Dire economy is time to push for much-needed infrastructure
INTEREST rates being slashed to a record low is the perfect chance for Ipswich representatives to lobby the Government for much-needed infrastructure to accommodate its rapidly growing population, according to one economic expert.
The Reserve Bank cut Australia's cash rate for the third time this year to 0.75 per cent in an effort to drive economic growth and support employment.
University of Southern Queensland Associate Professor Peter Phillips believed the RBA was "running very light" on options as to where to go next to kickstart the struggling economy.
"By having to cut the rates by so much, they don't really much room to work with," he said.
"I'm thinking the problem here is we've got a situation where the Reserve Bank is almost, so to speak, out of ammunition with regards to helping the economy."
Professor Phillips said the onus lies with the Federal Government to inject life into the economy through increased infrastructure spending.
"There's probably two ways you can try and get the economy going," he said.
"One is to cut interest rates. When they're almost zero and there's not much scope for further cuts, your options there are limited.
"The Government has been focused on running budget surpluses, or getting back into surplus and balancing the budget.
"Politically, that's been their message for a number of years. It's quite obvious an individual, or a business, doesn't necessarily have to run a balanced budget all the time. You can borrow money to invest as long as it's for productive purposes that benefit you later on."
Professor Phillips said as the Government was in a good position financially, now is the perfect time to borrow money and put that towards major projects.
"People who live in the major metropolitan areas and also in regional cities can see things like public transport or mass transit could do with some work," he said.
"Things like that the government could explore and then you have immediate building and people on the ground working and getting paid and an immediate boost.
"It's an opportunity for places like Ipswich and Toowoomba and even the capital cities to actually use a very sound, logical argument that at these sorts of times with a sluggish economy and a government budget position that's okay, there's nothing wrong with actually lobbying for a decent project and getting access to that money that will benefit everybody for decades."
In a recent meeting with for Minister for Population, Cities and Urban Infrastructure Alan Tudge, Ipswich City Council interim administrator Greg Chemello stressed the importance of solving three major infrastructure issues, which included revising and improving bus routes, building the Ipswich Central-Ripley-Springfield rail line and delivering faster rail on current routes.