By Senator Gerard Rennick
Labor Treasurer Jim Chalmers has recruited Andrew Hauser, a banker from the Bank of England, to be Australia’s new Reserve Bank of Australia deputy governor. Why does Australia need a foreigner to run our Central Bank? Furthermore, the RBA refused to release the audit findings of Australia’s gold reserves held by the Bank of England.
of the smartest economists
ever in the Liberal Party
takes former RBA Governor
Phillip Lowe apart over
monetary policy
Hauser has insisted that the RBA’s primary focus is on achieving a specific level of inflation, not targeting a particular interest rate. In his first public comments since starting the role in February, Hauser also noted the dangers of central bankers making predictions about future interest rates.
It’s a bit late for that given that’s exactly what Phillip Lowe did when he said he wouldn’t raise interest rates until 2024 and then raised them 11 times before 2024.
If the RBA is truly committed to tackling inflation, it should issue low-cost bonds to federal and state governments for infrastructure projects to increase the supply of essential services, instead of imposing austerity through rapid interest rate hikes.
For those unfamiliar with accounting, when a government-owned bank issues bonds for infrastructure it will also own, it is essentially issuing equity (shares). The earnings from both the infrastructure and the bonds will return to the government. This is in contrast to the Government using debt to fund infrastructure, whereby the interest and capital generated by the infrastructure has to be repaid offshore.
Meanwhile, RBA Governor Michelle Bullock told Senate Estimates that the term ‘per capita recession’ was not useful as recessions referred to “losses of jobs and human difficulties”.
If job losses and human difficulties are not useful as an economic indicator, then I don’t know what is. Talk about out of touch. Above is a segment from 2022 of a conversation with former RBA boss Phillip Lowe regarding this exact issue.
