Reserve Bank of Australia Governor Philip Lowe said recently that such action would only put more pressure on the central bank and the economy.
“There is an argument that the central bank should print money in the public interest at a time when the government is running a deficit and money is urgently needed to restore the economy,” Dr Lowe said, according to the Financial Review. “However, there is no such thing as a free lunch. Someone has to pay for it and it is eventually deducted from taxes or government revenue.” He added: “If the amount of money a central bank is allowed to create is not influenced by the government, or if government debt is high, it is appropriate to ‘print money’ to stimulate demand. But at the moment the economy is on a sound footing, the public balance sheet is sound and expansionary fiscal policy [the monetary financing of fiscal policy] is not Australia’s first choice.”
The JobKeeper and JobSeeker schemes are crucial to the economic recovery, with professional services firms and builders still facing significant job cuts and workflow “dry up” despite the overall improvement in the job market.
