Yesterday’s
ABS report that 55,000 new jobs were created in March reinforces our
view that the failure to raise interest rates this week was a mistake.

We
find it difficult to comment further on the Reserve Bank transparency
fandango without drawing analogies with the way the Vatican operates.
We have seen a Mother Superior being disowned, a renagade Cardinal
claiming to have been misquoted, and the official spokeman reminding
all and sundry that the infallible one has not yet spoken. We are
forced to agree with the AFR‘s editorial today – “RBA should lift the veil.”

There’s
a far more interesting issue in this field – did the Reserve complain
that the government told porkies during the election campaign? See
stories by the Sydney Morning Herald and the Fin Review.
The PM’s reported irritation at the action of the Reserve reminds us of
Stalin’s famous question when told the Pope had some objection to one
of his actions: “How many divisions has the Pope?”

Incidentally,
the major newspapers and commentators seem to have totally ignored the
scary inflation figures reported by TD Securities and the Melbourne
Institute earlier this month. There also seems to be a shortage of
comment on the very strong jobs data reported yesterday by the ABS.

Read more here.

Peter Fray

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