KAP Federal Member for Kennedy Bob Katter has demanded urgent action to drastically cut Australia’s interest rate and bring us in step with overseas markets.
On Wednesday the Reserve Bank determined to cut the official interest rate to 3.23 per cent.
“The Reserve Bank must be congratulated on moving very “belatedly” in another reduction in interest rates,” said Mr Katter.
“However, the cut was miniscule. We are way out of kilter with the other advanced economies – 300% difference between all the other major players and Australia.
“According to the Reserve Bank of Australia’s international official interest rates, the US is at 0.13 per cent, EU at 0.75 per cent and Japan at 0.05 per cent.
“The high interest rate regime has driven our dollar through the roof making our exports expensive and our imports much cheaper.
“This has had a terminally destructive effective upon Australian manufacturing, tourism, agriculture and mineral processing.
Mr Katter said that the contention that the resources boom was driving up the dollar and interest rates therefore had to be used to constrain the consequent inflation is nonsense.
“How does the RBA now explain that the resource prices have dropped clean in half and the dollar throughout this period has risen in value?”
“Once again, our decision makers are way out of step; ‘but smoking their cigars, quaffing their Champagne and nibbling on tidbits in their ivory towers they blindly gloat that everyone else is wrong but they are right’.”