Apr 22, 2014

Hockey sings the 94 US cent budget blues — and wants the RBA to join in

If Joe Hockey is unhappy enough about the strong dollar to compromise the independence of the Reserve Bank, he should try being Treasurer when it's above parity, write Glenn Dyer and Bernard Keane.

Joe Hockey

It’s hard to know what to be more alarmed about in the important story The Australian Financial Review’s Laura Tingle broke today about Treasurer Joe Hockey pressuring the Reserve Bank: the government’s casual contempt for the RBA’s independence or the sooking of Hockey and Co. about the effect of the dollar on the economy.

In October last year, Hockey declared that his payment of $8.8 billion to the Reserve Bank would “enhance the independence of the bank in conducting its operations”. Now, according to Tingle’s article, the RBA is being too independent in its conduct of monetary policy because Hockey wants the bank’s “easing bias” back and the dollar lower for fiscal reasons. Hockey has, we’re told, conveyed that directly to the bank in an effort to influence its decision-making.

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5 thoughts on “Hockey sings the 94 US cent budget blues — and wants the RBA to join in

  1. leon knight

    Hockey would be strangely out of place in the Abbott cabinet if he demonstrated significant levels of competence or honesty.
    What a team of adults Abbott has surrounded himself with – not one of them worth their salt, and the AG is a boorish fool.

  2. paddy

    It’s all very well for the govt to claim the “grownups” are back in charge.
    But it’s a bit worrying when they appear to be fundamentally innumerate.
    The impending budget looms as decidedly “interesting” and very unpleasant.

  3. JohnB

    One sure fire way to balance the federal government’s books is to wreck the prospects of the majority of Australians by driving inflation through the roof, the Aussie Dollar to 60 cents US and drastically curtailing government spending?

    Treasurer Joe may get the exchange rates he craves and might get a real power surge as he uses social class as the sole determinant of spending priorities (tax the poor and reward the rich), but does he really want the full package, including unemployment, voter anger and locked-in limits on government’s ability to actually get things done, to deliver its programs?

    Historically, the $A has been above $1.50US and as low as 50 cents. Only in recent years has it been claimed that the “right” value of our dollar is 50, 60 or 70 cents.

    When is Joe going to explain what was wrong about Australia’s “9A’s” credit rating which he inherited from Treasurer Swan and what is great about creating the next home-grown depression?

  4. Rod

    It is becoming clearer by the day that the Abbott government never had the skills or ability to run the country. Their election was based on lies and fear and now the chickens are coming home to roost. For the LNP it is government for the privileged and a desire to feed greed. Lets hope Labor gets its act together as the damage being done to Australia by these LNP fools will be felt for many generations to come.

  5. CML

    If Joe wants to fix his budget bottom line, perhaps he should be having a read of the study released this morning by the Australia Institute.
    Heard Richard Denniss, from AI, on ABC radio this morning, saying that if the concessions on superannuation, mainly benefiting the wealthy, were removed, the budget would be better off to the tune of $50 BILLION per year. Apparently in the next few years, the revenue foregone by these concessions, will be higher than the total cost of the Aged Pension!!
    Also, Denniss said that he had been made aware of one SMSF worth $100 million dollars. Now that is ‘tax avoidance’ on a grand scale!!
    As mentioned previously, only the wealthy!!!

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