Finance Finance News ‘Another rate cut won’t work’: Scott Morrison
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‘Another rate cut won’t work’: Scott Morrison

Scott Morrison
Mr Morrison wants Australia to look to government policy. Photo: Getty
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In a rare move, Treasurer Scott Morrison has said he would not support further interest rate cuts, arguing their effectiveness is “diminishing”.

Mr Morrison was in Washington DC over the weekend, where he spoke to key finance ministers and investors.

The treasurer told the Australian Financial Review the Reserve Bank of Australia – designed to be independent from government – could only do so much for the Australian economy.

“What’s more important for our economy is getting on with our fiscal consolidation and bringing forward productivity-enhancing reforms,” Mr Morrison said.

The RBA held interest rates at 1.5 per cent this month. Photo: Getty
The RBA held interest rates at 1.5 per cent this month. Photo: Getty

He said it was up to the Turnbull government to “boost incomes and lift living standards”.

After cutting interest rates in May and August this year, the RBA held them at a record low of 1.5 per cent in October.

The bank has attempted to help Australia manage its transition out of the mining boom that injected growth into the economy for over a decade.

But Mr Morrison said cutting interest rates was more of a stopper than a fixer, saying “at best” it helped “alleviate” problems for a certain amount of time.

“What’s more important for our economy is getting on with our fiscal consolidation and bringing forward productivity-enhancing reforms,” Mr Morrison said.

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