The latest interest rate cut puts Australia on a slippery slope. With rates at historic lows, a cut from 1.5 per cent to 1.25 per cent will do nothing to stimulate the economy.

Controlling the economy by manipulation of interest rates is a tool that is past its use-by date.

Monetary policy is like a strong drug – highly effective in big doses in the early stages, but as the doses become more extreme, the effect wears off.

Rates are now so low that any changes can make little difference to the economy.