Less about the rates but more about the selection process for post such as those on the RBA: henry's notion that we should adopt a American style system for vetting such appointments need further airing: I think it is a belter of an idea and had the same thought myself as this sad saga re the man from clipsal unfolded:

Why do we stockpile Australias richest individuals on the RBA board? We put people like Gerard and Lowy in charge of interest rates. Isn’t this a form of crony capitalism that should have been discredited by now? Some might call it plutocracy.

Our “monetary system” is best described as “prudent opportunism”. However I doubt that it serves the interests of the markets in general or the wider community.

Gerards crime, and Costellos by inference, was to bring the RBA board into disrepute. However the whole system should be in disrepute.

If we must have a central bank then its charter should be to ensure that the value of our money/(currency) is stable. Not to mess about with the price of credit risk.

Costello should sack the entire RBA and institute a currency board tasked with keeping the aussie dollar stable with respect to a basket of commodities. Not unlike what Keynes proposed with the Bancor or what we had during the gold standard.

http://en.wikipedia.org/wiki/Bancor