The Reserve Bank of Australia cut its benchmark interest rate to a record low this month to boost businesses weakened by the currency’s sustained strength, even as households reacted to earlier reductions.
Shadow Treasurer Joe Hockey overtook incumbent Wayne Swan in a poll on who is more capable of managing Australia’s economy, as the government failed to gain a boost from its last budget before a Sept. 14 election.
Australian Treasurer Wayne Swan will eschew European-style austerity as a stronger currency slows growth, wagering the government can win a Sept. 14 election fought on jobs and absorb the pain of a broken surplus promise.
Australia’s government is wooing voters with increased infrastructure, health and education spending while charting a path to a budget surplus as it seeks to restore economic credibility four months before an election.
The euro-area economy shrank more than economists forecast in the three months through March, extending a recession to a record sixth quarter and increasing pressure on the currency bloc’s leaders to spur growth.
Asian shares rose as the Nikkei 225 Stock Average closed above 15,000 for the first time since 2007 after the yen touched a 4 1/2-year low against the dollar, boosting the earnings outlook for Japanese exporters.
Australian Prime Minister Julia Gillard’s government announced plans to upgrade infrastructure as it boosts health and education spending, in a budget seeking to woo back voters while restoring economic credibility four months before an election.