RBA should butt out of foreign relations

Its position is preposterous and untenable on immigration. From Bill Evans at Westpac yesterday:

The minutes of the November meeting along with a recent speech from the Governor emphasise a significant pivot in the Board’s approach to monetary policy. The labour market now takes centre stage.

Consistent above trend growth will be required to lower the unemployment rate and deliver a ‘tight labour market’.

Sure, so why is Phil Lowe saying this:

Australia needs an influx of skilled migrant workers to get the economy powering again after the coronavirus pandemic, the Reserve Bank says.

Speaking at a forum on Monday night, RBA governor Philip Lowe said Australia would have to look offshore to fill jobs due to the major slump in domestic population growth caused by hard international border closures, which could stay until at least the end of 2021…

“The fast population growth of recent decades has been a major factor shaping our economy,” Dr Lowe said in his speech to the Committee for Economic Development of Australia.

“It has underpinned our relatively fast growth in GDP (gross domestic product) compared with other advanced economies”…

Dr Lowe said wage growth and price pressures would remain subdued while unemployment was above 6 per cent.

“It does, though, seem highly probable that one of the marks the pandemic will leave is an extended period of higher unemployment than we have become used to. Addressing this is an important national priority,” Dr Lowe said.

THEY ARE NOT SKILLED. From HomeAffairs’ Continuous Survey of Migrants:

As shown above, migrants have significantly worse labour market outcomes than the general population. Specifically:

  • The median annual full-time earnings of migrants was $16,500 (22%) below the general population in 2017;
  • The median annual earnings of migrants was $5,900 (10.2%) below the general population in 2017; and
  • The unemployment rate of surveyed migrants (12.6%) was more than double the general population (5.5%) in 2017.

The two RBA positions are completely contradictory.  If you want wages growth then do not widen the output gap with mass immigration. Australia currently has the largest underutilisation in modern history:

Then yesterday we get this from Phil Lowe:

“China has benefited from our natural resources exports and we have benefited from its manufacturing imports,” he said.

“We need to keep that strong relationship with China going. It is mutually advantageous for both of us.”

Butt out of foreign relations, RBA. It’s not in your charter. You’re making a hash of it. And it’s none of your business.

David Llewellyn-Smith
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Comments

  1. The Traveling Wilbur

    If the RBA were to start implementing foreign policy, their first port of call should be to buy Chinese Government Bonds and then let the chips fall where they may.

  2. Calling it now for all China sympathisers to be on the front line defending Australia when Chinese warships built with Australian iron ore come visiting with ill intent…

  3. pfh007.comMEMBER

    Unfortunately this is what happens when people demand the RBA go full neoliberal and buy shedloads of rich persons assets to inflate and support the value of those assets and to manipulate the cost of credit so credit worthy rich people can buy up any remaining assets that generate a return.

    Having demanded that the RBA explicitly wade in and help out the big end of town with “stimulus” is it really any surprise that the RBA is now happily sprouting lines about open borders and cheap labour ?

    The RBA is clearly enjoying the freedom of not having to pretend anymore in whose interests it acts and what ideology pumps through its veins.

    Free Trade

    Free capital flows

    Open borders.

    Australia you have arrived at your noeoliberal destination.

    Relax and enjoy the view.

      • Display NameMEMBER

        It always there was for anyone looking. I must have read 2 or 3 articles in the SMH either by Lowe or quoting Lowes mystification at the inability of wages to increase. Puzzled he was. Allegedly. This is the same MIT PHD championing record migration flows that keep the labour market slack firmly over 10% and towards 15%. And its a mystery why wages are not moving? in fact going backwards mostly. Disingenuous at best.

          • And Joe Hockey said to be able to afford a house ‘get a better job that pays more’.
            This is indiciative of how these people see the world through their lens. Easy ….pfffft…..
            They are so far up their own a*ses that they don’t see what conditions are like out there for the 90%
            They probably actually believe that homeless people actually chose to live on the streets too

          • Totes BeWokeMEMBER

            Glenda

            I never over thought that Hockey comment. It’s horrendous. He pretty much said “housing is only for the middle class and above”.

            And I’d add, soon to be just the upper class, not because of price rises, but other cost of living increases, taxes and levies, and falling wages.

            We really have been shafted in the royalist of ways, by the globalists LNP and Labor.

          • It’s the same lot who believe that property is not unaffordable due there always having buyers.

            Extending that to its logical conclusion, there is no figure that housing will never be unfordable as the Rineharts and Gates of this world will able to afford it.

    • GunnamattaMEMBER

      Well said. This is basically the dynamic………

      and that view? From here it looks a lot like Chinese buttock needing to be kissed.

      ‘If you make China the enemy, China will be the enemy’: Beijing’s fresh threat to Australia
      https://www.theage.com.au/world/asia/if-you-make-china-the-enemy-china-will-be-the-enemy-beijing-s-fresh-threat-to-australia-20201118-p56fqs.html

      The RBA line is all about marketing tongue positioning expertise to maximise the margin for the touts. Their next line will be all about the joys of being pantless and crouching with legs stretched apart, and face planted into the terra firma, and how that could boost GDP

        • MountainGuinMEMBER

          They are already making ordinary strayans take one for the team with their emergency emergency emergency low rates and printing
          Deposit holders. Asset poor. Wage earners.

          This follows RBA presiding over the blowing of the property bubble
          Take that mortgage holders and those seeking housing.

          And soon to have unemployed and quality of life added to the list when immigration takes off

      • Funny isn’t it, You read Lowe’s comments as the first stage of China appeasement
        Whereas I read those very same comments as a deliberate warning to our own Politicians
        As I see it Lowe is saying: Any further disengagement with China will mean Economic collapse for Australia
        So you Aussie Politicians need to understand this before you engage in any further “posturing”
        That’s what I read.

          • Nah, I see it as more akin to a good CFO reminding the CEO that all his/her glorious growth plans still need to be funded.
            It’s hard to grow if you don’t have the required positive net cashflow and when sooo much of that comes from just one customer, well it makes sense to carefully consider exactly what that customer is saying especially when the customer feels that the two of you are on a pathway to become real enemies.
            So it’s just that word of caution from someone that is very familiar with the required numbers.

    • ErmingtonPlumbingMEMBER

      I don’t like the terms “Free Trade” and free trade agreements.
      They are dishonest terms designed to confuse the ignorant.
      These “free trade agreements” are in actual fact investor rights agreements designed to circumvent nation state democratic accountability for the benefit of democratically unaccountable, Monopolistic, concentrations of wealth and power
      There is nothing “free” about them at all.

  4. happy valleyMEMBER

    “Butt out of foreign relations, RBA. It’s not in your charter. You’re making a hash of it. And it’s none of your bloody business.”

    Of course, it’s their business – their sh.t doesn’t stink. The RBA happy clappies have been so successful in r.ping savers and depositors in to income poverty and creating the most enormous housing price bubble to serve the clappies’ and mates’ self-interests. Therefore, they can make a meaningful contribution to help their LNP gubmint mates achieve their $2 a day wage slavery objective.

      • happy valleyMEMBER

        Just fine – no longer a saver – tied of the RBA r.pists; they don’t even use KY jelly. Now drinking the IP kool-aid to get an invite to one of reusa’s relo parties – what a fringe benefit to being an IP specufestor. And you? Already, well stocked with IPs and a regular attendee at the relo parties?

  5. Ukraine fnMEMBER

    “Having demanded that the RBA explicitly wade in and help out the big end of town with “stimulus” is it really any surprise that the RBA is now happily sprouting lines about open borders and cheap labour ?”

    Neoliberal ideology has been able to run rampant and affect every level of decision making in all organizations because the great unwashed have been fed identity politics.
    The unwashed need to fight the class war and not be distracted by identity politics.
    That said, I think I only live in hope.

    • pfh007.comMEMBER

      The unwashed have not swallowed identity politics..for the most part it annoys them.

      What the unwashed have swallowed ARE the neoliberal myths over the last 40 years. It is the neoliberal myths that now dominate our society. Look at the reluctance of most people…especially anyone who studied at university over the last 40 years…to even question the neoliberal mantras of

      Free Trade

      Free capital flows

      Open borders.

      Identity politics is a distraction. The danger of identity politics is that it has seduced what would otherwise have been opposition to the neoliberal mainstream.

      The end result is that the neoliberal and identity politics woke elites are working towards largely similar objectives even if they are fighting furiously to get to run the show. It is sad that the identity woke crowd delude themselves that they can promote a global world order AND get to run it. They don’t seem to have noticed that in Star Trek everyone wears uniforms and most of the leaders of the “Federation of Planets” seem to be admirals.

      As annoying as the average “woke” hipster maybe they are not the main game.

      People promoting QE, ZIRP, TFF and NIRP and the banking monopoly of central bank electronic liabilities are the problem.

      • Spot on again 007. This coincides with the crash in educational standards over the same time frame that has come from open borders. Just read some JK Galbraith to see what we have lost.

      • Stewie GriffinMEMBER

        The end result is that the neoliberal and identity politics woke elites are working towards largely similar objectives

        As I’ve long said, each buttresses and supports the other. Identity politics denies a unified national identity and stomps on any proto-nationalist impulses, which are the first step in standing up for your society. While neoliberalism feeds off the excessive capital and people flows that make outsized profits profitable – profits that are directly attributable to cannibalizing the underlying society.

        People promoting QE, ZIRP, TFF and NIRP and the banking monopoly of central bank electronic liabilities are the problem.

        Every attempt at saving the system is only shoring up our imprisonment and dispossession…. still it is a game we are all locked into while the global hegemon is captured by the same cultural values from which neoliberalism and Identity politics have emerged.

  6. The bit I found interesting is the direct quotes of what Lowe supposedly said don’t match up with the strongest section which is not a direct quote of his words:

    …Australia needs an influx of skilled migrant workers to get the economy powering again after the coronavirus pandemic, the Reserve Bank says….Speaking at a forum on Monday night, RBA governor Philip Lowe said Australia would have to look offshore to fill jobs due to the major slump in domestic population growth caused by hard international border closures, which could stay until at least the end of 2021…

    Did Lowe really say, “..Australia would have to look offshore to fill jobs due to the major slump in domestic population growth caused by border closures..” ??? (or words to that effect).

    Or was it the Oz putting words in Lowe’s mouth?

    Those words weren’t there in the Shane Wright version:
    https://www.smh.com.au/politics/federal/rba-governor-says-economic-recovery-needs-risk-takers-20201116-p56f37.html

    Not sure if I saw it in the Murdoch dynasty series but there was something about the journos writing the press release policy details for brexit & the pollie just says the words like a good boy.

    • Arthur Schopenhauer

      Wright’s piece has Phil bemoaning the lack of Australian businesses taking risks. The RBA has set up a system where the most profitable risk is, “build two bedroom townhouses or three?”.
      The RBA, through its promotion of the property Ponzi, has established an environment where investing in a productive enterprise has no possibility of the returns possible via property speculation.
      It is almost impossible to get a bank loan for a business that is not property related without mortgaging a home.
      Phil gets a million dollars a year. Jesus F Christ!

      We can thank Covid for showing us Emperors like Phil have no clothes.

  7. Totes BeWokeMEMBER

    I’m sure others can confirm. Planes landing at Mascot have recently greatly increased.

    Far more than the handful of Australians apparently coming home week by week.

    Immigration has already restarted on the sly.

  8. TailorTrashMEMBER

    Do we need to import some skilled workers
    for the RBA ?
    ….perhaps a few Chinese economists could do the job
    for lower salaries ….and show the required deference and respect to Australia’s rightful masters .

  9. ummm, its the other way around; Australia has benefited from our commodities export and China has benefited from their manufacturing export. To get that fundamental understanding flipped the wrong way from the highest level of our financial institutions is worrying.

    What they have said is a bit of a “heads China wins, tails we lose” comment

  10. From Christine Lagarde with love:
    “And those that have borrowed heavily so far need certainty that refinancing will remain available on attractive terms in order to avoid excessive deleveraging.”

  11. Poochie the Rockin DogMEMBER

    The thing I would like to know is this – does Philip Lowe actually know what he’s doing or is he just a dumb stooge? Some of the comments are so idiotic (like businesses & consumers need to take risks while the RBA supports the massive housing bubble that makes that impossible) that I’m leaning towards dumb.

    • What Jimbo said, it’s We that he treats as dumb & in the literal sense we are – we get No say! While we’re maybe not as stupid as him & his circle jerk tell themselves, he has a huge advantage with the best megaphone we taxpayers can buy for him to bullsh!t us with. And the fact that we’re all soo busy carrying their debt economy that no one can look up long enough to get their heads around all the purposefully convoluted trickle down…… Nice setup eh.

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