1972 all over again, page-48

kincella
The government does not the control interest rates. THE RBA DOES, the treasurer sit with eleven(or was it twelve) other people and vote whether or not to change interest rates( in other words the gov virtually no power). The RBA is an independent body to the government and it is not labour's problem if interest rates rise. The only thing labour (or the government in general) can do is to alter the budget and use microeconomic policy to lower demand and supply inflation. The reason for the RBA to increase interest rates is to combat inflation and since inflation is above 3% in Australia it is their job to raise interest rates. The reason that Australian interest rates are riseing and America is falling is that we have a completely different economic situation. America is facing a recession with GDP growth vitually 0% while Australia is profiting from the demand for resources from China and India. Don't listen to John Howard keeping interest rates low, he can only do it indirectly not through controlling the RBA.