We’re heading for an economic disaster because of the poor planning of current and previous governments. According to ANZ Banking, the AUD could go to US 50 cents. With official interest rates at 1.75%, there is little value in holding Australian currency. If we maintain interest rates at this level or cut them further, the dollar will go down further.
The RBA cuts interest rates when the economy isn’t growing fast enough. The aim is to increase borrowing and hence stimulate economic growth. Unfortunately, this is not solving the fundamental problem facing Australia: how can we be competitive on a world stage?
Current mode: race to the bottom
Lowering our dollar makes us competitive on the world stage and as a result increases the employment rate. The way it does it, however, is a race to the bottom. Lowering the dollar simply makes our labour cheaper on the world stage, but also reduces our ability to purchase goods, especially from overseas. That means you have to work harder and longer to buy the things that you need and want.
A different kind of competitiveness
True leadership wouldn’t simply stand on the sidelines pumping more money into private loans to increase our competitiveness. The Science Party has a plan to grow our economy by making us competitive on the world stage for being the best, not the cheapest, source of labour in the world. More money for education, more money for scientific research and more support for early stage businesses.
Dr James Jansson is the leader of the Science Party and a cofounder of a startup called Tapview. See James Jansson's election profile.