The role of the Reserve Bank, from their own website - The Reserve Bank of Australia's (RBA) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term.
You would think the boffins on the RBA board would be on a pretty good wicket, so between them, why can't they come up with a better way of managing inflation, instead of stinging mortgage holders every single time. There's approximately 70,000 mortgage holders in Australia, 70,000 singles and/or families that are shouldering the load for 21 million people. This is bullshit. There must be millions of people who piss themselves when rate rises are announced, it doesn't affect them and probably never will. I used to be one of them.
I don't know what the answer is, but surely there is a more equitable way to slow down or quicken the economy than fiddling with interest rates. Surely increasing income tax rates would do a more complete job than the current process, as would decreasing the rate when necessary.
I just think for the money these blokes are paid, you'd think they could do a better job.
2 comments:
Interest rates are at all time lows still.
If you borrowed not expecting them to come up then you didn't do your homework.
It would be a nightmare if income taxes were changed 6 or 7 times a year and an accountants dream. There's always a trade off when changes happen with the economy and as you said there are no easy answers.
Certainly the US fucked up when interest rates came down to zero to try and make everyone a home owner to stimulate their economy. As everyone knows when you give money to people notorious for not paying it back or unable to pay it back the likelyhood is exactly that - no paying back.
If interest rates were up slightly more and loans were given to people who can afford them, like they used to do then we wouldn't be in the shit we are in.
Agree - Bowie's off the mark again!
And if you borrowed when rates were low and didn't expect them to go up again then it's more than a lack of homework - you're an idiot!
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