[발췌] History of Interest Rates in Australia (Aug. 2019)

지은이: Jason Bryce

날짜: August 28, 2019

출처: https://www.infochoice.com.au/rate-watch/history-of-interest-rate-movements/

>> In August 2008, mortgage interest rates were 9.62 per cent pa and the RBA’s official cash rate was set at 7.25 per cent. But the world financial system was in meltdown, triggered by the failure of a big merchant bank on Wall Street. A global web of complicated debt instruments that had funded a boom in risky home lending in the USA was unravelling.

The Reserve Bank and the government acted quickly and decisively. In a series of big rate cuts, the RBA took its official cash rate from 7.25 per cent to just 3.0 per cent by April 2009.

The Labor government of Prime Minister Kevin Rudd and treasurer Wayne Swan was elected in 2007 and had initially brought in big spending and tax cuts in May 2008. But by October 2008 Wayne Swan was changing tack and announcing a huge stimulus package of $10 billion in spending directed at boosting retail sales. That was followed by $42 billion in infrastructure and building funds.

Australia was alone among major developed economies in not falling into recession during 2008 and 2009. <<

cf. Another description and explanation:

>> Australia countered the GFC with immediate and effective discretionary government policy, following the advice of its then Treasury Secretary Ken Henry to ‘Go hard, go early, and go households’ (Grattan, 2010). Several of this interventionsㅡsuch as boosting government spending so that firms which otherwise go bankrupt would instead have their cash flows underwritten by a government deficit, and  providing a direct cash grant to taxpayers to boost household spending (the very first instance of ‘helicopter money’)ㅡwere ones that Minsky had recommended.

But the key government policy that enabled Australia to postpone its crisis was to entice Australians back into its already inflated housing market, via a dramatic increase in an already generous government grant to first home buyers.  Known as the ‘First Home Owners Grant’ or FHO, this scheme gave first home buyers a grant of AU$ 7,000 towards their purchaseㅡat a time when the average housing price in Australia's capital cities was AU$450,000 (Pink, 2009, p. 11).  In what [is] described as the ‘First Home Owners Boost’ㅡand which I nicknamed the ‘First Home Vendors Boost’ㅡthe Federal Government doubled this grant to AU$14,000 for the purchase of an existing dwelling, and trebled it to AU$21,000 for the purchase of a new dwelling. State Governments added their own bonuses on top, with the outstanding example being the State Government of Victoria, which gave another AU$14,000 for the purchase of a new property outside the State capital.

With banks willing to provide a loan to a buyer with a 5% deposit, this grant mean that the first home buyers did not need have any savings of their own to qualify for a mortgage. First home buyers flocked into the market, thus stopping the decline of mortgage debt ((in its tracks)), and restarting the then faltering Australian housing bubble. House prices fell during 2008 before the scheme was started, but then rose past their pre-crisis peak until the scheme ended in mid-2010.

By then, Australia was benefiting from another bubble: the incredible increase in demand from China, driven partly by its continued industrialisation drive, but significantly also by a credit bubble that was Chinese government's response to the GFC. So just as the Australian household sector started to de-lever, the corporate sector embarked on a borrowing spree to finance the investment in mines, ports and railways needed to satisfy what at the time was thought to be an insatiable Chinese demand for Australian coal and iron ore. These two overlapping trends in private debt meant that though the rate of growth of private debt slowed down in Australia at the time of the GFC, it never turned negative as it did in the USA. Private credit thus continued to stimulate the Australian economy, and the stimulus increased as the housing bubble and the minerals boom accelerated from 2010 on.

As that double-barrelled boom gathered steam, a remarkable thing happened: much to the amazement of Australia's Central Bank, inflation did not rise. The RBA had been the last Central Bank in the world to realise that a crisis was afoot in 2008, and it continued to increase its reserve interest rate until March of 2008, fighting the non-existent menace of inflation. It did not start cutting rates until August 2008ㅡfully a year after the GFC began. Cementing its status as the most out-of-touch Central Bank on the planet, it was then the first to start raising rates after the GfCㅡin the false belief that inflation remained the primary enemy of the economic stability.

The facts begged to differ, and at the end of 2011 the RBA reluctantly reversed direction once more. Its change of direction was partially motivated by the hope that lower rates would cause a resurgence in the housing market, since the Chinese export bounty had proven to be less long-lived than expected. <<

출처: Steve Keen, Can We Avoid Another Financial Crisis? Polity, 2017. pp. 62-65.