The Reserve Bank of Australia (RBA) cut interest rates yesterday as a prudent move to cushion the Australian economy against growing economic uncertainty. They also hoped to prompt a little more consumer spending – classic central bank monetary policy.
Despite all the global gloom and doom, the RBA noted that the Australian economy is in relatively “good shape” to survive the coming economic storm.
Not that you’d now that listening to certain politicians or reading the news in certain news papers…
Thus the RBA, economists and commentators are concerned the negative campaign against the carbon tax has spooked consumers:
Regardless of how much of the latest cut is passed on by banks, the Reserve is understood to be concerned that its attempts to stimulate the economy are being compromised by lobbying against the carbon tax, which is also obscuring the benefits of the July 1 income tax cuts.
When the Reserve cut rates by 0.50 of a percentage point in May, the Melbourne Institute consumer confidence index barely moved, and assessments on whether it was a good time to buy a major household item went backwards.
Or course, it’s easy to see who is leading that fear campaign: Tony Abbot and the Myrmidon legions of News Ltd.
It is incredible to witness the spectacle of conservatives claiming to be “protecting” the Australian economy from the carbon tax effectively destroying consumer confidence.
Should we be surprised?
Back in 2010 the comedians from the Chaser asked Abbots a few hard questions about the national debt. Watch Abbot’s fumbling:
Yes, let’s give the Australian economy to this man.