Dr. Shane Oliver, chief economist at AMP Capital, said the Reserve Bank of Australia decided to cut official interest rates sharply as it saw the Australian economy was very weak.
This may cause the coalition government to have to consider the second part of the tax reduction plan in advance.
Last week, the two houses of the Federal Parliament successfully passed the three-stage tax reduction bill of the coalition government.
The first phase of the tax reduction law has already begun.
The second phase of tax cuts will increase the 37% tax rate from the current 90,000 to 120,000 Australian dollars.
Although the Australian economy has grown continuously for 28 years, it is the country with the longest growth in the world economy.
However, the Australian economy has been in a downturn for the first time, and GDP growth has slowed to only 0.2% in the past three months.
Dr. Shane Oliver, the central bank’s interest rate cut, will drive economic growth.
But the decision of the central bank is a slap in the face, and the federal government needs to make a big move to get the Australian economy back on track.
He said that the coalition government should consider increasing government spending, such as raising funds for state infrastructure construction to promote economic development.