Today’s RBA decision to cut interest rates by 0.25 per cent is a good first step to put downward pressure on the dollar, but the manufacturing sector needs a further rate cut to preserve jobs,
CFMEU National Secretary, Michael O’Connor said today.
The CFMEU has seen the effect of the resources boom, high interest rates and the high dollar first hand over the last nine months, as jobs have been shed in the manufacturing sector.
Mr O’Connor said today’s cut should be followed up with a further 25 basis point reduction when the RBA next meets in December.
“Today’s interest rate cut is a good start, but we need sustained downward pressure on the dollar and interest rates to kick start employment growth beyond the resources sector,” Mr O’Connor said.
“Inflation is slowing and the global economy remains sluggish, so there is significant scope for further rate cuts.
“While the resources sector is crucial to the Australian economy, it can not be allowed to crowd out other trade exposed sectors that employ more people and drive demand, particularly in the non-resource sector states.”
Mr O’Connor pointed to section 10 of the Reserve Bank Act, which stipulates that the RBA must:
best contribute to… the maintenance of full employment in Australia; and the economic prosperity and welfare of the people of the Australia.
In addition, section 10B(a) states that:
the Bank’s payments systems policy is directed to the greatest advantage of the people of Australia.
“The RBA needs to factor employment and job security more clearly into its deliberations,” Mr O’Connor said.
