We also recognise that low interest rates hurt the finances of many people, particularly those relying on interest income. So there is a balancing act here. The Board is prepared to ease monetary policy further if needed. Having said that, it is extraordinarily unlikely that we will see negative interest rates in Australia.
It is likely though that we will require an extended period of low interest rates to reach full employment and for inflation to be consistent with the target. As is the case internationally, the focus needs to be on an improvement in the investment environment, so that investors are prepared to take Melville's cue and use low funding costs to build new productive assets.