Via the local Australian public broadcaster, the ABC:
- BT chief economist Chris Caton says the RBA governer’s attendance at a Cabinet meeting yesterday does not compromise his independence. Chris Caton says he doesn’t entirely agree with the Treasurer’s interpretation of the RBA rate cut and that if Mr Hockey seriously regards fighting debt and inflation as the main game, he has taken his eye off the economy.
Goes on:
The cut yesterday
- “reflects the fact that we’re still having difficulty with the transition from growth led by mining capital spending to growth led by something or anything else
- The Australian economy currently growing below trend, the unemployment rate probably still trending upwards, and the fact that very few people have given the weight it deserves, I think, is the monetary easing all over the world
- That gave us cover to ease, growth is below trend, inflation is comfortably low also, so the Reserve Bank has pretty much said, we may as well do this.
And this on Reserve Bank of Australia governor Stevens’ attending a party-room (cabinet) meeting (from interview transcript):
- ELEANOR HALL: Now Joe Hockey was also trumpeting a major break in convention yesterday, with the RBA governor Glenn Stevens attending the party room meeting.
You’ve been a strong defender of the independence of the central bank, does this compromise this independence? - CHRIS CATON: I doubt that very much indeed. You know, I doubt they took Glenn out the back and beat him with a rubber truncheon.
My suspicion is that he was there as a source, if you like, to provide the party room with his assessment of how the Australian economy is travelling.
I doubt very much whether he was summonsed and was there under any duress whatsoever.
–
Stevens briefed a federal cabinet meeting on Tuesday for the first time in 10 years
