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RBA - Dissapointing for Australia, 7.2.2012
by Troy Eichelberger/ A1 Debt Assistance Australia

Today the RBA had the best chance to provide a platform to fix some fundamentally negative issues regarding the high value of the Australian dollar.

The decision to leave interest rates unchanged is one that has consequences for business and the general population of this nation.

Major banks warned the government and the RBA they would not feel obliged to decrease their interest rates if the RBA drops the official interest rate. Well, I thought that we have created competition and a ban on mortgage exit fees - so let the people vote and let the banks implode in their own right.

It is not only bad for mortgage holders by way of borrowing cost, but the drop in home values is a real problem for many hard workers. A1 Debt Assistance have facilitated voluntary bankruptcy cases for people on high incomes with steady jobs. Why? Because they can not afford to have a drop in the assett that they are borrowing against when rental returns are nowhere near enough to cover the shortfall of the loan amounts.

Any business in the export sector will tell you how they feel after today. The dollar rose as soon as the RBA made the announcement. Imagine buying a product from Australia, when our dollar makes the exchange rate for the purchaser prohibitive. The same applies of course for all the people who are working in the In-bound Tourism sector. Our dollar makes Australia too expensive to visit. The Euro is dropping - so people can go to Europe for much less.

The consequences of this high dollar - you guessed it, JOB LOSSES and foreclosures. Bankruptcy for people who have not done anything wrong. Insolvency for businesses which are innovative and may have the leading edge in some fields - their product is not priced to compete.

So who benefits from todays decision? For one I would think the Government. The mining tax is lucrative, gambling increases in times of desperation, excise & GST on fuel is healthy. Perhaps I am overlooking something, but is the Budget surplus really worth the livelihood of so many Australians?

If we take Bob Katters idea, drop interest rate to 2% and give the dollar a good kicking down below parity, we may actually have an economy which can create jobs and re-build manufacturing in Australia. We need an incentive to get tourism back - look at how hard Queensland has been hit. Not only are Queensland tourism operators fighting the high dollar, but also floods and cyclones have increased their challenge for survival.

To devalue our dollar allows an increase in wages as business will pick up again - let the inflation run wild for a while. This will help to re-value property prices again, so that the equity against which the mortgage is held is attractive to the banks again - and you can afford the payments so much easier. Let's see the dollar at 60 cents and we can say, "Australia is the lucky country".

Let us hope that next month's RBA meeting can address some of these issues. The financial hardship is covered up in Australia by our Mining Boom, Australian's do not benefit from this boom. A1 Debt Assistance have performed quite a number of voluntary bankruptcies for people working in the mines, they are not spared from our mismanagement. Renting a fibro shack in some of the mining towns is just as expensive as renting a mansion off Sydney Harbour. They make a big income, but many are being ripped off in the process. This is not a strong economy - it is a false economy!

If you know of anyone who is experiencing financial stress - please tell them about A1 Debt Assistance Australia. We provide free phone consultations on 1300 79 74 73 and there is plenty of detailed information about personal and business bankruptcy at www.a1debtassistance.com.au

If you have some feedback or questions, you can contact me on 1300 79 74 73 A1 Debt Assistance.

email - troy@a1debtassistance.com.au

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