Reserve Bank Governor tears into both sides of Government 72



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Reserve Bank Governor Glenn Stevens has torn into both sides of the government overnight, claiming that neither side are doing enough to stimulate the fledging economy.

A solid housing sector and solid consumer spending will do little to offset claims that non-mining investment is set plunge, compounding the collapse in mining spending.

Mr Stevens, who took a shot across the government’s bow, said the government needs to deliver on infrastructure programmes, not simply talk about it.

Speaking at a function for the Economic Society of Australia in Brisbane, Mr Stevens said, “It would be confidence-enhancing if there was an agreed story about a long-term pipeline of infrastructure projects”. “It would boost the finance sector, boost the real economy and improve Australian cities”.

What’s more, Mr Stevens noted, “the issues are not a financial as funding is cheaply and readily available. The impediments are political”.

Showing his desperation to get the economy going, Stevens is prepared to cut interest rates again – a move that has surprised some commentators, given the cost of funds is around 2% anyway. With the RBA running out of meaningful levers to pull and without the government making a clear and concerted effort to make the most of good opportunities, the RBA may be forced to act on what seems like frantic measures.

Clearly though, further cuts to the interest rate will spook already concerned retirees and pensioners, eating further into their passive cash returns. Mr Stevens’ comments, that borrowing to fund infrastructure that will earn a return “is not the same as borrowing to pay pensions or public servants”, will do little to ease the mounting concerns of pensioners.

What do you think? Is the government doing enough to stimulate the economy? Is it time for both side of the political fence to man up and make some game changing decision? Will lowering interest rates again help or hinder?

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  1. I can only speak from personal experience, but instead of them giving confidence to older people to spend their pensions and retirement savings, they have instead chosen to bully and scare them into not spending. The ” leaners ” spend everything cent they get on their small pensions just trying to survive. Unemployment is at an all time high, less people paying tax and spending, and relying on Newstart. I think we are well and truly on the way to recession

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  2. Job losses everywhere, people can’t spend if they have no money, where are these 1 million jobs they promised? Instead they put many on the unemployment line

  3. Jobs going overseas
    They sell everything off
    Let foreigners buy our land
    Hockey Abbott start growing a brain get on board with the public meaning Us Australians

  4. He is spot on with his comments recession heading our way, unless Politicians stop feeding their own interest and actually start creating jobs real full time jobs back Australian farmers and industry what is left of any industry not sold off to offshore companies or Chinese interests.
    Instead of wasting Tax payers money in Parliment with the continuing childish antics that still exists. Yet they get pay rises for themselves for not doing their jobs properly. Drop stamp duty to a land tax on established homes more jobs will be created through home improvement modernizing of most of those dated homes this creates a domino effect for all industries that supply to that market stacks of small businesses put a $5000 FHOG up to $ 550,000 Val. Established homes.

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    • Darrell their spin doctors I am sure monitor Facebook like I said they need to do their job that includes the highly paid spin doctors they have. Not worth the money if they can’t pick this up.

  5. Didn’t the rich get even richer during the GFC? Makes you wonder if they’re engineering another one…

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    • Nope not another GFC this time as in prior times they are negotiating a war. Huge profits can be made out of supplying a war…Arms Machinery Food Clothing(uniforms) transport data colection planes ships motor vehicles it is all put on ships that sail on the ocean the ship goes to the bottom sunk by a submarine the insurance pays up and of goes another ship load.

  6. Both sides of Government?? Last time i looked there is only ONE party in power and they are doing a shit awful job at stimulating the economy and improving Australia’s and Australians lives! Except for the wealthy of course!

  7. If governments and industry giants cannot find a way through this stupidity – and we cannot remove them from their well paid positions – how on earth are we to get out of this hole they have dug us in! Next we will be in another world war!

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    • Many people ARE worried about the prospect of another world war – utter chaos in SO many countries! Also aware of the rising likelihood of it being ON Australian soil, too – maybe even from within!

      My OTHER point : Dan ‘The ‘CAN IT’ Man’ Andrews, ‘NO LABOUR’ Premier of Victoria, is doing virtually nothing; some projects not properly costed yet; cancelled the urgently needed East-West Project – then gives us another public holiday, which we’ve done perfectly well without, at more cost to employers in paying for a day’s lost labour! AND we’re only SIX MONTHS into his FOUR-YEAR TERM!

      Jeff Kennett was forced to sell off utilities, due to the abysmal financial mess that the previous Labor Government before his Liberal Government plunged us into; therefore, just WHAT state will the current, inept, Labor Government leave
      Victoria in, I ask? We SHOULD be scared, VERY scared.

  8. Fields of fire on ABC refreshed the memories of all who watch it, the other night , Rudd was way ahead of the game, when it came the GFC, as Glen Stevens acknowledged, , he is a very intelligent man, he saved Australia from the worst of it. But the Abbott Government is driving us deeper into recession. High employment and cuts instead of stimulating are only making the situation worse

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  9. What a novel suggestion for the governments to work to stimulate the economy, borrow now while rates are at all-time lows to fund infrastructure projects.

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