Does Australia need a simulus spending spree to get people back to work?

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The RBA says the government has nothing to fear from rising debt and inflation, and hints more help is on its way.

(Image: AAP/Deam Lewins)




In this uncertain time the Reserve Bank of Australia tries to maintain stability. The world is in a deep hole: economic output is down, much more than in the 2008 crisis, and unemployment has risen sharply.  Australia has suffered with the rest of the world.




In a speech to the Economic Society of Australia yesterday, Reserve Bank deputy governor Guy Debelle did not sugarcoat the problems.  Economic recovery will be a long time coming. 

While the RBA tries to keep borrowing costs low and credit available (monetary policy), Australia’s recovery will depend more on fiscal policy: government spending and taxes.



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