The Reserve Bank has announced unprecedented and welcome measures to tackle the intensifying jobs crisis and support the economy following Scott Morrison’s underwhelming budget.
These extraordinary steps are a vote of no confidence in the Government’s JobFaker budget, announced less than a month ago.
The RBA has been forced to enact its most radical program on record in response to the Morrison Government’s premature cuts to vital economic supports like JobKeeper during the worst recession in almost 100 years.
Today’s RBA statement reveals that in the face of damaging cuts to Government support:
- It will undertake the unprecedented step of purchasing $100 billion of bonds with maturities of around 5 to 10 years;
- The cash rate has been slashed to new record lows of 0.1 per cent, with 6 interest rate cuts in less than 18 months;
- Interest rates have been slashed on exchange settlement balances and on drawings under the Term Funding Facility; and
- The target for the yield on 3-year Australian Government bonds has been lowered to around 0.1 per cent
After being caught out inflating their own job creation estimates by nearly one million, the Liberals and Nationals now seem content to leave more of the heavy lifting to the Reserve Bank.
Australians deserve a Government that chases jobs not just headlines.
Decisions taken by the Liberals and Nationals mean that the Morrison Recession will be deeper than necessary and the unemployment queues longer than they need to be.
These decisions are already being felt in the economy, with today’s significant fall in the consumer confidence measure of ‘current financial conditions’ attributed to recent wind-backs of JobKeeper and JobSeeker payments.
The Prime Minister has been slow to act during this crisis, and his Government’s deliberate decisions to exclude Australians from support mean the only lasting legacies of this crisis could be higher unemployment for longer and a trillion dollars of debt.
TUESDAY, 3 NOVEMBER 2020