RBA's Glenn Stevens: Credit:Luis Ascui Like children eyeing off wrapped presents under the tree in the days before Christmas, it's frustrating for the RBA-watching industry to have to wait for Friday's quarterly statement on monetary policy to discover the details of the RBA's thinking. Odds are the SOMP will provide an interesting contrast to the budget speech. The governor's brief post-board statement gave the headline excuse for the cut – "inflationary pressures are lower than expected" – but the sting for Morrison was in one sentence: "Labour market indicators have been more mixed of late." The great achievement of the past year has been employment growth, a reward for our stagnant real wages. The central bank signalling that that is under threat after three years of Coalition government doesn't make for a good three-word slogan. More broadly, the rate cut says the outlook has deteriorated on the Coalition's watch and there's no sign of the government helping with fiscal policy. The RBA has been moved to push once more on its piece of string despite repeated warnings that monetary policy didn't have much more bang to offer for its buck. Indeed, Governor Stevens devoted one of his statement's nine paragraphs to spelling out that the bank had been doing its bit: "Monetary policy has been accommodative for quite some time. Low interest rates have been supporting demand and the lower exchange rate overall has helped the traded sector. Credit growth to households continues at a moderate pace, while that to businesses has picked up over the past year or so. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this."

By implication then, what about Canberra? Hopefully the SOMP will fill in the gaps as yesterday's statement looks a bit like a Holmesian dog that didn't bark. It's what's not in the statement, in light of other RBA declarations, that is most interesting. Much of what Stevens said could be interpreted as a reason to keep rates steady. Aside from the inflation and labour market lines, it's the same old same old: the global economy is growing, but a bit slower; China's growth moderated, but the policymakers are working on it; commodity prices are off the bottom, but still low; sentiment has improved, but is uncertain; Australian growth is continuing, but maybe not as briskly as in the second half of last year. And monetary policy is stimulating away. While abating housing price pressures released the safety catch and low inflation became the nominated trigger, it was only in December that Stevens was saying it wouldn't matter much if the inflation target was 2, 2.5 or 1.5 per cent. And his New York speech last month was just the latest occasion on which an RBA heavy made the case for governments to try serious and sustainable fiscal policy stimulus through borrowing big to invest in infrastructure that would more than pay for itself. Instead, all the government put out ahead of the bank's board meeting was a reworking of existing infrastructure programs to include public transport and $50 million to study it. Big whoop. The NSW government is spending more on infrastructure than the Commonwealth. The big infrastructure game talked by the federal government has added very little on the ground. The RBA is well aware of the medium-term necessity of bringing the federal deficit to heel, but it has no problem with the government incurring "good" debt for investment. Sideshows like immediate tax deductibility of SME capital equipment items worth less than $20,000 won't cut it. (That stunt didn't work for Joe Hockey last year anyway. It encouraged a pull-forward of spending in June that certainly saw retail sales rise – and created a hole in July that saw retail sales fall.)

Loading So without any sign of a concrete game changer from the federal government, our central bank was left to do the only thing it could do: make low interest rates lower. Will another 25 points at these levels make much difference to domestic demand at these levels? Probably not, as the RBA has admitted. The contrast between Scott Morrison's election promises and the RBA's Friday statement should be interesting.