By opting not to relieve pressure on Australian industry and jobs, the RBA is failing its duty under the Reserve Bank Act, CFMEU National Secretary Michael O'Connor said this afternoon.

Mr O’Connor said that the RBA’s decision to leave rates on hold at levels many times higher than most of the developed world was unjustifiable.

“We have a situation in this country today where the high Australian dollar is hammering manufacturing and other trade exposed industries and putting thousands of jobs at risk,” he said.

“The Reserve Bank can put downward pressure on the dollar by lowering rates, yet for some reason it has failed to do that today. Frankly, that flies in the face of what the RBA is there to do.”

Mr O’Connor pointed to section 10 of the Reserve Bank Act, which stipulates that the RBA
must:

best contribute to… the maintenance of full employment in Australia; and the economic prosperity and welfare of the people of the Australia.

In addition, section 10B(a) states that:

the Bank’s payments systems policy is directed to the greatest advantage of the people of Australia.

“When the RBA makes these decisions on interest rates at the front of mind should be employment growth and job security,” Mr O’Connor said.

“That is clearly not what has happened today.

“High interest rates in Australia compared to the US and Europe attracts cash and currency investors and this, in turn, drives up the dollar. And an Australian dollar that stays as high as it is now will end up having a devastating effect on jobs and the structure of the economy, especially in non-resource states.

“The RBA has today failed Australian jobs and the Australian economy and should now consider how it will move to rectify this in coming months.”

Michael O'Connor is National Secretary of the CFMEU