Angus Livingston, AAP National Economics Writer
(Australian Associated Press)
Not even the Reserve Bank can explain why the Australian economy is slowing down, but Labor believes the coalition government is sitting on its hands at the worst possible time.
Jobs vacancies dropped for the eighth month in a row, as Reserve Bank Governor Philip Lowe flagged another potential interest cut rate next week to a record low of 0.75 per cent.
“Part of the slowing in the Australian economy remains unexplained,” Dr Lowe said on Tuesday night.
“We are seeking to understand what is going on here. It is possible that it is just measurement noise, but we can’t yet rule out something more structural.”
Labor finance spokeswoman Katy Gallagher says the government needs to ramp up spending to lift the flagging economy.
“There is a role for the government to play. It can’t just sit on its hands and pretend that they need to do nothing further,” she told reporters in Canberra on Wednesday.
But Trade Minister Simon Birmingham stuck to the government’s lines about global uncertainty and the coalition’s personal income tax cuts and trade deals being enough.
“We can’t control circumstances like Brexit, the US-China trade wars, or domestic issues in the US political environment,” he told reporters in South Australia.
“What we can do is try to provide Australia businesses with maximum opportunities to sell their goods and services to the world and to build as much resilience as possible in the Australian economy.”
But everyone from economists, businesses, unions, Labor, and the Reserve Bank wants the federal government to raise Newstart to inject money into the retail economy, and bring forward infrastructure spending.
“We’re saying that there are concerns, that concerns are not just being raised by the Reserve Bank, they are being raised by other economists,” Senator Gallagher said.
“The OECD has revised back Australia’s growth. It’s not just the Labor party saying this and we think there is a role for the government to step up and actually make some decisions.”
Dr Lowe hinted at further rate cuts to be announced at the RBA board meeting next week.
“The board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, make further progress towards full employment, and achieve the inflation target over time,” he said.
It comes as the number of jobs advertised online dipped 0.1 per cent in August, the eighth month in a row in which a fall was recorded by the federal government’s Internet Vacancy Index.
The numbers indicated a drop of 200 ads from the previous month and a six per cent slide in listings in the past year.