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Those conditions sing exist now. Who cares what the RBA rate is, let's talk about what mortgagees are paying on loans now. If the Australian government wanted
by TheSpiceIsLife 4y ago
Those conditions sing exist now.
Who cares what the RBA rate is, let's talk about what mortgagees are paying on loans now.
If the Australian government wanted to take money out of the supply it could, for example, (temporarily?) increase the GST and use that tax revenue to either / both pay back government debt or use it to ... pay public servants more.
This concept that "the RBA only has one tool" is true as far as it goes, but obviously not the only way of tackling the issue.
- Khaine 4y agoThe rates you pay on your mortgage is strongly correlated with the RBA interbank rate. You are absolutely right, the government could increase the GST to reduce demand. That would be political suicide, but fiscal policy absolutely can play a role. The government has abdicated from this, so it can blame the independent RBA and banks.