The Reserve Bank has raised the official interest rate by 0.25 per cent to an 11-year high of 6.75 per cent.
So argues Ross Gittins in today’s Sydney Morning Herald.
Surprisingly, a central question in the third last week of the election campaign is: what’s the role of the federal treasurer? If you think it’s to manage the national economy, that’s what you’re meant to think. But although the politicians on both sides want you to believe it, it hasn’t been true for a long time.
Consider the view of a prominent business economist, Rory Robertson, of Macquarie Bank. He says the job of any modern treasurer, Liberal or Labor, is not so much to manage the economy as to pretend to manage the economy.
“With few macro-economic policy levers to pull in Canberra these days, any modern treasurer’s job often resembles Head of Government Marketing – Economic. That is, it’s at least as much about absorbing incoming economic news here and abroad and providing upbeat economic commentary for public consumption, as it is about making macro-economic policy,” he says. “On a typical day, the job is to explain that everything is going very well, and ‘that’s because of us’. And, if everything is not going well, ‘it’s not our fault’.”
If, as expected, the Reserve Bank raises the official interest rate today, we’ll see Peter Costello doing a weird dance in which on the one hand he declines to accept responsibility for the rate rise while, on the other, claims to be far better qualified than Labor to guide the economy at a time when inflation and interest rates are rising…