Anthony Wolfenden

3 weeks ago

Sent to the Treasurer today, let's see what I get back:

Mr Treasurer,

Prior to 1960 Monetary and Fiscal policies were the responsibility of the government. More recently the RBA manages the economy (money supply?) according to the press and economist and this is in conformance with most of our western trading partners.

This split has created at least two core issues that no-one seems to address or even question. If the RBA reduces money supply or the threat of inflation by raising rates and the banks proceed to raise the cost of borrowing….

1. The fight and thus stress of fighting inflation falls squarely on borrowers and not other players in the economy. Even when the borrowers are not the drivers of sticky inflation. This is an HUGE inequity surely as well as making the lever less effective and requiring the stress on borrowers to be prolonged. There are other ways of battling inflation but we never hear anything about them.

2. The money withdrawn from the economy by the banks is basically kept by the banks. It’s not collected by the government and saved, or used to reduce government debts or used for government spending and cost of living adjustments. While we are looking at perhaps a hard fought $8B surplus, the banks are withdrawing 5-10x that in lending funds above the cash rate. These are economy changing amounts of money that are not being used for that purpose.

I would be interested in hearing more about your personal or departments views on either of these topics. They weigh on my mind and those of my clients.

Kind Regards,
Anthony Wolfenden
Authorised Financial Planner 1242381
Intertek Pty Ltd ABN 95 001 076 697 ... See MoreSee Less

Anthony Wolfenden

3 weeks ago

Fiscal and Monetary Policy are the key mechanisms for managing the Australian Economy. These were the provinces of elected parliament until the RBA was established 60 years ago.

Since then the government has managed taxation and expenditure while the RBA through the banks has managed the money supply.

The RBA reduces the supply of money by increasing the cost (interest rate) of borrowing. It increases the supply by reducing the rate and thus the cost of borrowed money.

Be clear... Banks make money coming or going and when times are tough they make MORE because they charge more. The cash rate is 3.45% but most peoples mortgages are above 6.5%

The absolute crushing repayments of Australian borrowers are not being saved by the government, or being used to reduce our national debt or being spent on government infrastructure as they would have been 60 years ago. They are going to bank balance sheets and making these private institutions even richer than they were in good times....

WHY are we letting Banks steal over $50B of our wealth annually when the federal government is hard pressed making a surplus of $8B over the same time??

We have been sold a bill of goods and it's time to ask for a refund. ... See MoreSee Less