But the Board judged that the bigger risk at the moment was the threat to our economy and to balance sheets from an extended period of high unemployment. Today’s decision will lessen that risk. Is the RBA now financing the government? The answer is a simple no. Today’s decision does not change the long-standing separation of monetary policy and fiscal financing in Australia.
The RBA is not financing government spending. I want to highlight the important distinction between providing finance and affecting the cost of that finance. The RBA is not providing finance to the government, but our actions are lowering the cost of government finance.