Reserve Bank of Australia governor Philip Lowe outlined on Tuesday his vision for the activist use of the central bank balance sheet to facilitate economic smoothing in a zero interest rate world:

“Using the public balance sheet in this way inevitably requires government borrowing against future income. It is through this borrowing that we can smooth out the hit to our current income. For a country that has got used to low budget deficits and low levels of public debt, this is quite a change. But it is a change that is entirely manageable and affordable and it’s the right thing to do in the national interest.”