Fiscal stimulus 'holds up consumer spending'

Moves by the government and Reserve Bank of Australia (RBA) are helping to guide the country though the economic downturn, it has been suggested.

Writing in a blog entry, Michael Stutchbury, economics editor for the Australian, points out that a string of RBA base rate cuts and the government's fiscal stimulus packages "have held up consumer spending", which could include that expenditure made using credit cards.

"That's helped produce a rise in overall employment since the crisis hit in September last year, thanks to a more flexible job market," he adds.

Continuing, he states that the country's banking system is generally in a strong position despite the economic problems being experienced on a global scale, those on the search for a competitive bank account may be interested to hear.

However, an alternative take on the nation's economic position was recently put forward by South Australia senator Nick Xenophon, who claimed that the government should introduce a cap on credit card interest rates, where no more than five percentage points above the standard variable interest rate should be charged.

Written by Emma North