Glenn Stevens, Governor of the Reserve Bank of Australia, meets Clarke and Dawe and responds to criticism from union leader Paul Howes.
BRYAN DAWE: Mr Howes says the Reserve Bank has the wrong interest rate policy and fears for job in industry.
JOHN CLARKE: Does he? Does he say why?
BRYAN DAWE: He says the cost of Australian goods are too high.
JOHN CLARKE: Is the term “cost of labour” used at any point in his no-doubt-penetrating analysis of what the adults are thinking about in the other room?…..
via 7.30 – ABC.
I would have quoted this bit:
BRYAN DAWE: You’re welcome. Mr Howes’ argument is that by failing to lower interest rates you’re sending jobs overseas.
JOHN CLARKE: That’s not an argument, that’s finger pointing. Mr Howes might know what he’s talking about in other areas, but he makes quite a common error here in assuming that if you lower interest rates, Brian, you reduce upward pressure on the exchange rate. What very often happens if you lower interest rates is that people spend more, and ultimately you’ve got to put interest rates up.