The pundits were spot on! The Australian Reserve Bank did raise interest rates today - and now the PM and Treasurer are trying to lever off the fact. How bizarre elections are?
But does the Treasurer or Government of the day determine critical economic matters like interest rates? No, says economics commentator, Ross Gittins, writing in the SMH:
"Surprisingly, a central question in the third last week of the election campaign is: what's the role of the federal treasurer? If you think it's to manage the national economy, that's what you're meant to think. But although the politicians on both sides want you to believe it, it hasn't been true for a long time.
Consider the view of a prominent business economist, Rory Robertson, of Macquarie Bank. He says the job of any modern treasurer, Liberal or Labor, is not so much to manage the economy as to pretend to manage the economy.
"With few macro-economic policy levers to pull in Canberra these days, any modern treasurer's job often resembles Head of Government Marketing - Economic. That is, it's at least as much about absorbing incoming economic news here and abroad and providing upbeat economic commentary for public consumption, as it is about making macro-economic policy," he says.
"On a typical day, the job is to explain that everything is going very well, and 'that's because of us'. And, if everything is not going well, 'it's not our fault'."
If, as expected, the Reserve Bank raises the official interest rate today, we'll see Peter Costello doing a weird dance in which on the one hand he declines to accept responsibility for the rate rise while, on the other, claims to be far better qualified than Labor to guide the economy at a time when inflation and interest rates are rising."
Interestingly, ABC News reports on Treasurer Costello's confidence [with or without smirk isn't reported]:
"An ABC Local Radio morning show presenter says he had an off-air discussion with Peter Costello earlier this year, in which the Federal Treasurer told him interest rates would not rise this month.
This morning the Reserve Bank raised rates by 0.25 per cent to an 11-year high of 6.75 per cent, recording the sixth rate rise since the last federal election."
774 ABC Melbourne presenter Jon Faine says a couple of months ago he asked Mr Costello why the Coalition had not called an early election to get the campaign out of the way before the Reserve Bank decision.
Mr Faine says Mr Costello's answer surprised him.
"He looked me in the eye ... and said 'there will not be a rate rise in November, take it from me'," he said.
"I said, 'You might be right, you might be wrong, but you're prepared to punt on it?' And he said 'there will not be a rate rise in November'.
"Wrong, wrong, wrong."
But does the Treasurer or Government of the day determine critical economic matters like interest rates? No, says economics commentator, Ross Gittins, writing in the SMH:
"Surprisingly, a central question in the third last week of the election campaign is: what's the role of the federal treasurer? If you think it's to manage the national economy, that's what you're meant to think. But although the politicians on both sides want you to believe it, it hasn't been true for a long time.
Consider the view of a prominent business economist, Rory Robertson, of Macquarie Bank. He says the job of any modern treasurer, Liberal or Labor, is not so much to manage the economy as to pretend to manage the economy.
"With few macro-economic policy levers to pull in Canberra these days, any modern treasurer's job often resembles Head of Government Marketing - Economic. That is, it's at least as much about absorbing incoming economic news here and abroad and providing upbeat economic commentary for public consumption, as it is about making macro-economic policy," he says.
"On a typical day, the job is to explain that everything is going very well, and 'that's because of us'. And, if everything is not going well, 'it's not our fault'."
If, as expected, the Reserve Bank raises the official interest rate today, we'll see Peter Costello doing a weird dance in which on the one hand he declines to accept responsibility for the rate rise while, on the other, claims to be far better qualified than Labor to guide the economy at a time when inflation and interest rates are rising."
Interestingly, ABC News reports on Treasurer Costello's confidence [with or without smirk isn't reported]:
"An ABC Local Radio morning show presenter says he had an off-air discussion with Peter Costello earlier this year, in which the Federal Treasurer told him interest rates would not rise this month.
This morning the Reserve Bank raised rates by 0.25 per cent to an 11-year high of 6.75 per cent, recording the sixth rate rise since the last federal election."
774 ABC Melbourne presenter Jon Faine says a couple of months ago he asked Mr Costello why the Coalition had not called an early election to get the campaign out of the way before the Reserve Bank decision.
Mr Faine says Mr Costello's answer surprised him.
"He looked me in the eye ... and said 'there will not be a rate rise in November, take it from me'," he said.
"I said, 'You might be right, you might be wrong, but you're prepared to punt on it?' And he said 'there will not be a rate rise in November'.
"Wrong, wrong, wrong."
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