Phil Lowe delivers a message for politicians and businesses in Australia, addressing the restrained Reserve Bank Governor (RBG) demeanour. He emphasizes that social and economic problems resulting from the slower Australian economic growth can never really be the job of a central bank but rather the responsibility of business and the political class.
"The issue is not precisely slower growth but more, the distribution of that growth because technology and trade create very strong returns for the part of the population that benefits," Lowe told the Australia Canada Economic Leadership forum, according to AFR. It helps to generate increased returns to the winners, he said.
Lowe, who describes himself as an optimist central banker by nature, said he doesn't accept the proposition that Australia sees lower economic growth, given the rapid advancement in scientific and technological terrains in the recent years. He said that monetary policy alone can only do so much to stimulate growth, which has been the usual political expectation in Australia.
Because the size of welfare spending and the deficit is hardly sustainable or ever, it doesn't solve the longer term dilemma of how to create more domestic winners from the inevitable and massive shifts at work in the global economy, according to The Sydney Morning Herald. Considering the dilemma, Lowe explains that while creating incentive to "increase the size of the pie" is important, it's also necessary to consider how that pie is shared in the Australian economy.
Lowe certainly delivers the optimistic economist view, which may be the best option given the mood of gloom dominating politics and much of the business world. However, everything in economics is connected to everything else - assuming that the Australian economy might actually need proper planning and governance in other invisible areas, not only limited to an accelerated growth distribution.
