The RBA governor’s statement after Tuesday’s board meeting would have been remarkable before late 2019 for its reference to full employment. It would have been remarkable before the first half of 2020 for its commitment to interest rates near zero for cash and out along the yield curve. It would have been remarkable until recently for its acceptance of RBA purchases of large quantities of government bonds.
There has been a historic change in the basic stance of monetary policy since the beginning of the pandemic and especially since early February. The change gives Australia a chance of achieving full employment for the general run of citizens for the first time in the working lives of most Australians.
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Ross Garnaut is emeritus professor of economics at University of Melbourne. His new book Let’s Tax Carbon and Other Ideas for a Better Australia is published by Black Inc with La Trobe University Press.
