Now for the really hard bit: the economic recovery, controlling it and making sure we can afford it.
Kevin Rudd warned a lot about the hard decisions in his 6000-word feature in the Sydney Morning Herald (any contributor’s rates for the PM?), now the bloke whose job it is to make sure recovery doesn’t become bubble and we go all bust again, has weighed in with a shorter speech of his own.
Of the two, the one today [PDF] by Reserve Bank Governor Glenn Stevens will carry more weight with markets, investors and most voters, than the meanderings of the PM.
According to interpretations of the speech, there will be no more rate cuts and could be a rate rise or two by the end of the first quarter of 2010.
Mr Stevens didn’t say that directly; he can’t, he’s a central banker and despite the improving economic conditions, things are still a bit fragile in the markets and among consumers. We could still have another nasty collapse that plunges us right back into doom and gloom.
But that’s the market’s take on it: the futures market agrees and is now pricing in a 1% rise in the RBA cash rate by next July to 4%. That could be a bit too much, but it is now a very real possibility for the Australian economy, especially if confidence, building approvals, exports, retail and car sales and a few other factors keep improving like they have done since March.