Rates not a cure-all, says outgoing RBA governor

Sydney

GLENN Stevens used his final speech as central bank governor to try to shake Australia out of its torpor.

The longer-term outlook he painted was fairly bleak: an extended period of low growth, debt-laden households with restricted borrowing capacity, monetary policy approaching its limit, a gaping budget deficit that must be filled, productivity-enhancing reform that needs to be implemented and a lack of government-financed infrastructure.

"We are living in a world in which the ability of monetary policy alone to boost growth sustainably is very likely to be a good deal more limited than we might wish," he said in a speech to market economists in Sydney on Wednesday. "So we need realism about how much we can expect monetary po…