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RBA must cut rates to promote jobs-CFMEU

Sky News    October 24, 2012

The federal government's mid-year budget review means the Reserve Bank of Australia (RBA) needs to slash interest rates to stimulate job growth, a union says.

CFMEU national secretary Michael O'Connor said the RBA had a responsibility under its Act to promote full employment when it meets again in November.

'We are on target for a budget surplus and inflation remains low,' he said in a statement.

'The RBA has a clear obligation to cut rates and relieve pressure on sectors of the economy that are doing it tough, like manufacturing and housing.'

The mid-year budget review predicts a $1.1 billion surplus in 2012/13, down from the $1.5 billion surplus forecast in the May budget.

The government has flagged $16.4 billion of new savings to fill a revenue hole created by a $22 billion slump in tax receipts.

The fiscal pullback gives the RBA room to cut interest rates in the future, which will benefit households, Mr O'Connor said.

He said there was overwhelming evidence that manufacturing and construction were struggling with the high Australian dollar and cheap products from overseas.

'The RBA can relieve pressure on these struggling sectors by cutting rates, stimulating economic activity and putting downward pressure on the dollar,' he said on Tuesday.

'The onus is now on the Reserve Bank board to take one of its core obligations - to promote jobs - seriously.

'That is the community expectation and it is the expectation of our members.'

Last modified onTuesday, 28 May 2013 09:23

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