Originally posted by XBenX
Pitt St and myself will debate just how much effect what the govt would like to happen has on the outcome
But despite what either of us would say its not as easy as JH puting rate hikes on hold until after the election.
Wouldn't be like you and I to disagree, would it Ben?
On this, I think we pretty much agree.
Although depending on which side of the bed I got out of, I sometimes take a more conspiratorial viewpoint.
As for Johnnie talking up the closeness of the election?
Well a week is a long time in politics....
but I just think he wants to try and play the underdog, when really the ALP has a snowballs chance in hell of winning.
Originally posted by Jean
Hi XBenX
But you will concede that consultation does occur.
Let history judge.
It is true that the Treasurer's top economic adviser (the Secretary to the Treasury) sits on the RBA Board.
I think it is also safe to say that:
1. The Treasurer has advance warning of what the RBA is doing - particularly if they are planning to either increase or decrease interest rates.
2. The RBA, whilst strictly independent, would never, IMHO, do anything completely off the dial which would make the Treasurers main job (the Budget) an impossible task. I have said as much as this before. Monetary Policy (interest rates) are important, but cannot be used for economic fine tuning - they are a blunt instrument. Fiscal and other policies do this. IMHO, MP is like a slab of concrete on which the economic policy house is built.
3. You don't bite the hand that feeds you. McFarlane has just been re-appointed by the Treasurer for a further 3 years. I don't believe that Costello would have reappointed him unless he was completely happy with how the RBA has conducted itself.
4. At the end of the day, Johnnie holds the "ace" which says "I am the Prime Minister and I can take an interest in any issue which interests me". Johnnie's ace is a trump card. Nothing beats it. So, if interest rates truly became an election issue (and I don't think they are), then Johnnie could easily deal himself into the game. Lets not forget, once upon a time Johnnie was Treasurer too.
MB