Australia politics live: Nationals will oppose Indigenous voice to parliament, Littleproud says; Respect at Work bill passes

Philip Lowe tells Matt Canavan: ‘renewable energy is the way we need to go’

Estimates have moved on to some theoretical issues, led by one-time Productivity Commission economist Matt Canavan, who’s now an LNP senator.

Canavan tries to pin Lowe down on the Nairu (the non-accelerating rate of unemployment), basically about how low the jobless rate can fall before causing inflation. Is it 3% or 4%?

Lowe generally offers a straight bat, saying it’s basically an academic issue. Nairu numbers offer “useful frames of reference” but the RBA’s decisions will be based “on actual inflation outcomes and forecasts”, he says.

Canavan, who is keen on coal (and nuclear), also tries to pin Lowe down on whether renewables are the cheapest form of power.

Lowe slightly dodges the question: “I think renewable energy is the way we need to go.” Failing to get the transition off fossil fuels right, though, is going to be a problem for everyone, “including me”.

But “for the health of the planet, we got to make the transition”, Lowe says. (No response from Canavan that we heard … perhaps an eye roll?)

Later, Senator Dean Smith queries Lowe on some previous comments about the need to have a flexible workforce, and whether the IR changes that the government looks set to pass this week might reduce that flexibility.

Lowe doesn’t buy into it, though, saying he doesn’t know what the impacts will be on costs, etc.

Another throwback, McKim asks about whether inflation was being pushed up by record profits. Lowe notes profits are indeed at record highs, but says that if the resources sector is excluded, the increases of late have not been “material”.

Some might well dispute that (eg, I can imagine Greg Jericho sharpening his quill for his next column as we type.)