The June quarter real GDP growth was weak (1.4% pa) mainly because of poor business investment. However, real national income grew well (4.4%) thanks to the 8.9% improvement in the terms of trade, in spite of well-understood global risks. Monetary stimulus in Australia will be forthcoming automatically from declining interest rates in the US, Europe and Japan that reduce foreign-sourced funding costs of Australian banks. With the cash rate at an all-time low, there is little gained by cutting further now. The Australian economy can easily absorb the resulting stronger exchange rate. A well-calibrated fiscal stimulus is a more desirable policy response in Australia - it is not a time for fiscal consolidation. Further macro-prudential relaxation now is also a better policy option than a cut in the cash rate. These recommendations imply strengthened and more explicit policy cooperation between the three arms of macroeconomic policy.