SYDNEY - Australia’s central bank on Friday called on all levels of government to “put all shoulders to the wheel” to fund the spending desperately needed to generate jobs and drag the economy out of its deepest recession in about a century.
Having slashed its cash rate to a record low 0.25% and implemented a bond buying programme in mid-March, Reserve Bank of Australia Governor Philip Lowe said there were limits to what monetary policy could do. “If we get to the point where we think that we would get traction and make a difference to jobs and economic performance then we’re prepared to do it. I think right at the moment we’re not at that point.”
Lowe said it was not the cost or the availability of credit that was deterring businesses and individuals to spend but the pandemic-driven shutdowns and a lack of “dynamism” in the economy which can only be fixed by the government.
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