Labor have so many major events littered throughout their history, that they are able to celebrate. When you build great and structurally sound things, they remain and grow and are worthy of celebration. Congratulations to Paul Keating for deciding to float the Aussie dollar.
Labor is celebrating the 30th anniversary of Paul Keating’s historic decision to float the dollar, one of its MPs is suggesting some sort of interventionist approach to tame the currency.
Mr Keating is today attending a special meeting of the Labor caucus at Parliament House.
Shadow treasurer Chris Bowen believes the floating exchange rate is one of the key factors behind Australia’s ‘unprecedented and unparalleled’ period of continuous economic growth over 22 years.
Floating the dollar was the first of the key economic reforms of the Hawke-Keating era.
‘It meant that further reforms became not optional extras, but absolute essentials,’ Mr Bowen wrote in The Australian on Wednesday.
‘The floating dollar has meant that our economy has a built-in shock absorber.’
That was evidenced during the Asian financial crisis when a lower dollar helped buffer exporters.
But Labor backbencher Nick Champion believes the main problem facing local manufacturing, such as car maker Holden, is the strength of the Australian dollar.
‘This is a dollar problem, not a wage problem,’ he told reporters in Canberra.
‘I think we have to start having a serious conversation about the dollar.’
The high dollar was hurting industries beyond car manufacturing, and at a time when Australia’s competitors in Asia and elsewhere were trying to rein in their currencies, Mr Champion said.
Reserve Bank of Australia governor Glenn Stevens is expected to be grilled about the currency when he makes his twice-yearly appearance before a parliamentary committee next week.
Mr Stevens has repeatedly described the exchange rate as ‘uncomfortably high’ and spoken of the need for it to be lower to achieve more balanced growth in the economy.
He has not ruled out intervention as an option.
The dollar is trading at about 91.5 US cents, down from a high of about 105 US cents earlier in the year – AAP