Gillard Says Budget Gives RBA Maximum Room on Rates
Australian Prime Minister Julia Gillard said returning the budget to a surplus gives the central bank “maximum room” to adjust interest rates and ease pressure on manufacturers that have been hobbled by currency gains.
“What we can do as a government is to get fiscal policy in the right shape to give the Reserve Bank the maximum room to move should they choose to do so,” Gillard said in an interview in Canberra today. “That’s been one of the drivers as to why we want to bring the budget back to surplus.”
The government yesterday forecast a A$1.54 billion ($1.55 billion) surplus for the year starting July 1, ending four years of deficits. Gillard dumped a corporate tax-cut plan, instead boosting aid for families as her Labor party tries to reverse near record-low poll ratings before an election due in 2013.