At Year’s End, Reserve Bank Leaves Cash Rate At 1.5%

As 2016 ends, the Reserve Bank of Australia has left the cash rate at 1.5%.

At its monthly board meeting, the bank made no change to the rate that has been in place since August. Movements in the cash rate are generally reflected in movements in commercial interest rates.

In a statement, the bank’s Governor, Philip Lowe, repeated points made in previous months about rising commodity prices, the effective functioning of financial markets and Australia’s transition from the mining investment boom. It says unemployment has decreased, inflation is low and the housing market has strengthened.

At the beginning of the year, the cash rate was 2.0%. The bank reduced the rate by 0.25% in May and by 0.25% in August. The rate is at an historic low point.

Statement by Philip Lowe, Governor of the Reserve Bank of Australia.

Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The global economy is continuing to grow, at a lower than average pace. Labour market conditions in the advanced economies have improved over the past year. Economic conditions in China have steadied, supported by growth in infrastructure and property construction, although medium-term risks to growth remain. Inflation remains below most central banks’ targets, although headline inflation rates have increased recently. Globally, the outlook for inflation is more balanced than it has been for some time. [Read more…]


Chris Bowen: The End Of Australian Exceptionalism?

Shadow Treasurer Chris Bowen has addressed the National Press Club on the ALP’s approach to economic policy.

Bowen

  • Listen to Bowen’s speech (24m – transcript below)
  • Listen to Bowen take questions (37m)
  • Watch Bowen’s complete appearance (61m)

Transcript of Shadow Treasurer Chris Bowen’s Address to the National Press Club.

THE END OF AUSTRALIAN EXCEPTIONALISM?

I first acknowledge the traditional owners of the land on which we meet, the Ngunnawal and Ngambri people, and acknowledge elders past and present and emerging, as well as re-commit myself to the task of eradicating Indigenous disadvantage in Australia. [Read more…]


Chinese Own Less Than 1% Of Agricultural Land; Figures Show 86% Land Australian-Owned; Half Of All Foreign Investment Is From UK

Figures released today by the Australian Taxation Office show that 86.4% of the nation’s agricultural land is held by Australians. Foreign interests hold 13.6%, whilst Chinese interests control just 0.4% of the total.

Figures from the Register of Foreign Ownership of Agricultural Land show that over half of all foreign investment in Australian agricultural land is held by the United Kingdom (52.7%), which has 27.5 million hectares, or 7.2%, of total agricultural land.

United States interests hold 14.8% of all foreign investment in land. This represents 7.7 million hectares, or 2% of the total.

The Netherlands, Singapore, China, Philippines, Switzerland, Jersey, Indonesia and Japan hold 21% of all foreign investment. Together, the top 10 countries account for 88.5% of all foreign investment in agricultural land.

The figures debunk claims by populist and fringe political groups about Chinese holdings of land. Just 2.8% of all foreign investment in land is Chinese, or 0.4% of all agricultural land. [Read more…]


Reserve Bank Leaves Cash Rate At 1.50% At Monthly Meeting

The Reserve Bank left the cash rate at 1.50%, at its monthly meeting today.

The bank’s board set the rate at the historic low of 1.50%.

The bank’s Governor, Glenn Stevens, said inflation is “quite low” and is expected to remain that way “for some time”.

Stevens said: “In Australia, recent data suggest that overall growth is continuing, despite a very large decline in business investment, helped by growth in other areas of domestic demand and exports. Labour market indicators continue to be somewhat mixed, but suggest continued expansion in employment in the near term.” [Read more…]


Morrison Warns Of Economic Complacency And Calls On ALP To Support Budget Repair Measures

The Treasurer, Scott Morrison, says there is a “terrible risk” that Australia’s economic success has sown the seeds of complacency.

Morrison

In a speech to Bloomberg, in Sydney, Morrison said there was a new divide in Australia between “the taxed and the taxed nots”. He warned of the complacency of a generation that “has grown up not ever having known a recession” and an attitude where “deficits are dismissed as temporary, cyclical and self-correcting”.

Morrison said there were three things the government must do over the next three years.

Firstly, it must “get debt under control by returning the budget to balance”.

Secondly, it must “support and implement policies that help us to increase what we can earn as a nation..in a low growth, low interest rate, low inflation, low wages growth, volatile world”.

Thirdly, Morrison warned against a return to “renewed protectionism” and an attitude that “trade, investment and positive immigration policies are increasingly seen as the problem and not the solution”. Whilst many Australians “feel the system no longer works for them”, Morrison cautioned against a cynical and populist political endorsement of this sentiment. “We cannot pull the doona over our head,” he said. “Rather than secure our economic future, it will cost it.” [Read more…]


Turnbull’s Economic Policy Speech To CEDA Disrupted By Refugee Protesters

Prime Minister Malcolm Turnbull’s speech to CEDA today was interrupted by a group of refugee protesters.

Turnbull

Turnbull was addressing the Committee for Economic Development of Australia, in Melbourne, on economic policy. The female protesters gained entry to the event by posing as members of the press. About ten minutes into the speech, they began yelling and waving banners that called for the closing of offshore refugee detention camps. One woman stood on the stage near Turnbull with a poster that read: “FFS Close the Bloody Camps”. The protesters were quickly dispersed and evicted from the event.

Turnbull’s speech contained little new. It centred on the government’s commitment to Budget repair and its election campaign themes of innovation and science, investment in the defence industry, trade agreements and taxation.

The Prime Minister said: “In the upcoming sittings, we will introduce an Omnibus Bill that puts together all the Government’s savings measures that we understand from the election campaign the Labor Party is prepared to support.” [Read more…]


Banks Will Have To Appear Before House Economics Committee Say Turnbull And Morrison

Australian Banks will have to appear once a year before the Economics Committee of the Parliament, under plans announced today by Prime Minister Malcolm Turnbull.

Turnbull and Treasurer Scott Morrison held a joint press conference to outline the plan. Turnbull said the banks “operate under a social licence from the Australian people”. Built on a foundation of trust, “they have to earn that trust through being open and accountable at all times,” Turnbull said.

The heads of the four major banks will be required to appear before the House of Representative Standing Committee on Economics. Morrison said this was “in the same way that the Reserve Bank and APRA currently appear before the committee on a regular basis”. [Read more…]