Michael Pascoe

The Reserve Bank’s headquarters is in
beautiful downtown Sydney, sitting atop Martin
Place, but that won’t stop
the Governor kicking his home town in the head next week.

Ian Macfarlane’s parting gesture as RBA
Governor is likely to be a final attempt to drive the battlers out of Sin City towards the Queensland and
West Australian frontiers. The rate rise will hurt Sydney most –
something that Premier Dilemma will be acutely aware of running up to the March
state election.

NSW is already underperforming the nation,
with its unemployment rate rising as Australia’s
falls. Yesterday the departing Sydney Chamber of Commerce head, Margy Osmond, made a plea for business to pick up the slack from government failures in
keeping a spot for Sydney at the table of global cities. Her lament reflects a
feeling that the city has been losing its way ever since the Olympics.

The RBA’s determination to rein in the
exuberance and skills shortages flowing from the resources boom will add to
that sense of loss. Premier Dilemma’s massive spin machine will have a devil of
a job papering over the widening cracks before the election, with their only
good fortune being that their opposition is the Liberal Party.

Rising unemployment, falling business
confidence, failing infrastructure and declining house prices set against
rising mortgages doesn’t sound like much of a formula for any government to
stand on its record.

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Peter Fray
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