AWU Chief Urges Govt to Consider a Rethink on RBA Powers
The Australian central bank has been fairly consistent on rolling out its rates policies but its decisions were not of any help to the local economy.
According to Australian Workers Union (AWU) chief Paul Howes, it is high time for the federal government to consider a rethink of the Reserve Bank of Australia (RBA) charter, possibly to adjust its functions and push the agency to better serve the economy.
This year so far, the RBA has been consistent on its moves but Howes said the RBA board appears to be heading on the wrong side of the fence.
"The Reserve Bank has made the wrong call consistently and compounded those wrong calls,' Howes was reported by The Australian as saying on Wednesday.
He warned that if the RBA is allowed to have its way for far too long, many sectors of the Australian economy will continue to feel the pinch of its two-speed pace, the most pressing concern of which is the rising dollar.
The country's economic managers should have long intervened in guiding for the downward direction of the Australian dollar, the realisation of which, Howes said, would at least provide a breathing room for the manufacturing sector.
In fact, the AWU boss added, the RBA should have been more aggressive in imposing rate cuts this year, which should be the most effective way in easing down the country's monetary situation.
Howes has strongly called on Prime Minister Julia Gillard to consider a revision of the RBA charter and act soon lest "they're going to continue to see substantial job losses not just from manufacturing but our whole dollar exposed sector of the economy."
Right now, the steel industry appears to be the most vulnerable sector just because the Australian dollar pushes up almost relentlessly and the RBA has been holding back on rate cutbacks, Howes said.
In an interview with Sky News, Howes warned that if the present situation continues, thousands more in the steel industry will lose their jobs and eventually "we could be heading for some dark days ahead if we lose such a valuable industry as manufacturing."
"The steel industry underpins the entire manufacturing industry in this country and if you don't have steel being manufactured here you don't have anything manufactured here," Howes said.
Before the present economic conditions further deteriorate, Howes is hoping that the government would come to its good sense and realise that the RBA has for the most part bungled its job.
"I do not think that the governance of the RBA is infallible and I think it is right for us as a nation to have discussions about when the RBA gets it wrong and this year they have consistently got it wrong," Howes told ABC on Wednesday.
His suggestions, however, do not sit well with the Labor-led government as Finance Minister Penny Wong insisted that "the current settings (of the RBA) have served Australia well."
The government, however, also aims to pull down the existing interest rates, according to Senator Wong, but it would naturally happen once the federal government achieves the surplus next year.
And having a say on how the RBA conducts its business is currently not in the option of the present government, Senator Wong stressed.