RBA refusal to cut rates is costing jobs: CFMEU

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RBA refusal to cut rates is costing jobs: CFMEU

The CFMEU has condemned the Reserve Bank Board for not cutting interest rates yesterday, saying that by sitting on its hands the RBA is costing Australian jobs.

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The CFMEU has condemned the Reserve Bank Board for not cutting interest rates yesterday, saying that by sitting on its hands the RBA is costing Australian jobs.

CFMEU national secretary Michael O’Connor said it was disappointing to see the RBA fail to relieve pressure.

‘The RBA unfortunately seems to be completely blind to the fact that there are huge swathes of the Australian economy that are doing it very tough at the moment,’ O’Connor said.

‘Our dollar is being artificially boosted by foreign central banks, interest rates are higher than just about anywhere else on the planet and that’s making it very hard for our manufacturing sector to compete.’

O’Connor said the Reserve Bank Act 1959 explicitly states that the RBA must ‘best contribute to … the maintenance of full employment in Australia’.

Failure
 
‘A rate cut would have undoubtedly assisted the manufacturing sector to hold on to Australian employees,’ he said.
 
‘The RBA’s failure, therefore, is obvious. This will cost jobs.’

‘Last month’s historically low CPI numbers completely cleared the path for the RBA to step in and relieve pressure, but they have stubbornly refused to take the obvious steps forward.’

‘The decision represents a real blow for jobs, for manufacturing and for other sectors of the Australian economy that are doing it tough in present conditions.’

O’Connor said the dollar is being artificially boosted by foreign central banks.

‘Interest rates are higher than just about anywhere else on the planet and that’s making it very hard for our manufacturing sector to compete,’ he said.

Sluggish
 
‘Meanwhile construction is sluggish and homeowners are finding it hard to balance household budgets.’

‘With inflation now actually well below the RBA’s target range of 2% to 3%, it was a golden opportunity for the Reserve Bank board to relieve the pressure and lower rates.’

‘I’m sure they have their reasons for sitting on their hands — I just bet they’re not as good as the reasons for providing relief through a cut.’

‘Aside from the direct relief a rate cut can provide, it would also help to apply some much needed downward pressure to the dollar. If the Reserve Bank lets the dollar float way out above commodity prices, they will end up needing to take more direct action to bring it down again.’
 
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