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April 22nd, 2012 
FAKE NEWS for the Zionist agenda A former Reserve Bank of Australia (RBA) board member says the federal government must respect the central bank’s independence and not make “dangerous” comments on interest rates.
Warwick McKibbin, who now heads ANU’s Research School of Economics, was commenting on the government’s argument that delivering a budget surplus would make it easier for the RBA to cut the cash rate.
“It’s quite dangerous to be speculating that the bank should move if the government changes policy,” Professor McKibbin told Network Ten on Sunday.
He said the central bank’s independence must be respected.
“I think its independence is the reason that we’ve done so well over the last decade or so.”
Prof McKibbin said it was unfortunate that the central bank had to deal with the politics of the current debate.
“There’s a lot of pressure being placed on the bank externally but also, I imagine, internally as well from other board members.”
He repeated his calls that the RBA take on more economic experts rather than representatives from the business community on its board.
Treasurer Wayne Swan on Sunday said returning the budget to a surplus would ease price pressures in the economy, giving the RBA the “maximum flexibility to cut interest rates if it thinks that’s necessary”.
“This is obviously important for households and businesses under financial pressure,” he said in his weekly economic note.
He reiterated Prime Minister Julia Gillard’s comments of last week that “those calling for further interest rate cuts should also be calling for a surplus, not opposing one”.
Prof McKibbin said it may be too early for Australia to go into surplus.
“My concern is the timing’s not right,” he said.
Either way, he doubts a big cut in government spending would convince the RBA to reduce the cash rate by a significant amount.
“The (RBA) won’t be acting on what is promised,” he said.
“The bank will be looking to see what is done.
“Therefore, interest rates will move gradually, if in fact the government is cutting as severely as they are saying they’re going to cut.”
Prof McKibbin expects the RBA to reduce the cash rate by 25 basis points when it next meets on May 1.
Meanwhile, Mr Swan said Australia’s $US7 billion ($A6.80 billion) contribution to the International Monetary Fund’s (IMF) European bailout package will help stabilise any further deterioration in the region.
The IMF said on Friday it had raised more than $US430 billion ($A417 billion) in an effort to assure finance markets that it has sufficient firepower to handle any new problems from Europe’s prolonged debt crisis.
Mr Swan said Australia’s contribution was “very small” compared with the total amount raised.
“Our commitment is proportionate to our representation on the IMF,” he said.
“Many other developed economies have made far larger commitments than the commitment that Australia made.”
Other countries contributing to the fund include Singapore ($US4 billion), South Korea ($US15 billion) and the United Kingdom ($US15 billion).
Opposition Leader Tony Abbott said the government should explain why it was making such a large contribution to the fund, especially as the United States was not making a contribution.
However, speaking to reporters in Melbourne on Sunday, Mr Abbott said the coalition had always supported Australia’s contribution to international bodies, “particularly the IMF”.
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