Australia’s government should end its “fetish” for avoiding budget deficits and borrow to pay for flood damage rather than impose a one-time levy on taxpayers, said Warwick McKibbin , a member of the central bank’s board.
The Reserve Bank of Australia will likely “see through” the inflation effects of a carbon tax proposal announced yesterday by Prime Minister Julia Gillard, said economist Warwick McKibbin, an RBA board member.
The Australian government should borrow money to pay for rebuilding from flood damage instead of imposing a one-time levy on taxpayers to fund the effort, said Warwick McKibbin, a member of the Reserve Bank of Australia’s board.
Reserve Bank of Australia Governor Glenn Stevens, with a pay level set more than four times that of Ben S. Bernanke at the Federal Reserve, oversees a bank that’s less transparent than Poland’s in setting policy.
Australia entered its last recession with the benchmark interest rate at 12 percent. Now, as a once- in-a-century mining-investment boom wanes, the central bank finds itself with little conventional ammunition.
Greece is one of several nations that will need to cut spending and boost taxes, slowing global growth even as low interest rates raise the risk of inflation, Australian central bank board member Warwick McKibbin said.