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You have to hand it to Phillip Lowe. The Reserve Bank governor has a great bedside manner. Speaking at a business event in Sydney on Tuesday, he calmly told Australians they should prepare to be prescribed more unpleasant medicine in the form of interest rate rises. Acknowledging the pills would be bitter for some, especially those who had recently borrowed the maximum the banks would lend them, he also reassured us that, overall, we were in pretty good shape.
Interest rates were still low, terms of trade were at the highest ever, employment was strong, and borrowers had squirrelled away considerable savings during the pandemic which would act as a buffer to ease the pain as mortgage payments increased. Yes, there was a need to lower the fever in the economy - to bring down inflation - but, no, there was no sign of recession on the horizon. These soothing words, delivered with the evenness of a longstanding family GP, were a comforting balm after all the shrill headlines of the past month. Still, Lowe was careful to add a caveat - that this was the prognosis now and conditions could change.
It was the governor's second public outing in a week - he gave a rare interview to the ABC's 7.30 program last week. It's been a departure from the normally tightlipped Reserve Bank and one we should welcome. After all, decisions his board makes can have a big impact on all of us.
Lowe's presentation - and his willingness to take questions after it - was frank and forthright. The governor made it clear discussions around the next interest rate announcement due in two weeks would again look at an increase of between 25 and 50 basis points. Monetary policy, determined independently by the Reserve Bank, is one lever of economic machinery which ought to share the stage with the other lever - fiscal policy, which is set by the government.
It's been refreshing to see the discussion come out in the open.
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IN CASE YOU MISSED IT:
- Australia's manufacturers are facing the most challenging times in 50 years due to supply headwinds and escalating costs but are benefiting from strengthening demand, a new survey has found. The latest Australian Chamber of Commerce and Industry-Westpac industrial trends survey showed business conditions are expanding and gained momentum in the June quarter.
- The International Rugby League has followed the lead of swimming's world governing body FINA by banning transgender athletes from sanctioned international matches. The decision will prevent male-to-female athletes from competing in this year's Rugby League Women's World Cup in England.
- A new on-the-spot test for COVID-19, the flu and other diseases has been developed by researchers in the US and Australia with the potential to return results in as little as five minutes. The process can test for hundreds proteins at a time with the data produced able to be read using a smartphone.
THEY SAID IT: "Monetary policy is a blunt tool which certainly affects the distribution of income and wealth, although whether the net effect is to increase or reduce inequality is not clear." - Ben Bernanke
YOU SAID IT: "Assange's case should be treated in the same way as David Hicks' was. We got him home!" - Brian
"I am not thinking Assange is totally blameless but his self imposed isolation in the Ecuadorian Embassy and now imprisonment is a long time of incarceration and as pointed out the other person involved is now free, what will further punishment accomplish?" - Elaine
"Of course the whole pursuit should be dropped. As Albo says, it has gone on far too long. We now have a generation of young teenagers/adults who don't know what it is all about. The guy has suffered far more than he originally deserved. He certainly won't want to add to his woes if released from gaol and allowed to return to Australia with his family." - Gordon
"It's ironic that megaphone politics has not helped Julian Assange and his only real chance of freedom will be through the quiet diplomatic back channels that Wikileaks seeks to expose." - Ian
"He told the whole world, the truth, which America wanted kept hidden. He is a hero! If we have the Nuremburg trials again, America will be found guilty and they don't like that." - Sylvia
"All governments have ignored and left Assange to hang out to dry. What a disgrace that an Australian has been deserted by his country. Hang your heads in shame. What a bloody disgrace." - Wayne
"Re Julian Assange, I don't know if I'd like him if I met him, but that's not unusual. And while he brought to the world's attention the shocking pictures of the strikes on civilians, he also released a trove of unredacted and unchecked info which could have resulted in great loss of life. But it didn't. So let Albo do his quiet diplomacy. It will be a welcome change. And we may get Assange home soon." - David
"Hopefully, Biden has the intelligence to let Assange go, after all, as you say, Obama pardoned Chelsea Manning in 2017, who provided the information. And what's wrong with informing the public about government and/or military misdeeds? The real criminals should be on trial." - Lynne
"It seems to me that Julian Assange would almost have been better off facing the music in the US Ccurts rather than shifting from embassy to embassy these past years. If he was truly innocent of any wrongdoing, surely he would have been able to secure the appropriate legal representation to defend his alleged misconduct." - John
"No, he should face the consequences for his actions. It has dragged on so long because he hid in the Ecuador Embassy avoiding being sent to Sweden to face charges of rape and the USA. Every country has the right to seek justice if a crime is committed in their country, including Australia. This is why countries have extradition orders/agreements for this very reason. Albanese should not be setting a precedent with Assange and interfering." - Wendy
"No he made the decision to release the documents. He should have taken the punishment at the time. He placed himself in hiding instead of facing up to and standing by his decision. He has not been incarcerated he is a coward. I am not saying his sentence should be a really lengthy one but the law is the law. I have no sympathy for him whatsoever." - Diane
"In Tuesday's newsletter Veronica used the expression 'the Commonwealth' in her comment. I think we should use it more often. One small but simple change that the new Commonwealth Government could make is to return to using the word 'Commonwealth' when referring to the national government. Let's move the focus in Australia back towards an awareness that we are a community (not an economy) working together for our mutual and common good." - Chris
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