"In holding interest rates unchanged today, the Reserve Bank continued to underline the inflation threat to the economy and living standards," Innes Willox, Chief Executive of the national employer association, Ai Group, said today.
"This was reflected in the RBA's broader economic forecasts for the year ahead showing marginally slower growth than previously anticipated. The message from today is that we can expect interest rates to remain elevated for some time to come with higher than optimal inflation to persist.
"While the RBA Board expects wage pressures to ease and to not drive inflation higher, it recognises that this expectation relies on improvements to Australia's rates of productivity growth.
"The clear message to the Federal Government is that it should act more decisively in promoting productivity and be much more mindful of the negative impacts some of its policy directions are having on the productivity outlook. Judging from the RBA's commentary, a clear focus on boosting productivity is our best pathway to getting inflation and interest rates down," Mr Willox said.
Tony Melville – 0419 190 347