In case you missed it the contrarian view was that despite appearances, the economy is weak, the banking system is undercapitalised and the mining boom evaporating more quickly than most realised.
After previous speeches essentailly committing Australia to an ostrich policy of head in the sand isolationism, RBA Governor Glen Stevens, as this macrobusiness.com.au article explains performed an about turn and signalled accomodative monetary and fiscal policy. Or to put it another way after denying the currency war and gathering global slump would affect Australia, Stevens now took aim:
This is a remarkable statement. Although its content is ambiguous about how effective the RBA sees its power to lower the exchange rate, the import of the analysis is that only a lower currency can deliver a ‘sustainable rebalancing’. Truly this is an epic volte-face by the central bank which was, until recently, still encouraging Australians to think of a high exchange rate as a historic boon that was here to stay. It’s not done for the central bank to say it was wrong but it sure is implicit.And across town the banks are being squeezed hard. Not only with a deposit levy (a form of negative interest rates to an extent, to encourage spending?) which will likely impact on capital, but also in a seeming prodding of banks to come good on interest rate cuts. Unusually (and perhaps for the first time ever seen by this reviewer) one of the major banks has passed on and then exceeded a rate cut - could this even be too risky by the banks? Who knows? Certainly the dressing of the step us as "showing confidence" is absolute baloney! (here)
...The point is it’s an economy operating at stall speed, with rising unemployment and falling business investment. Into this mix we must throw one more probable outcome....
There is a significant risk that the terms of trade will fall further and faster than Treasury forecasts (here)