Money: RBA's Philip Lowe calls for increase in infrastructure spending - PressFrom - Australia
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MoneyRBA's Philip Lowe calls for increase in infrastructure spending

06:10  08 september  2019
06:10  08 september  2019 Source:   theage.com.au

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Reserve Bank governor Philip Lowe is calling for a major spending program on infrastructure including rail, bridges and roads across Australia in direct opposition to the views of Prime Minister Scott Morrison. Mr Morrison said this week that the federal government was "starting to hit our head on the

Reserve Bank governor Philip Lowe has urged the Morrison government to get infrastructure projects "shovel-ready" in case they are needed for an emergency stimulus to pull Australia out of an economic downturn. Dr Lowe said the Coalition should borrow while interest rates were at record lows to fund

RBA's Philip Lowe calls for increase in infrastructure spending© Alex Ellinghausen RBA governor Philip Lowe says a truce in the US-China trade war could see the global economy rebound quickly.

Reserve Bank governor Philip Lowe is calling for a major spending program on infrastructure including rail, bridges and roads across Australia in direct opposition to the views of Prime Minister Scott Morrison.

Mr Morrison said this week that the federal government was "starting to hit our head on the ceiling in terms of how much infrastructure work you can get under way at any one time".

But Dr Lowe said, "I think we can do more" in an interview with The Sydney Morning Herald and The Age.

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RBA Governor Philip Lowe has urged big spending on transportation. Credit:Dominic Lorrimer. His comments echo those of his predecessor Glenn Stevens, who said public investment in infrastructure could boost the economy, making the Reserve Bank' s job easier while lifting Australia' s productive

RBA governor Philip Lowe has called for reforms to tax and other areas to boost productivity to lift "The increase in infrastructure investment should help raise productivity and support longer-term RBA governor Philip Lowe on Friday called for a "laser-like focus" on lifting productivity, when asked

The economy this week was revealed to be at its weakest in a decade. Amid calls to stimulate growth by stepping up infrastructure investment, Mr Morrison said the government was doing everything it could. That included asking the states to bring projects forward, he said.

Dr Lowe, however, said that there was scope for more new projects as well as more spending on maintaining existing public infrastructure.

"Right at the moment there is limited capacity to do more mega projects in Sydney and Melbourne but there is capacity elsewhere in the country to do significant projects, and also capacity to do a series of smaller projects," he said in the interview conducted for a profile published in Saturday's Good Weekend magazine.

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RBA decides it' s time for some real policies. Skip to sections navigation Skip to content Skip to footer. Markets, following a weak inflation report and the second consecutive monthly increase in The big political surprise was how Dr Lowe made clear that if this nation wants lower unemployment

RBA governor Philip Lowe said without a cut in interest rates, it was unlikely the bank' s forecasts for lower unemployment and a lift in inflation would be Treasurer Josh Frydenberg admitted the economy was facing headwinds but said the Coalition' s plans for 0 billion of infrastructure spending over

"Part of infrastructure investment is actually maintaining road, rail, bridges right across the country. It has the other advantage of making sure infrastructure spending is spread across the country and not just centralised in Sydney and Melbourne. There is capacity in some areas."

The head of Australia's central bank also said that resolving the trade war between the US and China was the "number one priority" for the world economy.

"It's affected the investment climate around the world. Because businesses are very nervous about investing in capital because they don't know what the tariff regime is going to look like, and they also don't know what the tech landscape is going to look like," Dr Lowe said.

"Is it OK to have Chinese components in your factory or not? When businesses are uncertain, they sit on their hands."

The governor said that the dispute could start to harm employment: "It's having a first-order effect right now. If the uncertainty is not resolved, around the world employment growth slows as well as investment."

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RBA Governor Philip Lowe issues warning after rates drop to historic low. On the same day the four big banks announced plans to pass on a central bank interest rate cut, RBA Governor Philip Lowe called for more infrastructure spending and job creation policies.

Philip Lowe is calling on the government to borrow more and spend more on productive infrastructure . But can Sydney and This should leave plenty of scope to address the calls of the RBA and private sector economists for substantial increases in infrastructure spending to provide

On the other hand, an early resolution could lead to a quick turnaround in the world economy: "If uncertainty gets resolved, given that there's been under-investment in capital formation for a while and interest rates are low, the situation could pick up quite quickly. So the resolution of the uncertainty is the number one priority at the macro level."

Independent economist Saul Eslake said that the disagreement between the Reserve Bank and the government was set to continue: "It's barely quarter-time," he said.

He said that "there is already quite a lot of infrastructure going on, but the national accounts this week show that while infrastructure spending is at a high level, the rate of growth in that spending is diminishing".

He said there was a case for bringing forward state and federal projects planned to be built over the next 10 years.

The Master Builders Association agrees with the Reserve Bank. It said last week that "even though we supposed to be on the cusp of an infrastructure boom, engineering construction activity has not been this weak since the GFC.

"It’s a clear sign that governments are not moving fast enough to advance infrastructure commitments to the construction phase,” the association's economist Shane Garrett said.

The clashing opinions are part of a widening divergence between the Morrison government and the central bank over how to generate growth.

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