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ELEANOR HALL: So just how responsible is the Coalition's $2.5 billion a year promise to cut company taxes at a time when the Reserve Bank of Australia has now cut interest rates to their lowest level in half a century?
While Labor is describing yesterday's RBA board decision as a gift to struggling households - and to the Government in the middle of an election campaign - the Coalition says it's more evidence of Labor's mis-management of the economy.
So is the Australian economy in dire straits, is the budget in crisis and is Australia's triple-A credit rating under threat?
Joining us now to debate the state of the economy are two of Australia's leading economists.
Stephen Koukoulas is the Managing Director of the firm, Market Economics. He has been has been chief economist for two global banks and was the senior economic advisor to former Prime Minister Julia Gillard, for a year after the last election, having moved there from a senior role in the Commonwealth Treasury.
Henry Ergas is a professor of Infrastructure Economics and senior economic adviser at Deloitte Access Economics. He was as an economist at the OECD in Paris and on returning to Australia in the mid-1990s, he chaired several Howard government inquiries on regulatory and competition issues and more recently advised the Coalition on tax reform.
Thanks to you both for joining us this lunchtime.
HENRY ERGAS: Thank you.
ELEANOR HALL: I'll start with big picture question to both of you. The Reserve Bank Board has now cut the cash rate to its lowest level in half a century, below what Kevin Rudd described, when he was last Prime Minister, as an emergency level.
First to you Stephen Koukoulas? Is Australia's economy now in a state of emergency?
STEPHEN KOUKOULAS: It's nowhere near it. It's absurd to think that it is the case. We're growing at about 2.5 per cent. The unemployment rate is 5.7 per cent. Inflation's nice and low. And we're looking at the forward indicators, things like housing, it's clearly on something of an upswing. And of course with the lower dollar we're getting an export boost.
So look, the low interest rates are there because inflation is very low because we're part of a global...