Pretty much bang on, the RBA has essentially one tool at their disposal. Even if their decisions are perfect, poor fiscal policy will damage the economy and the RBA can at most put a bandaid on those wounds.

This is the best summary I could come up with:

Last week, in one of his final public appearances as central bank governor, he said monetary policy was a very blunt instrument that spread pain unequally through the community.

Allegra Spender, a teal independent MP from Sydney, asked him if there was anything that could make the RBA a more effective economic institution.

She asked Dr Lowe if he could think of any examples from overseas where fiscal and monetary authorities worked in a more coordinated fashion, in ways that politicians were comfortable with because it didn’t impact their electoral popularity.

Dr Lowe said in some Asian countries where the nature of politics and governance arrangements were different, there was closer cooperation between fiscal authorities and the central bank.

Dr Lowe isn’t the type of economist who spent a few years at Treasury as a junior fetching coffees for senior colleagues, and who then went on to promote himself as an expert on monetary policy.

Only four people have been governor of the Reserve Bank in the inflation-targeting era, and Lowe is the only one who’s had to deal with a significant outbreak of inflation under the current regime, and in an environment where the signs of climate breakdown are all around us, coupled with rising inequality.

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