Australian unions call for interest rate cuts to spur manufacturing

Two of the biggest Australia unions today demanded the Reserve Bank of Australia slash interest rates as part of a rescue package for Australian manufacturing.

According to the Australian Workers' Union and the Australian Manufacturing Workers' Union the mining boom was pushing up the value of the dollar and hurting the competitiveness of local suppliers.

They said the mining boom was not benefiting the wider economy, rather it was ripping it apart.

One of the factors was the high official interest rate which was boosting demand and with it the value of Australian currency, according to AWU national secretary Paul Howes. He accused the Treasury of ''some pretty dodgy economics'' in putting up rates.

Howes said on ABC radio today that he was not advocating re-regulating the way interest rates were set.

"But it had to be accepted that it was not sustainable for the economy to have interest rates that were so much higher than the rest of the world."