TWO of Australia’s biggest unions today are demanding the Reserve Bank cut interest rates as part of a rescue package for Australian manufacturing.

The Australian Workers’ Union and the Australian Manufacturing Workers’ Union warned the mining boom was pushing up the value of the dollar and reducing the competitiveness of local suppliers.

‘’The mining boom is not benefiting the wider economy, it is ripping it apart,” they said.

One factor was the high official interest rate which was boosting demand and thus value of the Australian currency, said AWU national secretary Paul Howes, who accused the Treasury of ‘’some pretty dodgy economics” in putting up rates.

”I’m not advocating re-regulating the way interest rates are set,” Mr Howes said on ABC radio today.

”But we have to accept it is not sustainable for our economy to have interest rates that are so much higher than the rest of the world.”
Mr Howes said the Government had to stand up to the Chinese Government and demand it float its currency, the yuan, to its true value, which is higher than at present.

”We shouldn’t be shy of saying to countries like China that if you want to be global player … then you have to do what the rest of us have done, float your dollar and open yourself to the markets,” he said.

”We have a situation where manufacturing, agriculture, tourism are all under huge threat, frankly, because of inaction by the RBA and some pretty dodgy economics from Treasury.”

Mr Howes and AMWU secretary Dave Oliver want local suppliers to be used more by mining companies, who are sourcing substantial proportion of their needs overseas.

”The mining boom is not benefiting the wider economy, it is ripping it apart,” they said.

They today called for a national audit of all major mining projects to determine the real level of local content, which is estimated at less than 10 per cent.

In a joint statement they said: ‘’As the mining boom continues to push up our dollar and the cost of inputs for local manufacturers, it is time to ask whether the jobs of millions of Australians should be sacrificed to economic conditions created by an industry which employs around 200 000 people.’’

”There are 1 million manufacturing workers in Australia and hundreds of thousands more in industries like tourism, agriculture and education which are all suffering because of the high dollar caused by our commodity exports.”

Read more: http://www.news.com.au/business/unions-demand-rba-cuts-interest-rates/story-e6frfm1i-1226121856710#ixzz1W5wfh3iD