25 February 2020
1300 794 893

Union Boss Howes calls for lower interest rates or shake-up of RBA Board

Christopher Joye
29 August 2011

This is amusing. While most informed observers are arguing the RBA's dovish Board, which is (6 doves/1 neutral/2 hawks) majority controlled by conflicted business executives, has hampered the ability of officials to meet their formal inflation-targeting objectives, my old mate Paul Howes wants the Board shaken-up so that it can cut rates pronto irrespective of the inflationary consequences. Say hello to the 1980s folks! Comments like these pretty much kill off any chance we had of getting some union representation back on the Board. According to The Australian:

"The Australian Workers Union boss called for a change in the RBA board's make-up, saying the current directors had allowed rates to remain high for too long, and lashed the quality of advice from Treasury bureaucrats.

“We have a situation where manufacturing, agriculture, tourism, are all under huge threat, frankly because of inaction by the RBA, some pretty dodgy economics from Treasury,” Mr Howes said in a speech to Labor MPs today.

“He said it was imperative that interest rates were lowered to kick start the vital economic sector. “Frankly if the Reserve Bank's current directors are not going to act on this we need to review the make up of the RBA,” he said.

“I'm not advocating re-regulating the way interest rates are set, but we have to recognise the fact that it is not sustainable for our economy to have interest rates that are so much higher than the rest of the world and to think that a dollar sitting between parity and $1.10 is normal or our economy is adjusted to deal with it.”

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.

Let us know what you think
Get the latest financial, business, and political expert commentary delivered to your inbox.

When you sign up, we will never give away or sell or barter or trade your email address.

And you can unsubscribe at any time!
1300 794 893
© 2006-2019 Switzer. All Rights Reserved
homephoneenvelopedollargraduation-cap linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram