Article 4 of the Bank of Japan Act 1997 ensures fiscal and monetary policy must work together (opens in new tab)

Last week, the RBA increased interested rates claiming there was a growing capacity constraint (even though there is 10.2 per cent labour underutilisation) and inflationary expectations were increasing and in danger of propelling inflation even further. The RBA governor once again threatened the Treasurer along the lines of ‘unless you cut net spending we will continue to hike rates’ – which not only demonstrates that the central bank is not politically independent but also reveals how poor m...