RBA: No inclination to rock boat before storm

No doubt, when it happens, the RBA will emphasise that the target is only an "average over the course of the economic cycle", whatever that means. Of course the oil price increase will distort spending patterns and is likely to delay any switch to increase saving.

There are of course other risks in Australia's outlook. We can be pretty certain that one risk not to be discussed around the board table is the very large current account deficit, which has blown out to levels which might well attract international opprobrium. Burned in the late 1980s for tightening to rein in such a deficit, the ex-officio members of the board will be urging their colleagues to not mention the war. Basil Fawlty would be proud of them.

While these things resolve themselves in the market's mind, the RBA board may let its attention wander. The Governor has already been dishing out advice to the Chinese, urging on them a floating exchange rate after their 30 years of market development - a move that took Australia 80 years from Federation. Such is economic progress in the countries to our north. Other candidates for advice, if diversion is needed, include New Zealand, where the central bank governor seems determined to run the economy aground (again).

Of course, Australians want their governments to spend up on infrastructure too, and we shall watch with interest the tussle over the Future Fund's pot of gold. The board has to work out how to handle the $16 billion shrinkage in the assets and liabilities on the RBA balance sheet implicit in the fund's establishment.

Without an interest rate change to discuss, perhaps the lunchtime conversation will turn to whether the board should take a pay cut when the RBA is more than 20 per cent smaller.