Reserve Bank Leaves Interest Rates Unchanged

At its monthly meeting today, the Reserve Bank of Australia has left the cash rate unaltered.

The cash rate has been 3.0 per cent since the Reserve’s December board meeting.

Statement from Glenn Stevens, Governor of the Reserve Bank of Australia.

At its meeting today, the Board decided to leave the cash rate unchanged at 3.0 per cent.

Global growth is forecast to be a little below average for a time, but the downside risks appear to have lessened over recent months. The United States is experiencing a moderate expansion and financial strains in Europe are considerably reduced compared with the situation through much of last year. Growth in China has stabilised at a fairly robust pace. Around Asia generally, growth was dampened by the earlier slowing in China and the weakness in Europe, but again there are signs of stabilisation. Commodity prices are little changed recently, at reasonably high levels.

Sentiment in financial markets is much improved compared with the middle of last year. Risk spreads have narrowed and funding conditions for financial institutions are more favourable. Long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Borrowing conditions for large corporations are very attractive. Share prices have risen substantially from their low points. However, the task of putting private and public finances on sustainable paths in several major countries is far from complete. Accordingly, as seen most recently in Europe, financial markets remain vulnerable to occasional setbacks. [Read more...]

Anthony Albanese: Driving Productivity Through Infrastructure

The Minister for Infrastructure and Transport, Anthony Albanese, has outlined the federal government’s approach to infrastructure and productivity in an address to The Sydney Institute.


  • Listen to Albanese’s speech (27m)

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  • Listen to the Question & Answer session (35m)

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Transcript of Infrastructure and Transport Minister Anthony Albanese’s speech to The Sydney Institute.

Infrastructure: Driving Productivity


“Productivity isn’t everything, but in the long run it is almost everything.”

So said Paul Krugman in his “The Age of Diminished Expectations”.

It’s no secret that Australia’s overall productivity rate has fallen over the past decade.

There are some who argue that the solution lies totally in industrial relations.

This is ideologically driven.

The fact is that Australia’s labour productivity is in the top dozen of international performers.

As the Australian National University’s Dean Parham pointed out recently, in recent years labour productivity has increased by 3.3 per cent per year.

Whilst this has occurred, capital productivity has actually declined by 4.3 per cent.

So the truth is that addressing productivity requires more than the simplistic slogans of those who would seek to return to WorkChoices under another name. [Read more...]

Reserve Bank Governor Glenn Stevens Appears Before House Economics Committee

Glenn Stevens, the Governor of the Reserve Bank of Australia, has appeared before the House of Representatives Standing Committee on Economics.

Stevens told the committee that economic growth “was probably about trend in 2012 as a whole” but “our sense is that the economy has entered 2013 at a pace a little below that”.

Stevens said that “the economy will be adjusting to the peak if the mining boom and some other areas of demand will have room to grow more quicly than they have in recent years”. He said the threat of extreme financial instability in the euro area “has abated” and the United States has avoided the worse of the “fiscal cliff”. He said the slowdown in China has come to an end.

Text of opening statement by Reserve Bank Governor Glenn Steven to the House of Representatives Standing Committee on Economics.

In the six months since the August hearing, economic and financial conditions abroad have generally improved. We can see three key sets of developments.

First, the threat perceived in the middle of last year of extreme financial instability arising in the euro area – and, in the eyes of some, possible disintegration of the euro – has abated. This followed various important steps taken by European policymakers. Interest rates faced by some of the key sovereigns which were under acute pressure have declined markedly, and funding conditions for many European banks have improved to the point where some of the central bank funding that had been supplied has been repaid. These countries, and Europe generally, still face immense challenges and it is, as usual, important to stress that sentiment remains vulnerable to setbacks. But a truly disastrous outcome was, once again, avoided. [Read more...]

“A Plan For Australian Jobs” – Gillard Launches Industry And Innovation Statement

The federal government has announced a $1 billion plan to promote jobs and productivity.

The Prime Minister, Julia Gillard, appeared today at the Boeing factory in Melbourne with the Minister for Industry and Innovation, Greg Combet, to launch the plan.


The plan provides for measures to assist Australian companies to win more local work, increase exports and win new business overseas, and support the growth of small to medium Australian businesses.

Statement from Prime Minister Julia Gillard.

The Plan at a glance

Australians expect and deserve well-paid jobs that support their families and look after our communities.

That is why the Australian Government is investing $1 billion to keep Australian jobs safe.

We are introducing changes to help Australian companies that are doing it tough.

As well as giving a boost to companies with high-growth potential.

We want to see local Australian companies get a fair go. That’s why we are also making changes to encourage new businesses in new industries to create new opportunities and new jobs.

We want to make sure that our kids and our kids’ kids have high-skilled, well-paying jobs now and in the future. Our focus is squarely on jobs and growth.

Our economy thrives when we have a strong workforce and profitable innovative businesses.

A Plan for Australian Jobs is a roadmap for creating jobs and lifting productivity.

It is a plan to put Australian businesses and industries on a firmer footing so they are able to take up opportunities to compete globally.

The Australian Government acted quickly to keep the economy strong during the Global Financial Crisis.

While the rest of the world is still recovering, Australia’s economy has continued to grow.

But we can’t stand still. We need to create the jobs of the future.

The strong Australian dollar and an increase in global competitors are hurting many Australian businesses and threatening jobs.

And the world is changing. Economies in Asia, such as China, are growing quickly. Their citizens want high-quality goods and services, which Australian companies can provide.

Innovation is central to the success of our industries and our capacity to respond to the needs of markets in Australia and overseas.

Our vision is for Australia’s innovation system to be ranked in the top 10 globally. This is an ambitious goal, but we have the right framework to achieve it. [Read more...]

Bodyline, The Economy And A Republic: Wayne Swan Joins The Dots

The Deputy Prime Minister and Treasurer, Wayne Swan, has released an Australia Day article that draws a series of connections between the 1930s Bodyline cricket series, the contemporary economy and a future republic.

SwanSwan remembers Bodyline as typifying Australian resistance to English imperial superiority. He sees Australia defending “fair play” and playing “within both the letter and the spirit of the rules”. Australia’s code, says Swan, is “not a gentleman’s code” but “a democratic code”.

Linking Bodyline with the 1930s Depression, Swan says “Australians didn’t cause that Depression and to a very great extent we were powerless to tackle it..because we lacked full economic sovereignty”.

Swan says Bodyline and the Great Depression “helped awaken a democratic and egalitarian assertion of Australian national sovereignty that still serves us well on Australia Day 2013.”

Despite the fact that the Rudd and Gillard governments have done nothing over the past five years to promote constitutional change, Swan says reflection on Bodyline and the Depression “will eventually” have the legacy of “hastening the approach of an Australian republic”.

Swan’s argument is similar in style to his musings last year on Bruce Springsteen’s opposition to economic privilege. In his John Button Oration, Swan sought to emphasise democratic and egalitarian values at the heart of the Labor government’s value system.

Swan’s article today is an attempt to add to the over-arching story the government has been developing as the federal election draws near.

Text of an article released by the Treasurer, Wayne Swan.

Forged in Fair Play – 80 Years on From Bodyline

It has been another eventful Australian summer, marked by bushfires that have once again tested some of our nation’s most important values: our capacity to stick together in a crisis, help out those who need help, display coolness, competence and courage under pressure.

In a time of transition, with our nation on the cusp of the Asian Century, our values are the most treasured commodities we possess, ones which will always endure. So as we celebrate this Australia Day, it is worth reflecting on the origins and nature of Australia’s national values.

There’s no one source of our national character. It comes from our indigenous heritage, from the struggles of the convicts and early settlers, the Federation period with its conflicts and mateship, and of course our nation’s experiences on the battlefields of war. [Read more...]

Swan Continues Attacks On Campbell Newman Cuts

For the second day running, Treasurer Wayne Swan has focussed on Queensland government budget cuts and their effect on unemployment and the national economy.


At a Brisbane media conference, Swan quoted from Queensland Budget papers which itemised $3 billion worth of cuts to health funding and 2,754 full-time job losses.

  • Listen to Swan’s media conference – transcript below (14m)

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  • Listen to Swan’s media conference yesterday on the CPI figures (19m)

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Transcript of Treasurer Wayne Swan’s Brisbane media conference.


I wanted to say a few things about the World Economic Outlook which has been released by the IMF overnight. They have expressed cautious optimism about future growth in the global economy and certainly cautious optimism is justified if policy makers get the big decisions right over the next 12 months. And in particular, policy makers in the United States when it comes to the conclusion of the negotiations surrounding the debt cap there and the other issues associated with the fiscal cliff. [Read more...]

Unemployment Rate Increases 0.1% To 5.4%

Australia’s unemployment rate increased by 0.1% to 5.4% in December.

There was a small fall in full-time employment, offset by increased part-time employment. The participation rate was steady at 65.1%.

Employment Participation Minister Kate Ellis and Shadow Treasurer Joe Hockey both commented on the figures.


  • Listen to Kate Ellis comment on the figures (14m)

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  • Listen to Shadow Treasurer Joe Hockey (7m)

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Text of media release from the Australian Bureau of Statistics.

Australia’s seasonally adjusted unemployment rate increased 0.1 percentage points to 5.4 per cent in December, as announced by the Australian Bureau of Statistics (ABS) today. [Read more...]