no, Online Shopping is a direct result of the same globalisation phenomenon allowing companies to offshore labour costs. They have been doing this for years, and when we finally start offshoring our purchases, THAT is when they realise it is a Bad Idea?

      Got no sympathy for the lot of them. If it is OK for employers to offshore jobs, then it is OK for consumers to offshore purchases. End of story.

    • glenm says:

      04:11pm | 26/09/12

      @ Tim,
      If your definition of “normal” is zero growth then you may be correct.  I hope you are happy with your “normal ” levels as they lead to increased unemployment and a lower standard of living. You can be critical of the building industry if you like but activity in that sector fuels not only , developers but , architects , town planners, lawyer’s , surveyors, accountants, carpenters, brickies, painters,  suppliers etc etc. .. My issue with comments such as Tubesteak and yours is that you have no understanding of the current state of the market, probably about as much as does Glenn Stevens.

    • john says:

      04:32pm | 26/09/12

      “Actually, no, Online Shopping is a direct result of the same globalisation phenomenon allowing companies to offshore labour costs”

      Yes yes there’s that too…but PAYG,payroll, GST, company taxes avoided too?

      Of the $11.7 billion of total online sales.  ~1.0 billion in missing GST approx?

      Say if those sales were to be generated from Australian manufactured goods instead of cheap alternate imports isn’t that 30% tax or approx ~3 billion in tax avoidance or missed tax income from profits?

      lets say labour costs were half of what’s left say 3 billion that’s another billion in PAYG not generated by local employment to be collected.

      So you see as I said before its primarily a huge ’ tax avoidance’ racket, directly and indirectly, consequential & inconsequential everything else is secondary.

      So then ask yourself is it fair the ‘suckers’ running the shop and the suckers manufacturing in Australia that pay all the taxes to scratch a living whilst the consumer pulls the rug from under them to save a buck?

      Whilst online stores cheat the system, don’t get me wrong Im guilty of online shopping its great! But is it fair is it right. well yes and no.

      Is it fair manufacturers move offshore and sell back to the punters here in OZ.

      Is it fair the shop fronts that struggle to scratch a living are cheated of a fair chance, whilst customers go to use and abuse them to get the item number and try on for size then only to go home and buy cheap online, whilst their online cousins don’t pay taxes and they do?

      Are Australian consumers going to shoot themselves in the foot when the retail economy eventually collapses, jobs evaporate and stores like David Jones and Myers contemplating closing stores around the country?

      Obviously a more level playing field is required, however since we are ruthless competitive species I’m betting that online will win and stores will close because the government is spineless.

      I’ve got my pop corn out watching it all play out now with manufacturing looking like a ghost town, and bricks &mortar; retail looking more like a one too & mining caput…whats left- just us online retail whores?

    • Get rid of both parties says:

      07:54am | 26/09/12

      Interest rates won’t and in fact can’t make a difference. We’re broke. Having sold all our assets including mining and manufacturing. Australians live in la la land.

      Thanks to our greed and stupidity, we are globalised and compete with countries earning a quarter what we do on the dole. Worse, they now own what used to produce the money.

      We stupidly continue populating which dilutes what’s left. Where will the money come from? Why have we failed to learn anything.

    • Expat Ozzie says:

      09:51am | 26/09/12

      Get rid of both parties: Are you one of those Doomsday preppers? I love that show!!! My favourite doomsday scenario is the Yellow Stone Super volcano a guy in New York thinks is going to explode.  What’s your one? Is it total economic collapse or over population?

      P.S the world really isn’t ending. Were just going through the usual hangover after the boom times. 10 years time and the next boom will be starting again. Chill out dude!

    • Get rid of both parties says:

      10:29am | 26/09/12

      Expat Ozzie.

      No, that was how things worked before we sold everything.

      Where will the income come from?

      Have a go at answering that while considering 85% of mining’s foreign owned, manufacturing’s dead.. Without selling more of Australia and deferring the pain again to be felt even harder by our kids kids. How will we recover.

      Have a go at answering my points. You’re wrong, we will not recover. It’s over.

      I’m not a pessimist. I’m a realist and I’m an investor. I’ve made millions from having brains, conviction, knowing what’s going on and most often betting against the herd. My investment head has been screaming at me for a long time “doom will soon be here”. We cannot recover from the past few generations of extreme excess. I’m more confident of this than in any investment I’ve ever made. I hope I’m wrong but I’m not.

    • GigaStar says:

      11:04am | 26/09/12

      Get rid of both parties “I’ve made millions from having brains, conviction, knowing what’s going on and most often betting against the herd.”

      A monkey could have money in the boom before 2008, it wasn’t that hard.

    • Get rid of both parties says:

      11:36am | 26/09/12



      The Monkey’s didn’t get to keep it after that though.

    • Esteban says:

      12:13pm | 26/09/12

      Expat Ossie. We are not going through the usual hangover after the boom.

      The usual hangover is the economy bottoms out, assett prices fall, interest rates fall and the Govt goes into deficit to stimulate the economy.

      Low assett prices, low borrowing costs, the Govt spending money (hopefully on infastructire) confidence returns and investors and business people come out of the bunker and the whole cycle starts again.

      In this cycle something quite different has happened. The stimulas package was desingned to prevent the bottom of the cycle rather than accelerate away from the bottom.

      Asset prices have not collapsed, interest rates are still highish but more importantly there is still a sense that the bottom is still to come.

      Investors and busniness people are still in the bunker waiting for the bottom.

      Compound this with the fact that there is no money left for stimulas to help with confidence.

      You can’t accelerate away from the bottom if you haven’t reached the bottom yet. For many people investment decisions that could grow the economy are on hold until there is some certainty on this.

      I think it is a bit over dramatic to describe that uncertainty as a doomsday scenario but I also think it understates our position to describe it as the usual hangover.

    • Mahhrat says:

      08:00am | 26/09/12

      The bald fellow on the TV this morning was talking about how we’re currently “saving”.

      I think we’ve finally wizened up to the idea that “Debt Is Bad”.  In a private sense, I fear that it’s true.  Certainly, I’ve got my mortgage but nothing else and I’ve never been less stressed in my life. 

      I’m not giving into impulse buying as much as I used to.  My daughter, at 13, is even more money conscious, and refuses to buy anything until she has the money. 

      I reckon it’s fantastic.  We’ve stopped spending beyond our means.  I look forward to it continuing.

    • Get rid of both parties says:

      08:23am | 26/09/12

      Too little too late.

      We’ve spent all the money of not only our generation but that of your daughter and her daughters daughter.

      The changes we’ve all made are because we’re broke. Not anything to do
      with discipline. We continued voting for whoever gave us the most right now with zero regard for the future and unfortunately the future is now here.

    • Budz says:

      08:45am | 26/09/12

      Great to hear Mahhrat. It’s good to hear from people that are in control of their finances and aren’t living beyond their means.

    • Al B says:

      09:08am | 26/09/12

      I wonder too if a downturn is the right time to encourage more debt via central banks contriving lower rates. Isnt easier credit and the malinvestment that follows part of the problem. They say central banking is the only game in town….i guess if the aim is false wealth via a consumption/debt binge economy…i prefer to change my habits too Mahhrat. Live to our means. Business should do the same. Easy debt is now what makes the world go round. A sick economy if u ask me….

    • Mahhrat says:

      10:06am | 26/09/12

      @Budz: Cheers mate.

      It’s a daily struggle.  I would love a new TV, a wagon to transport the dogs in, and to put cladding on my house.

      The last is the priority, so we save save save.

    • St. Michael says:

      04:10pm | 26/09/12

      @ Mahrat: It would be cool if we could now convince our governments to stop spending beyond their means, too.

      But people don’t want governments to stop spending beyond their means.  Look at what happened in Queensland when the government tried to do precisely that.  Look at what’s happening in Greece even in spite of the fact they *have no choice* but to stop the government spending beyond its means.

      We are colossal hypocrites if we faithfully squirrel away our dollars and cents at home if that money is generated by overgenerous largesse from the public treasury.

    • Get rid of both parties says:

      08:02am | 26/09/12

      Growth? Hilarious.

      Our present living standard will be enjoyed by the new owners of Australia. The ill named emerging markets.

      We’ve been played like the greedy fools we are.

    • Knemon says:

      10:27am | 26/09/12

      “the greedy fools we are”

      ...and whose fault is that?

    • Get rid of both parties says:

      10:44am | 26/09/12


      Um. The greedy fools fault.

      I’d suggest it’s Labor who mistakedly told us and led us to think we could have it all. LNP would then fix Labor mess and then start feathering business.

      Both parties have over populated and sold assets. Both have led us to disaster that has just started. Have we learned anything? We’re still doing both. So we’re greedy dumb fools.

      Ultimately though it’s the greedy fools that voted for either of these horrendous parties.

    • wakeuppls says:

      08:04am | 26/09/12

      How can 8 guys know the best policy for an entire nation’s economy?

    • Giraffe says:

      09:16am | 26/09/12

      How many do you suggest wakeupppls?

      These are 8 people who know a thing or two about economics, unlike the 150 or so we have in our federal parliament.

    • Get rid of both parties says:

      09:24am | 26/09/12

      An even worse scenario.

      Vote for the party that spends the most, sells the most, gives the most. a certain path to poverty and it happens to be the path we’ve been on.

      The alternative is if we were all smart, frugal and disciplined. We are not and the results of that are just starting to appear now. The end result will be horrendous poverty never before seen in a western country.

    • D Glass says:

      10:00am | 26/09/12

      “8 Guys”:
      Nine. Chair plus members.
      Guys: 6 men, 3 women.

      How can they know:
      Firstly, the Governor and Dputy Governor of the RBA, and the Head of the Tresury, are all permanent members - they have all the resources of the RBA and Treasury to draw on. As a whole, the Board have their own expertise and that of the various other bodies they represent.

      Secondly, the RBA and its Board is hardly the one and only source of economic analysis and advice, for goodness sake.  The RBA has an independent role in setting *monetary* policy, via the cash rate, aiming for low inflation and employment growth in the longer term.

      The Treasury has the primary role in *fiscal* and macro-economic policy advice (budget outcomes, revenue and expenditure in the broad, and economic forecasting in the short, medium and long-term).

      The current members of the Reserve Bank Board are:

      Chairman: Glenn Stevens
      Governor since 18 September 2006
      Present term ends 17 September 2013
      Chairman – Payments System Board
      Chairman – Council of Financial Regulators
      Member – Financial Stability Board
      Deputy Chairman: Philip Lowe
      Deputy Governor since 14 February 2012
      Present term ends 13 February 2019

      Martin Parkinson PSM
      Secretary to the Treasury
      Member since 27 April 2011
      Member – Council of Financial Regulators
      John Akehurst
      Member since 31 August 2007
      Present term ends 30 August 2017
      Director – CSL Limited
      Director – Origin Energy Limited
      Director – Securency International Pty Ltd
      Director – University of Western Australia Business School
      Jillian Broadbent AO
      Member since 7 May 1998
      Present term ends 6 May 2013
      Chairman – Reserve Bank Board Audit Committee
      Member – Reserve Bank Board Remuneration Committee
      Chair – Clean Energy Finance Corporation
      Director – ASX Limited
      Director – Woolworths Limited
      Chancellor – University of Wollongong

      Roger Corbett AO
      Member since 2 December 2005
      Present term ends 1 December 2015
      Chairman – Reserve Bank Board Remuneration Committee
      Member – Reserve Bank Board Audit Committee
      Chairman – Fairfax Media Limited
      Chairman – Mayne Pharma Group Limited
      Chairman – PrimeAg Australia Limited
      Director – Wal-Mart Stores Inc

      John Edwards
      Member since 31 July 2011
      Present term ends 30 July 2016
      Adjunct Professor – John Curtin Institute of Public Policy, Curtin Business School, Curtin University
      Adjunct Professor – University of Sydney School of Business
      Visiting Fellow – Lowy Institute for International Policy
      Member – National Workforce and Productivity Agency

      Heather Ridout
      Member since 14 February 2012
      Present term ends 13 February 2017
      Employer Director – AustralianSuper Trustee Board
      Director – Sims Metal Management
      Member – Climate Change Authority
      Member – National Workforce and Productivity Agency
      Catherine Tanna
      Member since 30 March 2011
      Present term ends 29 March 2016
      Member – Reserve Bank Board Remuneration Committee
      Chairman – BG Australia
      Member – Gold Coast 2018 Commonwealth Games Corporation Board

      Hardly a bunch of rank amateurs, eh.

      On interest rates, the RBA is looking to the longer term, both nationally and internationally, in setting the current rate. Their independence of the Gov’t of the day isn’t seriously in question.

      And at the end of the day, the elected gov’t - of whatever flavour - makes up it’s own mind on what’s in the best interest of the country, on budget and broader economic policy -  drawing on Treasury, RBA and other advice.

    • wakeuppls says:

      12:19pm | 26/09/12

      Let the market set interest rates. I don’t really care how long and illustrious a few guys careers are, they don’t know at what rate a bank should loan to any and all individuals.

    • Joan says:

      08:43am | 26/09/12

      Reading your piece makes me realise that nothing safe about world economics and nobody really knows what they are doing or knows true value of anything. Interest rates up and down , a stimulus here and there. printing of dollars, dollar up and down on whim add to that. alogorithmic trading . carbon trading.- phoney economic schizophrenia   Somethings gonna bust and its more than Swans budget.

    • Get rid of both parties says:

      09:38am | 26/09/12

      I agree entirely Joan.

      After decades of successful investing, It’s over. Everything will be worth far, far less than now. I’ve invested in gold and silver and I’m even thinking about getting out of those.

      Home owners will be smacked like nothing ever seen. All paradigms we’re used to are finished. Everything that used to produce income have been sold, dismantled gone. All we do is consume and thought other countries would be happy toiling while we gorged ourselves. How were we so collectively dumb?

    • HC says:

      12:06pm | 26/09/12

      Ah doomsayers, they’re so delightful in their glass half-empty world.  The economy’s just money, hardly a complicated thing since it’s all built on maths and maths is an absolute science.  If you have trouble with maths and if you sneer at logic you’re never going to understand the economy but those of us who find maths enjoyable find it very simple to understand.

      The only complication is people’s behaviour but people are predictable 99.9% of the time so they’re a bit of a non-entity.

      But I do enjoy the unsubstantiated and unsupported whinging about how the world is going to end if the economy crashes smile  what you forget is while what goes up must inevitably come down the opposite is also true in economics, what goes down will eventually head back up, usually to a higher mark than before.  Over a long enough time period (several lifetimes usually) the net result is a very small improvement.

    • Get rid of both parties says:

      12:39pm | 26/09/12


      It’s very clear to me you’ve got no idea of what’s going on.

      Use your Maths to work out how we’ll feed 50 million people with far less food.

      I wish I knew you personally, I’d offer you ten to one I’m right and that you’ll be the first to be wringing when everything you thought was right turns out wrong, you’re broke and starving.

      Let me guess, you have a mortgage? An investment property?

      Economy and numbers. You’re surely joking. You mean a manipulation of numbers to support an agenda.

      People like you make me cranky. I’m no half glass empty pessimist. I’m a person able to see when I’m being conned and when Those around me are bringing us all down. That’s the difference between you I.

    • I've got a tulip to sell to you says:

      12:46pm | 26/09/12


      You overestimate the efficacy and predictive power of empiricism. No, economics is not a hard science; it is a social science.

      “...what goes down will eventually head back up, usually to a higher mark than before.”


      Some things NEVER go back up, e.g. currency collapses, organisation collapses; empires and kingdoms perishing never to rise again. Jobs and industries that are rendered technologically obsolete. Banks and stock exchanges have irretrievably collapsed in the past and this will happen again in the future.

      Funny you mention the economy is “just money”... what happens when said money is debased??

      Ah the fanatical optimists, they’re so delightful with their heads in the sand.

    • HC says:

      01:36pm | 26/09/12

      Actually GROBP not one red cent of debt on me and loads of disposable income too.  And I’ll answer your facetious question of how do we feed 50 million people with less food with an equally facetious answer in 2 parts, one is increased productivity, 2 is we’ll all be forced to eat less, which given the number of fatties and the amount of food that is wasted in this country isn’t necessarily a bad thing.  There is a third option of course but cannibalism is usually a last resort.  Thankfully after all the weak people are eaten it’s usually the cranky jerks on the menu next though why anyone would want to eat something so tough and stringy and stewed in its own bile is beyond me smile

      @I’ve got a tulip

      I never said economics is a hard science I said it’s a mixture of hard science (maths) and people.  I believe that qualifies it as a social science.  And all the things you’ve mentioned collapsing are merely parts of an economy they are not the whole economy which still exists after all these things in some form or another.

      For example WW2 was perhaps the most economically devastating event to ever occur in history (on the back of the Great Depression no less) yet the economy in general still existed afterwards and still recovered over time higher and better than before.  Am I wrong?  Some parts of the economy never recovered but like anything in this world the strong survive, the weak and obsolete perish.

    • I've got a tulip to sell to you says:

      02:27pm | 26/09/12

      Wow, so you totally ignore the point where entire civilisations have permanently collapsed in the past; NOT just the constituent parts of their commercial realm.

      No mention of the part where I obliterated your observation that ‘what goes down must go back up’.

      There is no recovery of the Byzantine economy, it is irretrievably gone!

      But coming from someone who thinks people are a ‘bit of a non-entity’, I’m not surprised by the red herrings and straw mans in your response.

    • Ozymandias says:

      02:59pm | 26/09/12

      Our public infrastructure has been built across generations by taxation, yet it is all being sold in less than one generation. Most of our country is desert, it cannot sustain the population we have right now without massive environmental degradation. We have sold our land, our industries, our infrastructure to foreign interests for a pittance with this ‘globalisation’ lunacy. I agree with ‘Get Rid Of Both Parties’. The same writing is on the wall for us as was on the wall for myriad other cultures across eternity. And for all our vast accomplishments, we are as blind now as they were.

      It is probably not too late for us to start heading back from the brink right now. But I truly believe that, like little children in kindergarten, our Alleged Leaders will still be arguing over pointlessly irrelevant stupidity in another 100 years. At what point does it become too late?

    • Get rid of both parties says:

      03:02pm | 26/09/12


      I think you’ll find the most economically destructive and unfortunately terminal thing is selling all our producing assets and over populating Australia.

      All our advantages are gone.

      How is having less to eat, if you’re normal weight a good thing?

      How positive will life look when kids and weak around you are starving? Did you really think all that stuff through, or were you just in a positive halo?

      Sometimes It’s good to be negative. It might have saved us from what’s coming.

    • Anubis says:

      09:04am | 26/09/12

      Why is Glenn Stevens still the Reserve Bank Governor. With more and more evidence coming out that he deliberately misled a Senate Committee and Parliament about the Securency bribery activities shouldn’t his job be quite tenuous now? At the least he should step aside until his role in the activities has been clarified.

    • Babylon says:

      09:08am | 26/09/12

      If Swan had of done his job we would not have this nonsense from the Banks about passing on interest rates. Under Regulation the Banks would have to pass the rate cuts on to us.

    • wakeuppls says:

      12:22pm | 26/09/12

      Would you want a bunch of unelected bureaucrats setting interest rates for every lending institution in the country to a “T”? I know I wouldn’t want a 1% interest rate on my savings with 10% inflation. That’s how incompetent and/or corrupt the RBA is.

    • Babylon says:

      09:25am | 26/09/12

      We can expect more interest rate cuts now that the Gillard Government has destroyed our Mining boom.

      Carr said the Australian Mining Boom was not important to the Australian economy, well we know indirectly it has a massive impact.

      Carr said our Mining Boom is so full it has spilt over into Africa. Well we know thats not true because everyone knows its in decline.

      Swan said ‘high commodity prices’ had slowed the Mining Boom and now he had to re do a Budget he only did 4 months ago! He conceded he was $44 Billion short, when previously he said there was no Budget black holes.

      Ferguson said months ago the Mining Boom is over.

      BHPs Kloppers told London investors MRRT and Carbon tax have made Mining investments in Australia difficult.

      So where has our precious Mining Boom gone?

      Answer is the Gillard Government has driven it away to Africa.

      In two Quarters, Reuters reported African Mining moving from minus 16.8 percent decline to plus 32 percent growth!!

      Obviously, Swans ‘commodity prices’ have not affected the new African Mining Boom! Big slice of Bull anyone?

      Carr said he was meeting African Leaders to see if he could help with the “overspill” (bullsh1t!), what he means is offer our Mining unemployed.

      Africa is not going to what our expensive Resources (because if our high cost of living) with their fractious ALP union infighting!

      The Gillard Government has murdered our Mining Boom, that is crystal clear, so we can expect more interest cuts for sure.

    • Get rid of both parties says:

      10:16am | 26/09/12

      I’ve been saying the mining booms over for six months. The Baltic dry index well and truly indicated the end long before the Labor clowns released their budget.

      Yes interest rates will go to zero just like the US in a deluded attempt to kick start a dead patient. We’re broke and in debt and no longer own producing assets. Australia’ essentially lost it’s job and has a massive credit card to repay.

      All our options have been already been consumed.

      Anyone thinks we’ll recover from the 30 years of incompetence, excess, greed and stupidity is deluded. Life in Australia will never be the same again.

    • bailey says:

      11:34am | 26/09/12

      China’s per-capita steel consumption tracks the trajectory of major economies.

      How are those major economies going babble-on?

      Give us an update on Whyalla while you’re at it. Let us know if has been wiped off the map yet.

    • wakeuppls says:

      12:24pm | 26/09/12

      Yeah, babylon, only a few thousand jobs have been lost so far, and countless jobs will not be created in the future that may have otherwise been. Come back when there is NO mining left ANYWHERE.

      end sarcasm

    • AdamC says:

      09:41am | 26/09/12

      I am inclined to agree that the RBA shoud cut rates, especially if Swansong is serious about bringing the budget back to surplus this year with his big, tough budget cuts. (I know, I know, stop laughing.)

      Ultimate, however, it will take more than tweaks to the macroeconomic settings to keep Australia bubbling along. When are people going to start accepting the need for structural reforms in this country?

    • Tim says:

      09:59am | 26/09/12

      When they understand that short term thinking isn’t conducive to a prosperous future?

      I think Labor tried when they first got into office but incompetence and a hostile opposition put paid to any chance of reform.

      Unfortunately we have politicians who would rather come up with silly slogans and talk about things like a neccessary budget surplus this year instead of longer term thinking.

    • AdamC says:

      11:14am | 26/09/12

      Really, Tim? What reforms are you talking about?

      Pretty much Labor’s first major act in office was implementing their disastrous IR changes. (One of the first reactionary, reverse-reforms in decades in Australia.)  They also tried to impose a poorly-designed tax on the mining sector, not to mention the idiotic ETS-cum-carbon tax which we are now stuck with.

      Rudd did have some ideas about delivering public services, especially health services, better, but his plans came to nothing because, ultimately, the states actually do the service delivery. Despite the hype and rhetoric, the government has done nothing in education, either. They have also introduced sovereign risk fears into the Australian economy, which is just about the worst thing any government can do.

      I suspect that, if they had the balance sheet to do it, Labor would be building lots of infrastructure as a way to boost growth and productivity without alienating their special interest base in the unions and the public service. However, a) they don’t have the balance sheet to do that and b) bulding things is no substitute for market reforms.

      Sadly, the Coaltion seems too timid to put a reformist manifesto to the Australian people in contrast to the immobilisme, mediocrity and seemingly permanent economic malaise offered by the government.

    • Tim says:

      11:29am | 26/09/12

      I think the IR changes were good they simply went too far, the same way that John Howards did in the other direction.

      The ETS was good policy for dealing with climate change, it simply needed to be linked to a global agreement so as not to damage our economy uneccesarily.

      The mining tax was an extremely good idea, but they didn’t have the political gumption to go through with the original version as proposed in the Henry review. A joint opposition/mining industry propaganda effort scared them off and the watered down version is nowhere near as good.
      In fact, Labor didn’t have the balls or insight to put in place most of the Henry recommendations. It was a travesty that so many good ideas got thrown out because of stupidity and ideology.

      Rudd’s ideas were good, but he didn’t have the backing or the guts to go through with a lot of them and the Libs won’t either because of the short sightedness of politics at the moment.
      The problem for Abbott is that Labor in opposition will use exactly the same tactics he has used against them and nothing will get done.

    • Tom says:

      03:48pm | 26/09/12

      Tim, Rudd’s ideas were not good. They just sounded good to the three second attention span voters.

      The health promise of ending the blame game was never delivered with wall to wall Labor governments because of the major constitutional state vs fed interests.

      Rudd’s GFC spendathon was madness on stilts. It did not get us through the GFC, the China / mining boom did.

      NBN was an expensive solution that sounded brilliant to the geeks but in its five years, it has not reached the mums and dads. The people in the bush have stood still with the internet.

      Rudd and his “gunna” was all tip and no iceberg. The model was borrowed from Carr’s NSW “gunna”, media management.

    • AdamC says:

      03:53pm | 26/09/12

      Tim, how can Labor’s IR changes both be good and go too far? And how have they gone too far? They have done exactly what they were supposed to do: reduce flexibility and increase union power.

      Also, a global agreement on emission has been off the cards since at least December 2009 and we still have a ruinous carbon tax. (Sadly, Labor MPs do not seem to realise that a cash churn is not the same as an economy.)

      The mining tax was bizarre and ill-conceived. It was also based on assumptions that did not reflect commercial realities. I was no great fan of the Henry tax review either. No serious review of taxation in Australia could ignore the GST. Also, I thought some of the recommendations (such as the mining tax) would actually serve to make tax laws even more complicated than they already are. Simplifying the system should be the goal of tax reform.

    • Tim says:

      04:34pm | 26/09/12

      repealing the worst parts of workchoices regarding the powers it gave employers to remove conditions from lower level employees was good. Even Abbott has admitted that they went too far.
      Labor has gone too far in allowing the unions too much power when it comes to negotiations. There’s not enough flexibility to hire contractors and some of the employee protection provisions are not well defined enough.
      I’m sure this pendulum will swing again in another few years, no one seems to be able to strike a good balance.

      Yes the Henry review needed to include the GST but I thought other than that it was extremely well thought out and would have allowed for a much simpler and fairer tax system. Other than consumption taxes, he outlined the best areas to collect revenue and delivered measures to achieve it. The mining tax was much fairer than the current royalty system for both Australia and the mining companies. They just disagreed on the rate.
      We’ll have to differ on this area.

    • Ziggy says:

      10:11am | 26/09/12

      I’m old and cranky but I still despair when people think that an economy can be controlled by interest rates. That’s a sledgehammer not a scalpel. And please just understand that the OZ dollar is not a flow on from our economic management but is a captive of the speculators who find it a great little currency to gamble.

    • David C says:

      10:37am | 26/09/12

      Ziggy I disagree re AUD and speculators. It is more a function of the global central banks re-adjusting thier currency holdings.As the global economy shifts ie less US more others they need to divest USD and hold alternate currencies like AUD.
      I am not saying the speculators dont play the AUD, it is just in this case I think the central banks are the drivers

    • D Glass says:

      10:48am | 26/09/12

      Yeah, sure.

      But no one seriously interested in national affairs & the economy sees the RBA setting of the cash rate as “controlling the economy”.

      Monetary policy (interest rates) is just one part of the overall picture, along with
      Fiscal policy (revenue and expenditure) and
      Broader macroeconomic policy (employment, unemployment, productivity, savings, investment, trade etc) 

      Still, the independent setting of the base interest rate is widely seen, for good reason, as a sensible stabilising mechanism.

      Likewise the floating of the currency, adopted by most countries. Widely agreed to be a sensible stabiliser and better, less risky, than a fixed currency, despite the “speculative” element - which is one reason why the central bank in most countries takes part in the currency market for their national currency.

    • Ziggy says:

      11:20am | 26/09/12

      @Glass Yeah sure - I’m making a comment re the journalists (whether supposedly financially literate or not) underlying assumption in this regard.
      Not to mention the politicians twaddle.
      Which all leaves the general populace under the impression that interest rates set by the Reserve are the be all and end all.

    • Ziggy says:

      11:25am | 26/09/12

      @David. Yes that is true but I worked a lot with George Soros at one stage when I was in the US and he loved to make money playing our dollar. And he had the resources.Also he had influence with the US and other Banks so it was a low risk game for him.
      I was wondering this morning if he has been playing the Pork Bellies market given the worldwide shortage of one of man’s greates inventions - BACON!

    • wakeuppls says:

      12:28pm | 26/09/12


      Are you saying interest rates that are too low do not encourage property speculation and in general deficit spending?

    • Ziggy says:

      01:21pm | 26/09/12

      @Wakeuppls No of course not. D.Glass has pointed out some of the many other factors affecting the economy - which was my point. For example Blind Freddy knew that commodity prices were going to drop but note how Stevens has seemingly only discovered this. Those involved in mining have known this risk for months yet our Government marched merrily on with policies that has accelerated the whole problem.Of all the Board members only Corbett has ever spoken much sense and indicated any real knowledge on how the economy actually works.
      To Stevens great credit is that his inherent conservatism has stopped too much playing with the controls as seen in the USA where their Titanic economy veers from iceberg to iceberg without ever finding clear water.

    • Knemon says:

      10:25am | 26/09/12

      “It would be unusual for the Reserve to cut interest rates at a time when the jobless rate was steady, or, indeed, falling a bit”

      So what was the point of this article Jessica?

      Leave interest rates where they are. wink

    • D Glass says:

      10:58am | 26/09/12

      The point is that the RBA is looking to the longer term, and the labour figures largely show where we’ve been, not where we’re going.

      Jessica Irvine’s article overall covers much of this ongoing balancing act, between past, current and likely future outlook, fiscal vs monetary, inflation v employment - in the medium to longer term, though she seems to have ignored current soft hours data (lagged) and the hint of return to employment growth (leading).

      Your comment seems to be focussed on the immediate short term.  It’s not that easy. And there’s no hand black white good bad Labor Liberal villain to wag fingers at, either.

      Of course, if you were really interested you could take a squizz at the RBA Board Statements, Minutes and Bulletins, and the Treasury Economic Roundup, and make up your own mind..

    • Sam says:

      10:30am | 26/09/12

      When we find out just how much money Swan/Gillard have wasted, we will be shocked and angry.  They are taking us for a big ride.  They know the ship is going down and we should be very suspicious of the shufflung of the deck chairs that has begun.  Also, I personally spoke to a Government Employee from Canberra who is working on the Carbon Tax, on contract from America, and s/he said that the government is purposely making it as difficult as to pick apart.  The game now is not ‘make an effective carbon tax policy’.  The game is ‘create a carbon tax legislation framework that cannont be unpicked by a future government’.  That is why they decided to link our scheme to Europe’s.  It makes it that much harder to unwind.  When Abbott becomes PM they will taunt him from the otherside when he is unable to rewind the carbon tax, knowing full well the mess they left should ensure he has years of work trying to do just that.  How is any of this good for our country?

    • Get rid of both parties says:

      11:43am | 26/09/12

      We need a new party that enacts retrospective laws putting these grubs in jail.

      Australians won’t be shocked and angry, they’ll be looking for the next hand out.

      In a way I’m looking forward to the collapse of Australia. We deserve it.

    • Deborah says:

      12:14pm | 26/09/12

      Makes me wonder what the current Government really are interested in doing.  Typical that it is more about their ego and less about what is really important.  I believe politicians should ultimately be responsible for their inept decisions, but then is that a fairy I see at the bottom of my garden?
      If Wong/Swan are correct yesterday in saying that they could slice $500 million out of the PS (without job losses), makes me reel about how much is wasted on a daily basis.  Should PS staff entitled to fly business class??? when they don’t have to pay for it.
      We should all try to live within our means, and that goes doubly for governments State, Federal and Local Councils.  And Welfare should only be given to those who truly need it, not for vote buying.
      Interest rate cuts only matter to the mortgage holder when banks actually pass them on in full.

    • Frank of Ingle Farm says:

      10:42am | 26/09/12

      low interest suits mortgage holders // higher interest suits people in or nearing retirement /// never will everyone be happy

    • Ratchadaman says:

      11:36am | 26/09/12

      Interest rates will not help Australia. It is now horrendously expensive to live and be an employer. Houses are hugely overpriced, food is ridiculous, etc. As an example, Perth is 56 % more expensive than Berlin and is the same costs as London and Paris.

      Just leave like I and many others have done, that country is history.

    • Esteban says:

      11:42am | 26/09/12

      If the RBA really wanted a finger on the pulse of the economy there should be at least one shop keeper and one owner driver courier ( 1 tonne flat top) on the board.

      Then we would get decisions based on more up to the minute information.

    • Anna C says:

      11:54am | 26/09/12

      I hope the RBA leaves interest rates alone.  Houses are expensive enough without RBA adding more heat to the housing market.

    • jamie says:

      12:06pm | 26/09/12

      Are you an economist are you? I guess this is an opinion blog for a reason. The job of the Reserve Bank should be proactive not reactive - cutting because of what has happened in the past is reactive.

      It is about making decisions to shape events moving forward based on indicators derived from past events.

      The indicator of investments being stalled, jobs being lost and commodity prices dropping is that the AUD will naturally correct towards parity if not lower thus eliminating the need for another cut at this point in time.

      Thus your logic is fundamentally floored. My point is this: given the shifting economic climate in Australia and the growing pessimistic outlook by Australians and Australian Companies, cutting rates now means that when things really get bad (more job losses, more commodity price drops, more investments opportunities withdrawing) we wind up in a position whereby the RBA no longer has the flexibility to drop rates and stimulate spending. Then you end up like America, where you can only print money and so much of it.

      No mam, the RBA should not cut rates, and we should not be benchmarking or reacting to monetary policy from high debt poor performing countries like America or those within the EU.

      What has really screwed us is the tens of billions of dollars spent by Labor during the ongoing GFC. What it has actually been is tens of billions of dollars wasted by Labor on nothing more than vote buying cash handouts. Tell me, how does a new sports hall and library in schools around Australia contribute towards establishing 5,10,15,20 or 50 years of future industrial development. That money should have been invested in to infrastructure and new industry (not car manufacturing stimulus) development - where it can stimulate further investment and thus ongoing capital contribution to GDP.

    • Dan says:

      12:27pm | 26/09/12

      RBA should NOT cut rates next week. Instead raise them. Do something for the honest savers. Stuff the mortgage holders who borrowed more than they can afford.

    • Tator says:

      01:28pm | 26/09/12

      it is not just mortgage holders who are affected by interest rates, it is nearly every single business in Australia who has some form of debt or finance used to help set up their business.  Increasing interest rates increases their cost of business which leads to increased prices for everyone.  At this point in time, our cash rate is in real terms, quite low compared to historical levels, but in comparison with the major and local economies like the US, European Monetary Union, Canada, the UK and New Zealand where interest rates are all 100 basis points lower than ours at a minimum, some even 300 basis points lower or more, they are comparably high.

    • Dry Liberal says:

      01:02pm | 26/09/12

      Low interest rates are a disaster. Look at America and Europe and Japan: they followed the ZIRP rabbit all the way down the rabbit whole and they’re in terrible shape. Interest rates should have a floor of about 5% minimum I think. Just because the rest of the world is insane and hell-bent on destroying their currencies, doesn’t mean we should follow their lead arbitrarily.

    • John says:

      01:31pm | 26/09/12

      The lower class’s take out the money from the middle class and recklessly spend it (getting a mortgage and materialism, the middle class investments are basically junk now, and the higher class’s make their quick profits wiping out the middle class in the process by reducing interest rates.

    • John says:

      02:15pm | 26/09/12

      To add to matter, bankers don’t seem to care too much who they lend their money out to. We have 5% deposits, low interest rates, lending into hugely inflated housing market with nobody paying their debts, the banks don’t care if the debts are paided back, because it’s not their money to lose. They are there to get their quick credit, their interest.  Banks are currently reckless lending other people’s money to people in the near future will not be able to pay it back.

      Then you have central bankers running the printing press’s creating more and more money, creating a official figure 3% inflation! Which could be really more then that. Why have you money in bank if interest rates start going down to 3%? Just pull it out and teach them a lesson. The banks will ask for more from the printing press’s creating faster inflation. It’s insanity.

      This thing is going to implode, the current wealth of today is an illusion, it’s just giant poniz scheme. The mass’s of people are utterly insane, spending recklessly now, but in the further they are going wish they didn’t spend a dime. When all the job’s are lost, their entire attitude of materialism and spending will be wiped off the face of the earth.

    • John says:

      02:05pm | 26/09/12

      The problem is globalization, International Bankers get rid of european union’s, Free Trade and all that krap, IMF’s, ECB, World Bank and the FED. End mass immigration, end wealth-fare, end materialism, end this idea of creating credit from from future superstitions of the market is insanity, there is no future, and there is no wealth. It’s all an illusion.  End the US dollar as being the reserve currency.

      Create Nationalistic Self reliant based economy, every nation having it’s own central bank, no FED’s, ECB’s, NO IMF’s. The bank must be OWNED by the the people, not International capitalistic bankers who’s interests are sucking dry the wealth of nations. No more interest being paided to a heap of international bankers, who basically just print money out of thin air and charge interest. Why does a nation allow,  thieves to print their own currency, and pay interest on it? It’s insanity.

      Their agenda to create an empire, is collapsing, nations are better at managing their own finances, then central body international bankers who are corrupt and make trade deals that better for more influential country’s the poorer ones. These deals, make weak country’s, even weaker.  This then creates wealth based empire, where poor regions are basically underemployed and heavily in debt, while the richer regions suck up all the last drop of wealth from the poorer regions. Once the poor regions are dead, the vultures will then start to starve as they have no more nations to eat.

    • Jon0 says:

      02:30pm | 26/09/12

      @Dan 12:27pm | 26/09/12 Mate, it’s not about the mortgage holders, it’s about stimulating growth: encouraging people to actually spend their money. You should pull your head out of your arse and actually make an effort to understand things before jumping onto stupid conclusions.

    • Mitch says:

      02:31pm | 26/09/12

      After reading the comments so far, I’m starting to think I’m behind the 8-ball if I’m not selling all my shares, withdrawing all my money and buying guns, ammunition and canned food.

    • john says:

      03:21pm | 26/09/12

      @Mitch “selling all my shares, withdrawing all my money and buying guns, ammunition and canned food. “

      it pure & simple depends which part of the spectrum of life your point of view is taken from.

      If you just done a line of coke using your platinum card to divide and line, you probably see sunshine, rainbows and lollipops, everything will be just fine, nothing can hurt you your nuke proof.

      If you a a pragmatist and see things for what they are, then your probably selling. Because not so long ago we seemed to have more, now we have less that requires more of what we don’t have that equals debt, that you or your mortgage/e has to repay at some point.

      If your bearish or pessimistic or prefer doom and gloom- at this rate you could forgive people in the EU & US for thinking like this and you could be about right and be the new norm.  Perhaps withdrawing all your money and buying guns, ammunition and canned food isn’t such a bad idea either - besides I’m certain many people in the in the US already have done so.

      As for me I don’t give a flying F**K, because I learnt along time ago back in high school to compete…. which really means that people enjoy ripping each other to pieces to scratch a living or whatever they are up to.  As long as I got coco pops for breakfast and I can watch the horror movie right here on my TV or PC should be just dandy, because I have enough apathy for every person on the planet.

    • John says:

      03:23pm | 26/09/12

      Glen Steven’s is really insignificant. His role is just to dance to tune of financial oligarchy of the west. This financial oligarchy is basically reckless and not fit to manage the finances of the west. The future of the west is the abyss, there is no magic or miracles workers that going to change the inevitable. Society will be taught a lesson, the positions of power must monitored and kept in check before corruption sets in and corrodes the nation to the core. Steven’s must do what he must now, keep pushing down interest rates to keep the corrupt system afloat. But he only has 3% to go before the system runs out of air.

    • john says:

      05:04pm | 26/09/12

      “But he only has 3% to go before the system runs out of air.”

      Oh crap google has deleted that link to the rubbery figures clip where in the early 1990’s the then treasurer Paul Keating says “we need more hot air”. whilst in a hot air ballon going down with bob hawke!

    • Ken says:

      04:17pm | 26/09/12

      Like an extra 50 bucks a month will make a dent. Leave rates where they are, otherwise I may as well pull my savings out and keep it at home in a milo tin. At least I will save on transport to the bank and electricity fapping about with netbank. We don’t all have a mortgage.

    • The bubble will burst says:

      04:23pm | 26/09/12

      To keep cutting interest rates is INSANE!!!!!!!!!!!!!!!!

    • Samuel J says:

      05:10pm | 26/09/12

      Au contraire, it is one of the easiest and most overpaid jobs in the world. Up, down, or unchanged. Once a month, with a nice meeting / lunch. And lots of staff to write your speeches. No, Jess, Governor of the RBA (or any central bank) is a walk in the park.

    • off centre says:

      05:38pm | 26/09/12

      I read through the comments and agree with the sentiment shared by GROBP. Australia has pinned its entire economy on mining and now that it is over we have nothing to fall back on. It doesn’t look like “just another recession” is on the way like the history books say, because this time there are no competitive industries left.

      I just can’t believe the state this country (and world) is in, now that I am of voting age and working. Did everyone really think 21 years of uninterrupted economic growth was really sustainable? Did politicians not stop and think what would happen if we sold all our assets? Forget going to school and University. The new paradigm for future generations will be to learn how to a) shoot a gun and b) farm.


Facebook Recommendations

Read all about it

Punch live

Up to the minute Twitter chatter

Recent posts

The latest and greatest

The Punch is moving house

The Punch is moving house

Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…

Will Pope Francis have the vision to tackle this?

Will Pope Francis have the vision to tackle this?

I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…

Advocating risk management is not “victim blaming”

Advocating risk management is not “victim blaming”

In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…

Nosebleed Section

choice ringside rantings

From: Hasbro, go straight to gaol, do not pass go

Tim says:

They should update other things in the game too. Instead of a get out of jail free card, they should have a Dodgy Lawyer card that not only gets you out of jail straight away but also gives you a fat payout in compensation for daring to arrest you in the first place. Instead of getting a hotel when you… [read more]

From: A guide to summer festivals especially if you wouldn’t go

Kel says:

If you want a festival for older people or for families alike, get amongst the respectable punters at Bluesfest. A truly amazing festival experience to be had of ALL AGES. And all the young "festivalgoers" usually write themselves off on the first night, only to never hear from them again the rest of… [read more]

Gentle jabs to the ribs

Superman needs saving

Superman needs saving

Can somebody please save Superman? He seems to be going through a bit of a crisis. Eighteen months ago,… Read more



Read all about it

Sign up to the free newsletter