Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Emergency is over, but no rate rise for Christmas

By Henry Thornton - posted Tuesday, 1 December 2009


Australia is of course a developed nation whose consumer spending should fall in relation to income, and hence we are on the wrong side of the imbalances divide. But with the amazingly rapid recovery of Chinese growth, the renewed resource boom will underpin Australian activity and provide time to adjust.

Higher taxes will include a resource rent tax and, one assumes, some sort of pollution tax, although the diabolical climate change problem is wreaking havoc on Australia's more conservative political party.

As argued powerfully by several participants at the recent Melbourne Institute-The Australian conference, a strategy is needed to ensure that we don't simply waste the renewed resource boom but use it to improve substantially national investment and productivity, boost savings (to help contain inflation and the current account deficit) and fund adjustment to a low-carbon future.

Advertisement

Easier said than done, comrades, but the sooner we can agree on a viable plan the better will be the outcome for our children and grandchildren.

There is a massive agenda ahead of the nation. Glenn Stevens' task is to make sure inflation remains under control whatever the global risks and uncertainties and the pain of domestic adjustment.

Ideally, interest rates would be nearer to neutral now, ready to be raised if inflation (defined broadly) shows signs of breaking out.

Today, I expect caution to prevail. Global uncertainties are greater than they were a month ago, asset inflation has taken a hit following a renewed debt scare and goods and services inflation here is no worse.

Besides, no one wants to wreck Christmas, and Stevens is no Grinch.

  1. Pages:
  2. 1
  3. 2
  4. Page 3
  5. All

First published in The Australian on December 1, 2009.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

7 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Henry Thornton (1760-1815) was a banker, M.P., Philanthropist, and a leading figure in the influential group of Evangelicals that was known as the Clapham set. His column is provided by the writers at www.henrythornton.com.

Other articles by this Author

All articles by Henry Thornton

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Henry Thornton
Article Tools
Comment 7 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy