Joe Hockey insists that Labor’s Resource Super Profits Tax has caused the AU$ to collapse despite Kevin Rudd instead blaming the Liberal Party’s negative talk for the fall.
The Australian dollar was down 10 percent in the last week to a 9 month low of 81.86 US cents over the weekend, but has opened higher this morning, trading as high as 83.15 US cents.
Joe Hockey in speaking to Sky News has said there is a link between the fall in the Australian dollar and Kevin Rudd’s “massive new tax on mining.”
“I mean it’s quite obvious because mining relies heavily on international investment,” Mr Hockey said.
“A lot of those mines rely heavily on international capital and therefore all of that international capital has a currency risk.”
Kevin Rudd over the weekend pointed the finger at the Liberal Party for the fall in the Australian dollar.
“I’ve seen a few reckless remarks by the Liberal Party on this question,” Mr Rudd said.
“Everybody around the world knows that there is a genuine crisis of confidence in Europe, in particular in Greece, and concerning sovereign debt, and as a consequence there are significant changes in currency markets and equities markets right across the world.”
Mr Hockey deflected Mr Rudd’s comments on Sky News.
“Well, basically markets don’t listen too much to an opposition and they sometimes don’t listen to a government unless it is policy.” he said.
The exodus from the Australian dollar may well be influenced by the RSPT, however this is a minor concern for the markets which are retreating to the US dollar in times of international uncertainty around the Euro and the Greek sovereign debt crisis. Australia is seen as a risky currency to hold and demand is highly influenced by international growth, more likely than the potential impact of an RSPT.
