Saturday, December 18, 2010

Houdini act couldn't save Victorian Labor

LABOR performed a Houdini act in the state election, winning eight of the 10 closest seats to keep the new Baillieu government to a majority of just two.

The final election results show the outcome was closer in seats than in votes. The Coalition harvested more than 1.4 million primary votes, 270,000 more than Labor, but in most of the close seats, Labor got votes where it mattered.

After preferences, 1.633 million Victorians, or 51.6 per cent, voted for a Baillieu government, while 1.533 million, or 48.4 per cent voted to re-elect the Brumby government.

Labor won 14 or a third of its 43 seats with margins of less than 3 per cent, eight by less than 2 per cent, and 19, or almost half its seats, by less than 5 per cent. By contrast, the Coalition won 36 of its 45 seats by more than 5 per cent, and 43 by more than 2 per cent.

Of the 13 seats it gained, only two were really close: Bentleigh, the closest contest, which the Liberals won by 0.75 per cent, and Seymour, won by 1.2 per cent.

But Greens preferences gave Labor seat after seat by narrow margins: Eltham (0.8 per cent), Ballarat West (1.1), Macedon (1.3), Bellarine (1.4), Ballarat East (1.5), Ivanhoe (1.7), Cranbourne (1.9), Monbulk (1.9), Albert Park (2.0) and Geelong (2.1).

All this will change before Victoria goes to the polls again in 2014. A redistribution in 2012 could create two new seats in the outer northern and western suburbs. That means northern Victoria, the eastern suburbs and the south-eastern suburbs are all at risk of losing a seat.

One of the biggest swings was in Essendon, where former planning minister Justin Madden's plan to parachute into the lower house almost failed, with the Liberals gaining a swing of 9.3 per cent and the preferences of one in three Greens voters.

In truth, there were big swings against Labor in most of the western suburbs: 12.4 per cent in Steve Bracks's old seat of Williamstown, 10.9 per cent in Thomastown and John Brumby's seat of Broadmeadows, 10 per cent in Derrimut, and outsize swings in Keilor (9.1 per cent), Footscray (8.4) and Altona (8.3). But only in Essendon was the result close.

Overall, the two-party swing against Labor was 6 per cent. The median swing was higher still, because in most of the Nationals' heartland, there was little or no swing and in two seats, a swing to Labor.

In Mildura, first-term Nationals MP Peter Crisp suffered a massive 7.9 per cent swing to Labor. In Murray Valley, where veteran Nationals MP Ken Jasper retired, Labor's vote rose 2.7 per cent, while in the Wimmera seat of Lowan, there was no swing at all.

By contrast, Gippsland saw the biggest swing to the Coalition. In Gippsland East, the Nationals unseated independent Craig Ingram with a swing of 20.5 per cent against him.

With some exceptions, the swing against Labor was smaller in the country than in Melbourne. But overall the swing in its marginal seats was no more than the swing statewide. The bush held, but the city fell.



Bentleigh* 0.8 Eltham 0.8

Ballarat West 1.1

Seymour* 1.2 Macedon 1.3

Bellarine 1.4

Ballarat East 1.5

Ivanhoe 1.7

Cranbourne 1.9

Monbulk 1.9

Carrum* 2.0 Albert Park 2.0

Mordialloc* 2.1 Geelong 2.1

Frankston* 2.1 Essendon 2.4

Mitcham* 2.8 Ripon 2.7

Bendigo West 2.9

Narre Wn Nth 3.0

Forest Hill* 3.2 Brunswick (#G) 3.3

South Barwon* 3.9 Bendigo East 3.8

Albert Park (#G) 3.9

Prahran* 4.3 Yan Yean 4.1

Oakleigh 4.7

Plus 36 seats with Plus 24 seats with

majorities over 5% majorities over 5%





% % (88) LOSS

Liberals 38.0 3.6 35 12

Nationals 6.8 1.6 10 1

Coalition 44.8 5.2 45 13

Labor 36.3 6.8 43 12

Greens 11.2 1.2 0 -

Others 7.8 0.5 0 1


Coalition 51.6 6.0

Labor 48.4 6.0



Morwell 14.2

Williamstown 12.4

Ferntree Gully 12.0

Gippsland East 11.5*

Broadmeadows 10.9

Thomastown 10.9

Evelyn 10.7

Kilsyth 10.1

Derrimut 10.0


Burwood 9.6*

Carrum 8.7*

Seymour 7.9*

Mount Waverley 7.8*

Prahran 7.8*

Gembrook 7.4*

Bentleigh 7.0*

South Barwon 6.2*

Mordialloc 5.6*

Frankston 4.8*

Mitcham 4.7*

Forest Hill 4.0*


Melton 0.8

Shepparton 1.3

Mill Park 1.3

Tarneit 1.3

Rodney 1.4

Bendigo East 1.5

Ripon 1.6


Mildura 7.9

Murray Valley 2.7

Lowan 0




Tuesday, December 14, 2010

Battling the big banks

THE public response to Treasurer Wayne Swan's banking reforms seems to be a growl of disappointment. Australians are fed up with being ripped off by bank bosses who are paid several hundred times more than them. They are angry that banks are able to charge us what they like, and get away with it. They want tough action to hit banks where it hurts and these reforms don't do it.

They're right. These reforms won't lower your mortgage rate. They won't stop the big banks jacking it up even higher if they can get away with it. And so long as we ask them for three out of every four home loans we borrow, they will get away with it.

But why didn't Swan go further? Were there tougher reforms that he and his colleagues were just chicken to take on? Or was it that there is no simple way to reduce the market power of the banking cartel and that some of the solutions proposed could end up being worse than the problem?

Let's start by looking at where we are, and how we got here. And we'll start with the positives, because they are big positives.

First, unlike most in the West, Australia's banking system did not collapse in the global financial crisis. That's partly because the Australian Prudential Regulation Authority did an outstanding job as our watchdog before the crisis. It's partly because the government moved in the heart of the crisis to guarantee the banks' debts and deposits. But it's also because our banks were prudent and sensible lenders, when their overseas counterparts were not.

That matters for us, because the banks emerged in good shape to finance the recovery. Mortgage lending alone has grown by $162 billion in the past two years. The banks are greedy, yes, but they're good at their job and that's good for us.

Second, interest rates and bank margins have soared over the past year, but with mortgage rates now typically 7.15 per cent after discounts, it's not crippling. If we're in trouble with rates at that level, then we've borrowed too much.

But there is also a big negative. The banks' margins were driven down in the 1990s and early 2000s by competition from new lenders, who derived much of their funding from securitisation: selling bundles of our mortgages to investors, and reinvesting the proceeds in new loans.

The global financial crisis began when this market was poisoned by American banks filling their securitised bundles with bad mortgages. As they went bad, the market for securitisation collapsed even for Australian lenders, whose bundles remain good. And as it collapsed, so did the new lenders.

The big banks swooped, bought up their weakened rivals, and regained their lost market power. The four big banks now hold 80 per cent of all loans. The other banks have 17 per cent, and all credit unions and building societies, just 3 per cent. They're to be our fifth pillar? This will be a long wait.

We got here partly because the GFC wiped out securitisation and the new lenders, but also because in good times and bad, governments and competition regulators have allowed the big banks to gobble up their rivals.

Consider this list: since 1990, the competition watchdogs have allowed the Commonwealth Bank to take over the State Bank of Victoria, the State Bank of NSW, BankWest, Colonial State Bank and Wizard Home Loans. They allowed Westpac to take over Bank of Melbourne, RAMS home loans and St George (in addition to its earlier acquisitions: the Challenge Bank, Advance Bank and Bank SA).

Three times, the regulators allowed one of the big four to swallow up the next biggest bank: first, the State Bank of Victoria, then the Bank of Melbourne, then St George. The result is a cartel that, by and large, does not compete on price.

What could the government do? The most effective way to boost competition would be to set up its own bank, using the post offices as retail outlets. But that would need to be a big venture, with outlays rivalling the national broadband network. It's not surprising Swan turned that down.

It could require the banks to offer loans with margins fixed over the Reserve Bank's cash rate. University of Melbourne finance guru Kevin Davis points out that Australia's variable loans are unusual in requiring borrowers to bear all the risk of rising interest costs. But wouldn't it be better to try to fire up the competitive pressures that will bring those margins down?

That's essentially what Swan's reforms aim to do. One stream of changes would make it easier for us to change lenders by banning exit fees on new loans, and possibly by giving us portable account numbers and thus put pressure on all lenders to compete on price.

A second stream aims to widen the funding sources for potential competitors: by continuing and publicising heavily the government guarantee of their deposits, which was due to expire next October, and by the government buying up another $4 billion of mortgage securities.

The third stream of reforms is aimed at a separate problem: stemming the foreign debt. It will allow banks and credit unions to issue covered bonds a variant of securitisation in which the risks lie with the institution rather than the investor to attract the super funds to invest at home. And the government will try to set up an Australian bond market, to increase options for investors and lenders.

None of this will reduce your mortgage rate next year. But bit by bit, it will build competition, and that will lower rates.

If you're paying too much for your mortgage, you'd better find your own solution: tightening your belt to pay down your debt, refinancing with a credit union, whatever. Best of luck.


Monday, December 13, 2010

Treasurer's sensible attempt to drive change

WAYNE Swan's banking reform package is a persuasive read. But what difference will it really make to borrowers' ability to get a better deal?

We might have to be patient. Most of these reforms are sensible and small-scale: giving consumers more information, giving lenders more funding options. But there are two things on Swan's list that, in time, could make a difference.

The first is his plan to ban exit fees for new mortgage loans from July 1 next year. It will apply only to new loans. It won't cover almost $1 trillion we owe already on existing mortgages. Nor will it apply to small business loans .

Is that a copout? No. Think ahead.

Including refinancing, we take out 600,000 mortgages a year. Two of the four big banks have scrapped exit fees already; the rest will follow.

That might not make us better off. There are real costs to banks when customers break off loans early and banks have ways to get that money from us.

But in future, they won't be able to do it by locking us in to a lousy rate when the credit union over the road offers cheaper deals. We will be free to move.

The second potentially significant reform is the review by Bernie Fraser of the feasibility of giving each of us a personal account number that we take with us if we change our bank.

It's subtle, and it's not certain to happen. But if it does and it probably will that too would slightly shift the balance of power between the bank and you in your favour.

I can't believe the Australian Competition and Consumer Commission will ever succeed in prosecuting a bank for "anti-competitive price signalling", but it won't hurt to give it that power.

And when so many vulnerable people get into serious strife over credit card debt, Swan's changes to tighten the rules are reforms that matter.

But where will the competition come from? New Zealand's Labour government set up Postbank in its post offices. Swan prefers to help credit unions and building societies become a "fifth pillar" to challenge the banking cartel.

It's a big ask. Swan's package would widen their sources of funding. But his biggest step is to pledge that the government's guarantee of deposits will continue in some form after it is due to expire next October.

And as the guarantee will apply equally to credit unions and building societies, they will be free to advertise "government-protected deposits".

These are changes at the margin. They won't put banks at risk. If they work, it will be over time. But they are a serious bid to drive change.


Friday, December 10, 2010

20 Labor seats courtesy of Victorian Greens

LABOR relied on Greens preferences to win 20 of its 43 seats in the new Legislative Assembly raising real doubts about whether it could afford to follow the Coalition in putting the Greens last.

Final election results suggest rather that Labor and the Greens may be doomed to live in a love-hate relationship competing fiercely for a widening circle of inner-suburban seats, yet teaming up against the Coalition elsewhere.

While the Coalition rode the protest vote to power, the battle between Labor and the Greens widened to a second arc of seats from Williamstown to Ivanhoe, and south to Albert Park. Despite that, Greens voters came to Labor's rescue in seat after seat. Across the state, 75 per cent of Greens preferences went to Labor, just 25 per cent to the Coalition. And in 11 of the state's 88 seats, they swung the result Labor's way.

Before Greens preferences, the Coalition was leading in 56 seats, and Labor in just 32. But Greens preferences changed that to a 45-43 result, lifting Labor above the Coalition to snatch narrow victories in seat after seat two seats in Ballarat, two in Geelong, in Macedon, and in six city seats, from Essendon to Monbulk.

Former education minister Bronwyn Pike this week called for Labor to consider putting the Greens last. But while the Greens were her enemy in Melbourne, half her colleagues in the caucus room owe their seats at least partly to Greens voters and might not want a fight.

The final results show that:

While Coalition preferences gave Labor all four seats in the inner north Brunswick, Melbourne, Northcote and Richmond the voters rebelled, delivering a landslide swing against Labor to the Greens and Liberals.

On average, at the three-party stage, the swing against Labor in the four seats was a massive 8.5 per cent, with 5 per cent going to the Greens, and 3.5 per cent to the Liberals. In Brunswick, Greens candidate Cyndi Dawes held an 18-vote lead over Labor until Liberal preferences swung the seat back.

Liberal voters staged a different kind of rebellion. One in three Liberal voters in the four seats defied their party's how-to-vote cards, and directed their preferences to the Greens ahead of Labor.

The Greens also made big gains from Labor in the next ring of seats further out. At the three-party stage, the Greens polled 25 per cent in Albert Park, 21 per cent in Williamstown, 27 per cent in Footscray and 20 per cent in Essendon, Preston and Ivanhoe.

This suggests the next Labor v Greens battle will be over a much wider field.

In the outer suburbs and regional Victoria, by contrast, the Greens went backwards from their high-water mark at the federal election, when they won 12.6 per cent of the vote in Victoria. This time they won just 11.2 per cent of votes, up from 10 per cent in 2006, but well short of their hopes.

Greens how-to-vote cards appeared to have no influence on the way their voters voted. In city seats where they directed preferences to Labor, 75 per cent of Greens voters did so. Yet in three seats where they issued an open ticket, 76 per cent of their voters gave preferences to Labor.

But in two seats, many Greens voters also rebelled against directives to give preferences to the Liberals. In Cranbourne, 41 per cent gave their second vote to former Hawthorn star Geoff Ablett. And in Essendon, 35 per cent preferred the Liberals to former planning minister Justin Madden.


Coalition (45) Labor (43)

Absolute majority 31 13

On preferences

after leading 14 19

after trailing - 11

Greens preferences reversed the outcome in:

Albert Park, Ballarat East, Ballarat West, Bellarine, Eltham, Essendon, Geelong, Ivanhoe, Macedon, Monbulk, Oakleigh.

Greens preferences helped Labor over the line in: Bendigo East, Bendigo West, Bundoora, Cranbourne, Footscray, Narre Warren North, Ripon, Williamstown, Yan Yean.

Victorian Electoral Commission


Thursday, December 9, 2010

All power to Baillieu as upper house win looms

THE Baillieu government appears set to control both houses of Parliament, after a late surge in voting for the Greens knocked maverick independent Stephen Mayne out of the race in the Northern Metro region.

With almost all votes counted, the Liberals appear set to squeeze home in all three of the close races for the new Legislative Council. This would give the Coalition a bare majority of 21 seats in the 40-member chamber a gain of four seats from the 17 it held in the old Council.

Labor looks set to end up with just 16 seats, down from 19 in the old chamber.

The Greens have retained their three seats in the Council but lost the balance of power. And the Democratic Labor Party (DLP) has lost its one seat, that of its leader, Peter Kavanagh.

The final result will be known for certain on Monday, when the Victorian Electoral Commission will feed all 3.2 million votes to its computer to allocate the preferences.

But there is now only an outside chance of an upset.

Ironically, a massive late surge in the Greens' vote has ended their hopes of retaining the balance of power.

Big gains in counting of absentee and postal votes lifted the Greens' vote to 12 per cent statewide, and 19.1 per cent in Northern Metro.

That not only re-elected their de facto leader Greg Barber, but lifted his running mate Alex Bhathal well above Mr Mayne, who polled just 1 per cent, knocking him out of the race.

The Liberals' Craig Ondarchie will end with the final seat, held by retired Labor minister Theo Theophanous.

Sex Party leader Fiona Patten also fell short of sneaking an upset win in the same race.

The late surge to the Greens also saw their Member of the Legislative Council, Colleen Hartland, win her battle with the President of the Council, Labor's Bob Smith, for the final seat in Western Metro.

Mr Smith, most famous for taking 10 overseas trips in his four years as Council President, will be replaced by Andrew Elsbury of the Liberals.

The closest race of all is in the vast electorate of Northern Victoria, where Liberal MLC Donna Petrovich has narrowly rolled back a strong challenge by Steve Threlfall of the Country Alliance.

The Country Alliance polled 20 per cent of the vote in Shepparton, where they beat Labor into third place, but ran out of puff in the Mallee.

David O'Brien of the Nationals took the final seat in Western Victoria from DLP leader Peter Kavanagh, the first seat the Nationals have won in the west for 40 years.

And in Southern Metro, the Liberals' Georgie Crozier unseated Labor MLC Jennifer Huppert.

Mr Mayne's loss maintains his record as Australia's most unsuccessful candidate for Parliament and the boards of top 100 companies a record blemished only by him win-ning election to Manningham Council.




Eastern 3 2 No change

Northern 2 2 1 Libs gain from ALP

South Eastern 2 3 No change

Southern 3 1 1 Libs gain from ALP

Western 2 2 1 Libs gain from ALP


Eastern 3 2 No change

Northern 3 2 No change

Western 3 2 Nat gain from DLP

TOTAL 21 16 3


Wednesday, December 8, 2010

Power bills a shocker. Why?

N THE three years to September, the price of electricity for the typical Melbourne home rose 54 per cent. The price of water rose 62 per cent, the price of gas rose 28 per cent. It was one of the key reasons the Brumby government lost office.

The Bureau of Statistics reports that over the three years, these price rises were the highest of any capital city. In just two years, the St Vincent de Paul Society estimates, "Victorian households' annual energy costs have typically increased by more than $300".

But why? We all know why water prices have risen: the desalination plant, which the Auditor-General says will cost $5.7 billion to build and operate until 2040, plus Melbourne residents paying for a pipeline they will not be allowed to use, except in emergencies. For rising water bills, blame the government.

Electricity is another matter. Victoria's electricity market is the most open and competitive in Australia. Since it was privatised by the Kennett government, the state owns none of it, and now has little control over it. State policies had a part in our rising power bills, but only a part.

Our generators are all privately owned, and free to charge what they like. The transmission network, as in other states, is owned by the government in our case, the government of Singapore. So are three of our five electricity distributors, in whole or part, while the other two are owned by a Hong Kong company.

The state government used to regulate the prices of transmission (the high-voltage lines) and distribution (the poles and wires taking electricity to your home and workplace). But now they are controlled by the Commonwealth, through the Australian Energy Regulator. And the 13 electricity retailers who handle your accounts are no longer regulated by anyone, after the Brumby government decided in 2008 to end price control.

All have played a role in pushing up your power bills as have policies to lift use of renewable energy, especially solar, and the Brumby government's decision to require every home to have a smart meter.

Start with the generators. A decade ago, Australia had a glut of power, so their prices were cheap. Not now. Generation prices have risen a lot: in part, because demand has caught up with supply, and in part because our new plants run on gas or wind, and that costs more than coal.

Transmission prices jumped in 2008 to pay for old high-voltage lines to be replaced by new ones. And distribution prices have risen sharply, and are set to keep rising.

In October, the Australian Energy Regulator gave the five distributors a green light to raise prices on average by 34 per cent over the next five years. While it told us this would raise future retail prices by just 3 per cent a year from 2012 to 2015, that's because distributors' charges make up just 40 per cent of your power bill.

The regulator estimates by 2015, these price rises will increase the typical household's annual bill by $220. If generators and retailers lift their charges at the same rate, the typical household will be paying $550 more by 2015.

Why? Even after the regulator cut $1 billion off the distributors' bids, they will increase investment by 45 per cent over the five years, to cope with rapid population growth, to replace old poles and wires, to meet new post-bushfire standards and to pay for smart meters.

The Department of Primary Industries concedes that the rollout has added $68 to the typical household's power bill this year, but says this will be outweighed over time by the benefits. Maybe, for some, but right now the costs seem more certain than benefits.

Then there's the retailers. Origin has just flagged a 6.8 per cent rise next year for customers on its standard offer that is, those who don't threaten to switch retailers. Most homes by now, however, are on contracts, paying prices called market offers.

The state requires each retailer to publish its market offers on the YourChoice website ( But there's a big catch: there is no law that requires them to offer you the price on that website.

A review for the commission in October 2009, by the Wallis consulting group, found 11 of the (then) 14 retailers quoted households higher peak and off-peak charges than those published on the website. The average peak rate on the website was 16 per kilowatt hour, but most quoted customers at least 17, and some more than 20.

For small business, the gap was even worse. And retailers often refused to provide written confirmation of a quoted price, even if the law requires it.

OK, Ted, we have a problem. What do we do about it?

The Baillieu government has pledged to pay 17.5 per cent of the power bills of pensioners and others on concession cards. It will also consider suspending the rollout of smart meters, pending a new cost-benefit analysis and a separate review by Treasury, aiming to make it better value for money.

St Vincent de Paul policy manager and electricity watchdog Gavin Dufty applauds the Coalition for its "well-targeted" subsidy to concession card holders, and for seeking a pause on smart meters.

But he argues for wider reforms to reduce energy bills by reducing energy use: charging higher tariffs as energy use rises, redesigning renewable energy schemes to minimise costs to the poor, and weatherproofing low-income rental housing.

But retail price monitoring needs to be re-thought, and resourced properly. Retailers should be required to offer customers the prices they advertise. And prices should be monitored more often, more publicly, and in more user-friendly ways. Then the price hikes might slow.


Monday, December 6, 2010

Sex Party close to winning first seat

SEX industry lobbyist Fiona Patten could be catapulted into the Legislative Council to share the balance of power with the Greens, after a surprise twist in the re-check of votes put her within a breath of taking the final Northern Metro region seat.

With a third of votes re-checked, the Greens were polling almost 20 per cent in the seat, well over a quota. If sustained, this would knock out independent Stephen Mayne, but open the door for Ms Patten, leader of the Sex Party.

She now trails Labor by just 0.1 per cent at the point where one or other must be eliminated. If she can overtake Labor, she will defeat the Liberals on Labor preferences.

The re-check has put the Country Alliance back on track to win in Northern Victoria from the Coalition, although it is still too close to call, while Greens MLC Colleen Hartland looks likely to narrowly lose her Western Metro seat in a three-way contest with the Liberals and Labor.

The Coalition is on track to win 20 seats in the 40-member council, Labor 17, the Greens two and the Country Alliance one. If Ms Patten wins, the Coalition will drop to 19.


Thursday, December 2, 2010

Reserve rises may have missed the point

If yesterday’s GDP figures are right, then the Reserve Bank has misread the economy, and given us interest rate rises we don’t read.

If the figures are wrong — and their startling revisions to 2009-10 data don’t inspire confidence — then they are just a bit of static we can disregard. But don’t assume it.

For once, Wayne Swan did not come out yesterday with graphs showing how Australia is leaving the ‘‘major advanced economies’’ for dead. And no wonder. All except France and Italy are now growing faster than we are.

With growth of 2.7 per cent, we are now being left for dead by Germany (3.9 per cent), Japan (4.1) and Korea (4.5).

But The real bottom line is growth in GDP per head. The Bureau of Statistics estimates it rose just 0.8 per cent in the year to September. It is still below 2008 levels.

How can that be when we’ve seen so much growth in jobs, our mineral exports are booming, and even after yesterday’s revisions, the Bureau of Statistics estimates that real national income grew 7.2 per cent in the past year?

Surely that makes us richer? Which means we spend more?

Well, some of us. The key to the puzzle lies near the back of the book, where the Bureau examines the sources of household income.

Over the past two years of crisis and rebound, it estimates, total wage income grew by just 7 per cent - including inflation, including all those 400,000 extra jobs.

Average income per employee grew just 3.6 per cent. Inflation grew 4.1 per cent. That means that on average, households depending on wage income are now marginally worse off.

Household income is growing: but the part of it that is really growing is the income of households who invest. Our income from profits, dividends, rent and interest shot up 16 per cent in the same two years. So households with significant investment income are much better off.

But investor households are more likely to reinvest their windfalls than spend them. That’s reflected in the Bureau’s stunning revision of its story on what happened in the last year. It has cut its estimate of household spending in 2009-10 by a cool $27 billion, and trebled its estimate of household saving from $23 billion to $68 billion.

Its picture of Australia’s growth now is extremely patchy. In the past year, almost half of all non-farm growth was in mining, mineral processing and construction. Most of the rest was in the finance sector and professional services (lawyers, accountants etc). The other two-thirds of the economy is growing little, if at all.

Many economists, inside government and outside, don’t believe this. They point to the stunning jobs growth of the past year, to the Bureau’s record of revising up past data, and dismiss yesterday’s figures as at most a ‘‘speed bump’’ on our road to the boom the Reserve predicts.

They may be right. But in my mind, these figures add to concerns that, as in early 2008, the Reserve may have misread the game. It has focussed on the needs of one industry in one state — mining in WA — when its job is to set interest rates for the entire economy. There is a risk that it has done too much, too soon.