RBA cannot willy nilly go and drop rates unless there is a bigger problem lurking which would be a bigger concern for economy.
Banks offer higher yeild on thier bonds to attract external funding which they cannot get domestically (deposits - our housholds dont have much savings), so even if RBA goes out decrease cash rates banks may not be able to pass on.
but govs can carry out fiscal spending (eg tax rebates/grants/BER etc) to stimulate economy, resulting in deficit, but remember someone has to pay for it,
since gfc, Aussies in general have increased their mortgage/personal debts, we now have more than 1.2 trillion in mortgage/personal debts, compare this figure with our gdp and it is scary.
