Wednesday, 15 October 2008
Questions without Notice
As I was saying, the impact of the decision of those opposite to vote against the budget measures puts upward pressure on inflation. This buffer was needed. This is the buffer that allowed us to produce yesterday’s package—the $10 billion package that will protect and guide us through these troubled times, these challenging times. This is a fiscal stimulus package and it is supportive of monetary policy. We are not in a situation like those opposite were in where they were running a fiscal policy in one direction and the Reserve Bank was running monetary policy in the other direction. This is supportive. The risk to inflation is now abated. There has been a substantial easing of monetary policy around the world. The government’s revised forecasts, as I have said, will be contained in MYEFO for all to see.
Let me just quote one or two individuals on this, starting with the Reserve Bank Governor on 7 October 2008 where he says:
... the bank remains of the view that inflation will start to decline in 2009.
… … …
... Board judged that a material change to the balance of risks surrounding the outlook had occurred—(Time expired)