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Speaker 1: So we had the resignation of the chair of the

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Speaker 1: Reserve Bank on Friday, which shows you just how badly

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Speaker 1: our economy has been run for the last six years

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Speaker 1: in my opinion. So Neil quickly marched off into the

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Speaker 1: sunset at five forty nine pm on a Friday. That's

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Speaker 1: just late enough for the news to miss the TV

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Speaker 1: six pm bulletin. That's an old PR trick in it,

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Speaker 1: leaving the shock value to dissipate over the weekend before

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Speaker 1: the start of play today. But there we go, and

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Speaker 1: it's evidence to me that successive governments national and Labor

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Speaker 1: and the Reserve Bank have failed to respect each other

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Speaker 1: or realize that even though they are independent, their actions

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Speaker 1: combine and affect all of us. So back in the

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Speaker 1: COVID years, the Reserve Bank reacted and made money essentially free,

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Speaker 1: but the Labor government wanted to be seen to be

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Speaker 1: doing something, so they started overspending. We all know this.

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Speaker 1: They started throwing borrowed money away. And the result of

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Speaker 1: all this free money and all this government spending was

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Speaker 1: a superheated economy that obviously crashed spectacularly and spectacularly quickly.

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Speaker 1: So the Reserve Bank then reacted again and made the

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Speaker 1: money expensive again to attack the overheating put the interest

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Speaker 1: rates up. But the new government, this time National again

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Speaker 1: wanted to be seen to be doing something, so they

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Speaker 1: started canceling government expenditure and that ended out throwing us

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Speaker 1: into an even deeper economic funk than anyone had expected,

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Speaker 1: including the Reserve Bank. Now, in both scenarios, the governments

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Speaker 1: didn't seem to realize what was happening at the reserve

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Speaker 1: bank of our economy, and the Reserve Bank was too

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Speaker 1: proud to take into account the stupidity of governments. They

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Speaker 1: were working against each other. They're supposed to be independent,

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Speaker 1: but that's all supposed to be pulling together to help us.

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Speaker 1: All government, i think, needs to heed the advice that

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Speaker 1: they give to local councils. Just stick to your knitting.

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Speaker 1: Your job is to do the basics. Fund health and

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Speaker 1: education and the police, and build us stuff to help

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Speaker 1: us do business, like roads and rail and ferries. But

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Speaker 1: you don't have to worry about the price of butter

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Speaker 1: or the number of supermarkets. The market will do that,

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Speaker 1: the Reserve Bank will do that. And remember, governments, you

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Speaker 1: need to keep the borrowing as low as reasonable. Let

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Speaker 1: the Reserve Bank worry about inflation and the big financial stuff.

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Speaker 1: But that hasn't happened the last two terms, and that

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Speaker 1: is what should happen. That's how successful governments respect the

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Speaker 1: independence of the Reserve Bank, and that's how the last

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Speaker 1: two amateur governments did not. For more from Early Edition

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Speaker 1: with Ryan Bridge. Listen live to News Talks at b

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Speaker 1: from five am weekdays, or follow the podcast on iHeartRadio.