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The Forum > Article Comments > Wanted: some out of the box thinking at the RBA > Comments

Wanted: some out of the box thinking at the RBA : Comments

By Jonathan J. Ariel, published 12/9/2019

The RBA has pushed interest rates down about as far as they can go and needs to look at other remedies to make the economy grow.

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You wrote that "No. They have not been pushed down about as far as they can go; they can go to zero or minus, as they have in Demmark".

But the reality is that lower rates did not raise business investment. In fact, Denmark is now at risk of a recession if growth in the world economy fizzles out. Both DK and AU are open economies, subject to global economic machinations, but DK is better off as it has 27 EU tariff free neighbours to work with. We don't.

If we lower rates to zero and investment remains unchanged, which is very likely because it isn't rates that so much determines if a company invests as the industrial relations landscape, what then?
Posted by Jonathan J. Ariel, Friday, 13 September 2019 1:15:56 PM
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Alan you write:

"The RBA is limited in what it can actually do! Not so the federal government! If we would boos the economy and grow jobs? We need low-cost energy, low cost desalinated water and the adoption of government facilitated and funded, employee-owned and operated co-ops".

But why should the taxpayer be on the hook for such multi billion dollar spending? Surely there is a MAJOR problem when rates are at rock bottom yet businesses are not scrambling to invest in such infrastructure. Why? Are the risks too great? Is the fact that they have to pay world leading wages the problem?
Posted by Jonathan J. Ariel, Friday, 13 September 2019 1:23:01 PM
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Alan you go on to write:

"Vastly cheaper energy is possible only as deprivatized publicly owned, not for profit enterprise or co-op owned and operated facilities".

I don't agree. Cheap energy can be provided by the private sector IF the gov't regulates a certain return on a company's investment AND manages the basis upon which that return is calculated. So that you don't get a repeat of the gold plating of electricity infrastructure that took place in the past with a singular objective: to maximise the regulated return on investment.
Posted by Jonathan J. Ariel, Friday, 13 September 2019 1:24:39 PM
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Several things come to mind.
Firstly, how is the economy supposed to grow?
It doesn't just grow because someone decided it should.
There are certain things that are holding back any form of production, let alone growth.
And that is; wages.
You can all scoff as much as you like, but as long as we are one the highest paid countries in the world, we're not going anywhere.
Now as far as our water, electricity and other entities that were public utilities, they need to be taken back.
And I mean TAKEN!
The bastards who own them now have gouged enough out of us, it's time to "drown the rats", and get on with our lives.
We must take back control of these public services.
The govt has the power to "re-possess"them without the blink of an eye.
I wonder how accommodating the govt would be if the whole country voted, in the form of a referendum or just made it known that we wanted those utilities back, and for free, would they follow through with the wish of the people, or would they chicken out and pull a Brexit?
We have allowed these pricks to sell off EVERYTHING, from the fixed assets to the transients like water.
Then instead of getting a leg up financially we have to listen to these bastards lying to us saying things like "we have been paying too little for our electricity, and this can't go on", why?
No while the majority of Aussies are worrying about a few queers and the correct name to call them, these mongrels are having a laugh, all at our expense.
There's your problem; until Aussies grab a brain and get off the drugs and the bloody sports, we're all going down.
I can tell you, for someone like me who has a better idea than most as to what's going on, it's killing me to witness the death of this country and ultimately it's people.
But don't you all worry about it, crack another tinny and turn up the footy.
Posted by ALTRAV, Saturday, 14 September 2019 4:32:13 PM
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Hey ALTRAV

You wrote:

There are certain things that are holding back any form of production, let alone growth.
And that is; wages.
You can all scoff as much as you like, but as long as we are one the highest paid countries in the world, we're not going anywhere.

My comment:

I agree. So long as we continue with a raw material export mentality and politicians that look after their own supporters, with little motivation to build a truly competitive economy with high value added manufacturing sector like the US, Germany, Israel or Singapore, we'll be parked at the station as you say, "going nowhere".
Posted by Jonathan J. Ariel, Saturday, 14 September 2019 5:01:38 PM
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Altrav,

Also, You wrote:

Now as far as our water, electricity and other entities that were public utilities, they need to be taken back.
And I mean TAKEN! The bastards who own them now have gouged enough out of us, it's time to "drown the rats", and get on with our lives.
We must take back control of these public services.

My comment:

I hear your critique, but your solution is not the only one to achieve your aim. Your solution, nationalisation or similar, would scare off foreign investment. What is far fairer and would achieve similar outcomes (desired by Australian consumers who are the former owners of the said infrastructure) is to legislate caps on how much the eye gougers can charge. And if the profiteers threaten to vacate the field claiming that the cap will make their businesses not viable, then let them vacate. Call their bluff. I am sure there are plenty of firms who'll happily move into this industry in their place,

You wrote:

We have allowed these pricks to sell off EVERYTHING, from the fixed assets to the transients like water.

My comment:
Selling per se is not IMHO, the problem. Selling in an asinine manner (ie without thinking through the ramifications) eg selling Sydney's Kingsford Smith Airport to a private company and giving that company the first right to develop/operate any new airport in the Sydney basin is appalling gov't behaviour, which only entrenched a consumer unfriendly monopoly and promised its shareholders rivers of golden returns.

The Americans can teach us a thing or two about running an economy: unlike ours, their major airports are not privately owned.

You wrote:
I can tell you, for someone like me who has a better idea than most as to what's going on, it's killing me to witness the death of this country and ultimately it's people. But don't you all worry about it, crack another tinny and turn up the footy.

My comment:
I don't doubt you. Maybe things have to get pretty dire here before most folk will wake up and smell the coffee.
Posted by Jonathan J. Ariel, Saturday, 14 September 2019 5:08:00 PM
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