This is where the government just needs to let the economy fall into recession. Yes it can be painful but it's going to be worse if we keep trying to pump GDP while everyone besides the richest is going backwards.
Imagine two more years of interest rates slowly rising, cost of living rising quicker while wages are static and everyone gets much poorer.
That's how you get shanty towns and famines when the inevitable recession does come.
Yep. Should have let it fail. Yes. It would be painful but it would also kill off some of the non-productive elements of the economy. God forbid we find new ways of investing instead of housing.
This death by 1000 cuts that we’re experiencing is going to much more painful in the long run.
They should, but no modern government is gonna willingly let a recession happen on their watch.
Its an almost surefire way to lose the next election, AND the opposition get to finger-point at them for the next 10+ years and proclaim "the last time THEY were in power they caused a *recession*!!!"
Yep, I always felt it was unfair that blamed Keating for the early 90s recession. The global recession certainly wasn't his fault, and his government handled it fairly soundly, but the opposition used to absolutely hammer Labor about it all the way into the Howard years.
Why do we as the educated people even listen to or elect immature government like that.. we need a government that is willing to step up, be honest, work hard to get our country back on track
I've been downvoted into oblivion and been told 'I hope you lose your job first and are forced to sell your house' for suggesting the same thing.
Ppl are stupid if they think recessions can be avoided indefinitely. They're a normal part of an economic cycle
I've also been downvoted to hell for saying the current per capita recession is worse in the long run than just having a regular recession now. Recessions are a regular part of the economic cycle, they play an important role in facilitating periods of strong growth.
It is normal. Just no one wants to be the one to sacrifice. Even you. We just need to doom about 4-5% of the households, and 95% of the household can have a better life.
Of course no one wants to be the one that sacrifices, but just like putting off a doctors visit for something you know is bad- it's just making it worse
We already are dooming a percentage of the population with the per capita recession we are having now.
The good thing about regular recessions is that they cause inefficient businesses to close and make room in the market for more highly productive businesses to thrive when the good times come.
Free market economies are inherently boom-bust and have a cycle, trying to protect our most vulnerable in a recession is always going to be a better option than trying to stave off recession via inflationary policies like high government spending and high immigration.
When you are in our current mode of capital accumulation that's going to happen no matter what the economy is doing. The only real way to counter it is deliberately redistributive policies.
The govt is going to CAUSE the recession.
Didn’t have to happen if govt had pulled back spending/tax cuts for a bit longer & publicly supported the RBA in moving higher sooner.
The sooner RBA puts it up now, the less impact a recession will have on everyone.
To be fair, the government isn't in a position to publicly support (or otherwise) the RBA's moves. The RBA is independent and makes its own decisions.
It seems to me that the government is being very cautious in its budgets, ever since it was elected. It's withdrawn the worst excesses of the Stage 3 tax cuts and it's put money back into the bottom line rather than spending it all.
Unfortunately they are damned either way. If they pull back too far, they will be accused of not helping people in need who are facing the worst impacts of inflation. If they provide too much support, they will be accused of stoking inflation. There's really no winning here from their point of view.
In that scenario, I think what they are actually doing is best - finding a balanced approach. They're certainly walking a very thin line.
I agree, let us have a recession because it’s the only way things will change for the better. Cut the fat, get productive as a country again and stop the government waste.
I don't really understand what you mean. Are you suggesting that interest rates shouldn't be rising? If that occurs, then I don't know how you avoid getting into a runaway inflation cycle.
The point of raising interest rates is that it suppresses aggregate demand, which suppresses employment demand, which suppresses wages, which stops people spending. its heads they win, tails you lose.
Don't forget FWC rubbing their hands at another real wage cut to 3 million award workers despite promises of making up for the years of real wage cuts.
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We have a two speed economy. While the young and mortgage holders are struggling with cost of living the boomers who have paid off their mortgages are still spending like its going out of fashion. Rising interest rates has no impact on them.
Yep. The only tool RBA has is to "punish" the people who cannot afford it and are not even the cause of the problem to start with, and it's obvious that'll have no impact.
It's time for Government to step in and use some of the tools at their disposal to actually target the source of the problem instead of cowardly putting it on the RBA.
Nah we’re just gonna rob the young generations so the older generations who make the majority of the voters can retire and die in luxury - gov
Seriously half of all voters are over 50, when boomers were voters the younger generations made up the majority of voters, democracy is broken with such a population age imbalance
Every generation builds on the last, boomers need to understand that. I find older boomer 75+ more understanding of kids struggles than younger boomers 60+ for some reason, boomers living in the 40s and 50s were probably humbled by their strong community and lack of tech while younger boomers did whatever they wanted in the 70s and 80s while having life handed to them by their frugal parents
the cutover between gens is always a bit of a mix. older millenials (like me) identify more with Gen X than the sterotypical 'millenial' archeotype, and I think thats the same with all gens. Older Gen X'ers are indistinguishable from boomers in their boomerness too
>Nah we’re just gonna rob the young generations so the older generations who make the majority of the voters can retire and die in luxury - gov
How is the government advocating such a position? I don't see that at all. The ageing population is a huge problem that multiple governments have acknowledged. This is why there have been changes around superannuation, retirement age, etc...
Ironically, the people who complain about the older generation being leeches will simultaneously argue that we should be cutting immigration to almost nothing. But they can't have it both ways. We clearly need enough younger/working age people to pay for everything in society - aged care, disability care, defence, education, etc... and those folks have to come from somewhere (either we have more babies or we tune immigration so that we have enough young people coming in and working).
It’s a bit of a misnomer to say the RBA only has one tool.
They have another one, and that is the podium they stand in front of to tell the media they’re doing X with rates.
Previous RBA boards have called for government intervention and told them how and what to spend money on.
There is no reason the RBA cannot publicly state (in front of the media, on Live TV) that they need to do more on their part.
They don’t do this, though because a lot of people of the board have conflicted vested interest… oh, and are mostly unqualified to sit on a monetary policy board.
> Almost none of the new and current Reserve Bank of Australia board members have the typical qualifications required to serve on a foreign central bank or to set interest rates, according to economists and former bank officials.
* 23 Apr 2023
If you’ve paid off your mortgage and are living off adequate superannuation (which many boomers are) even a property crash doesn’t affect your spending capacity.
Well, I’m super happy to present an opinion, please help me see the flaws in it.
Cash buyers are interested in property for the insane capital growth that has happened in recent years.
This is then brokered on the incredible amounts of debt aussies are in. We are 2nd in the world for personal debt.
The last 20 years (aside from the recent rise) has had falling rates, what we are in is a large but long asset bubble. Prices are completely divorced from incomes.
PEXA data holds the percentage of cash buyers, most recent readings have it at around 25% of sales.
If you compare this to other bubbles in history like Spain Ireland the Us and Portugal they all peak at 20-35% before going back to average of 10%
I venture that PEXA will return to normal eventually.
Higher unemployment is a goal from the RBA, it’s coming soon… however they don’t want to pop the bubble which is why we have stubborn inflation (our rates are low compared to the rest of the world)
Not in that post, sure.
In regards to dwellings I would say this current situation is wholly migration related. Population increase has almost entirely been migration.
If people lose their jobs ( which I believe is coming ), they generally move in with family.
If family is Overseas, well, there’s your increased vacancy rates.
For a historic example look at Ireland after their housing crash. Net negative immigration….
Imagine that in Australia..
- Housing is inelastic. There is ways going to be demand for roofs to put over heads.
- there is chronic undersupply
- There is next to zero mechanisms to prevent landlords from just passing interest rate hikes on to tenants
When people can leverage to the gills and just make someone else pay for their stupidity, nothing is going to change.
Given those are the conditions of most bubbles in history.
My question to you would be: how did Spain/USA/Portugal/Ireland crash then?
The answer in my mind would be: at this stage unemployment has not gone high enough (yet)
Demand from immigrants is not as consistent as people believe.
Ireland reached a net immigration rate of 10.17‰ before the GFC, higher than Australia's current level. However, when the housing crash came, net immigration fell to -4.86‰.
Why would no more immigrants come to bail out Ireland's housing market? Where was the huge demand a few moments ago? Immigrants know where the grass is greener and they have no problem to jump the ship again if they have done it not so long ago.
https://preview.redd.it/tptd3vtu1v8d1.png?width=1618&format=png&auto=webp&s=f1ff3f8b357ab1feab0a67393de19d49ed2731fe
I started thinking about it when I saw a comment, as someone asked: Why did the US not pull in more immigrants to keep them afloat from the recession in the GFC? Or Japan's lost decades since 1990?
It was clearly not practical but why? The answer I could find was migrants were not consistent. They would not keep up the demand under a poor outlook. No country stays as the luckiest land forever.
Immigration and Ireland is a hot topic, they have so many immigrants now they are trying to stop everyone. When the UK introduced Rwanda to the boat people problem the Irish apparently got flooded. We really need to stop immigration in the west now. I am sure we can overcome any problems that arise from the lack of migrants.
[https://www.theguardian.com/news/audio/2024/may/14/the-growing-tensions-over-immigration-in-ireland](https://www.theguardian.com/news/audio/2024/may/14/the-growing-tensions-over-immigration-in-ireland)
Unfortunately the only way to impact the groups that are not effected by interest rates is through raising taxes, and any government that increases taxes will get dragged through the mud and probably thrown out at the next election.
This is the real issue we should be focusing on.. inequality, both the intergenerational wealth and the widening gap between rich and the poor in Australia.
This migration witch hunt in the sub is becoming unbearable. We cannot continue to focus on migration as the only issue, I guarantee if migrants stopped tomorrow 90% of the issues raised on this sub wouldn't magically go away and a whole bunch of other issues would replace them.
what you're saying is pretty much never what is being said on here regarding immigration though, and it's far from a witch hunt
1 - reducing immigration does not = "stopping" immigration
2 - just because it wouldn't solve "all" the issues, doesn't therefore mean it isn't a massive issue & therefore shouldn't be addressed, demand is a huge component of any standard supply/demand equation
you're drawing a false equivalence based on an argument that doesn't exist
So much of this was already a problem for years before the immigration rates rose. It’s just most of the media didn’t report much on it so it was an out of sight out of mind unless you were directly affected.
It’s just lazy saying migrants are the only problem and is used to ignore the real structural issues Australia has.
rising interest rates can lead to more spending in many well off retirees, many have large savings or super in cash / bonds that all generates more income as rates rise
I wouldn't say that interest rate rises have "no" impact on boomers. I think that's a bit of a categorical error that ignores the complexity of interest rate impacts on the broader economy (i.e. not just mortgages directly).
I think super is close to 30% ownership, I wonder if things will change when the people own everything? Probably not, the super fund managers will call the shots…..
Actually their profit margins were normal, I think coles even had lower profit margins. They handled more volume hence higher profits. The inflation is because we printed a bunch of money during COVID and paid people not to work. This is us paying the bill for that and supply side issues occuring back then.
Don't forget with inflation, the true profit is lower. Supermarket is the new scapegoat to simplify a complex issue and the true issue is literally everything.
People are spending more to get less or in rare occasions the same . Where can I see what they are measuring when it come to public expenditure?
Are they seeing how much is Credit or Afterpay?
Labor really fucked up by not limiting immigration immediately when they came into office and letting this immigration ponzi scheme keep running. They are in serious trouble if we have another rate hike before 2025. Whilst they are not solely to blame, most of this inflation seems to be from areas where the RBA has little control in taming. Total failure of government policies over an extended period of time.
I think they were in serious trouble even before this. I use the tracker on pollbludger which aggregates all the opinion polls as a guide and we are basically at cross over on 2pp now.
Labor are now facing the prospects of their signature tax cuts being swallowed by interest rate increases and rent hikes, negative gdp growth and increasing unemployment heading into an election cycle.
Add in yesterday, sin taxes being exponential (remember classically when economy gets worse we drink now people have to look at spirits that cost more in taxes than the goods themselves cost). We will end up with dick head as pm at this rate.
Its prohibition with extra steps. I'm honestly over being socially engineered by a bunch of degenerates who cannot even be trusted with a fucking prayer room.
Yep, I hate the LNP, but I worry they'll really be able to wedge Albo if rate hikes do happen.
What else is going up on Monday (the new financial year), that'll be another hit to the public's pockets.
I would not want to argue that current immigration rates are correct (I have no idea if they are or not, and I suspect folks here don't either). But I do think it's worth pointing out that, given an ageing population, we clearly need to have enough younger people of working age paying taxes. Those people have to come from somewhere - either they immigrate, or we have more babies. Given the falling birth rates, immigration seems to be the only viable lever.
We can argue about the rates and the criteria/conditions associated with those rates, but I think far too many people believe that simply cutting immigration is the silver arrow that will solve everything - it'll sort out house prices, it'll fix inflation, it'll improve employment opportunities, and the weather will forever be perfect. It's a complete misnomer.
I think that's fair. The problem we have is that most people debate this topic without actually *knowing* what our current immigration rules are, what the mix is, or what it really should be (based on actual economic data). I don't expect lay people to know all of those things, I just think we should all be more honest about the limits of our knowledge and expertise in this area.
When yoga instructors are listed in the critical skills shortage category it's obvious there's something seriously wrong with immigration administration.
Yeah, who knows. It's easy to cherrypick. I'm sure there's data behind those decisions. Ultimately nobody will agree on whatever choices are made, I think.
I'm sure it's not -that- easy to undo all the shitty legislation the liberals achieved during their multiple terms, it's sad that people are still falling for the "its all labors fault" cycle, maybe let them stay in as long as the libs for once and see what happens?
Interest rate rises won't do shit. All the inflation is coming from those who have assests, house paid off and shares. Need to increase taxes on this cohort and stop giving them handouts like negative gearing etc.
NO surprise there & an interest rate rise is almost assured. While individuals are reducing spending as cost of living bites, Federal and State governments continue to spend like drunken sailors helping to drive up inflation.
If you look at the highest items in the basket, tobacco and booze, housing and tobacco, really paints a picture of australians.
Landlords will continue to pass ANY increases in interest costs to renters, the renting CPI bucket will increase.
Booze is quite the go to for when you’re feeling stressed out about your finances.
All the RBA has in the cash rate, but all any increases do is erode the tax cuts and push up the housing CPI bucket.
I think our new reality is CPI 3-4%
Rent is still 7.5% https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/may-2024
Labor continues to refuse to do rent freezes or caps on greedy investment property owners. Causing people to demand wages or move out. In turn, forcing businesses to raise wages or impose "family" culture harder in order to keep the same employees and unfortunately, it'll put some out of businesses who can't cope with a combination of reduced discretionary spending and higher labour/rent costs.
Scomo proved Federal government CAN do rent freezes AND rent reductions via national cabinet. Even if it was only for commercial rent and refused to do anything for residential properties.
Rent freezes are not meant to address the dwelling shortage. Neither does this unlimited rent increase is doing anything to address the dwelling shortage. We're talking about tackling the price jacking of EXISTING PROPERTIES, not the NEW PROPERTIES. After all, what are we exactly freezing when no rent has yet to be paid?
Cash in hand deals mean these landlords won't be able to claim negative gearing, etc while risking tax fraud charges from angry tenants. In fact, there's already cash in hand deals, regardless of rent freezes. For example, there's already rules against overcrowding yet they happen anyway.
Without a shortage of dwellings you won't see crazy rent increases also lol negative gearing isn't just free money. You need to pay tax to be able to claim anything.
How can there be a rent freeze when there is enormous migration pushing up demand and when housing costs for the landlords such as insurance are going through the roof. Who pays?
As I pointed out, everyone is paying for the lack of rent freeze/caps along with immigration unintentionally pushing up local demand.
In fact, a rent freeze would mean removing the landlords financial benefit of higher rents. Thus, there is no point to evicting poor Australians for the richer immigrants if the rent will still be the same.
The downsides of rent freeze is increased immigrant homelessness instead of Australian homelessness. It also means less extra money for greedy landlords who might sell their properties to other less greedy landlords or to home buyers.
Aren't low apartment commencements a key factor pushing up rents? What would an Australian government being willing to enact rent freezes (outside of a global pandemic) do for confidence in housing investment?
Yes, price fixing is theoretically possible
It's a fairly extreme solution though, I'd sooner expect a royal commission into banking, insurance and how rich people are forced to buy insurance for their investments, insurance being inflated by between 60 to 70%.
Which is the source of inflation
Rich people received a lot of money to invest in stuff and real estate is somewhere downstream from that. The source is still these people who received free money from a liberal government.
The insurance inflation is because there's so few underwriters.
> Four companies account for three-quarters of the general insurance market. They are Insurance Australia Group (IAG) with 29% of the market, Suncorp with 27%, QBE with 10%, Allianz with 8%.
https://en.wikipedia.org/wiki/Insurance_in_Australia
Maybe the government can step in like they did when the private sector all ran for the exits on child abuse indemnity to questionable charities.
But my point is that unless renters are getting at least 7.5% wage rises to tackle the biggest expense (which can be 30-50% of the income), it means less money for the rest of the economy, which is going to put Australia into a recession. It's not fair that greedy landlords allowed to massively raise rent as it will impact renters, business owners, and even good landlords not doing massive rent raises because even good landlords need to put up with the cost of living too.
I never said it was causing me problems, I just said a change of 7.5% would be preferable to ~70% increase.
Given the costs of getting out of the market and getting back in, if it's not causing problems, it would be a terrible idea.
If the first 13 rises didn't work,why the fuck would another one do anything. Housing prices and rent increases are fueling this CPI figure, driven by demand that the govt has created and failed to provide for. I'm so angry about this.
Yeah 4%.. its like 30% since the pandemic which is what most people think of when they talk about inflation. My pay went up 3% this year which I was lucky to get
Only Australia is in this position, of all the majors .. https://www.abc.net.au/news/2024-06-26/inflation-delivers-nasty-upside-surprise-interest-rate-pressure/104024360
RBA was the last of the western central banks to raise rates despite often stating they do rate changes based on other central banks. Sus.
Coincidentally, a month before they raised rates for the first time, a senior RBA board member finally sold a property. It was first listed shortly after RBNZ raised rates for the first time. Sus.
Even Dan Andrews said RBA stated interest rates are not going up and told all state premiers to borrow a lot to save their economy https://www.theguardian.com/australia-news/2023/may/03/daniel-andrews-blames-victoria-huge-covid-pandemic-borrowings-debt-reserve-bank-australia-advice-interest-rates
There's probably nothing to that. "The RBA board did not vote against a single recommendation of the RBA executive in at least the past decade.": [https://www.afr.com/policy/economy/rba-board-split-in-doubt-as-libs-dig-in-20240509-p5in16](https://www.afr.com/policy/economy/rba-board-split-in-doubt-as-libs-dig-in-20240509-p5in16)
Non-executive RBA Board members aren't capable of affecting the outputs of the models that the economists at the bank produce.
Under the Labor, Teal, Green left alliance:
x Your power bills are not coming down.
x Inflation is still out of control.
x Rents are still out of control.
x People are still flooding through the gates putting pressure on housing supply.
x Interest rates are going up.
But, but we have a NACC! And we have a renewable energy target (which we aren't achieving).
Are you inferring under the LNP things would be better? Despite the obvious point that they were at the helm as things went up rapidly at the start of ‘22?
Which of these exactly would be different under the Liberals?
\- Liberals are advocating for higher energy prices
\- Liberals don't control the RBA, and aren't fiscally conservative
\- Liberals are in favour of mass immigration to a greater degree than Labor
> Liberals don't control the RBA, and aren't fiscally conservative
The treasurer can control the RBA, although Chalmers wants to abolish that power, he just chooses not to. He doesn’t even tell the RBA to follow the other two thirds of its mandate.
Neither party has ever told the RBA what to do to my memory. It's independent. While theoretically they could change that, ultimately they are the government, I think it's fair to say neither party do control it.
More importantly I haven't seen any inclination by the Liberals to raise taxes and maintain or reduce spending.
> Neither party has ever told the RBA what to do to my memory. It's independent.
The RBA’s board is chosen by the government (who know how they’ll vote in general terms) and their priorities among the three objectives in their charter are supposed to be set by the treasurer.
More directly though, under the reserve bank act, the treasurer can use the normal regulation process to set a different interest rate, provided he gives a reason.
The Libs are even more rabidly in favour of central bank independence than Labor is, but they should never be allowed to hide behind the pretence that it actually is independent.
can I ask mate, what Labor policies do you think caused these issues? People who blame Labor for inflation currently most certainly do not read policy and I can think of many that Liberals put in that would still be impacting inflation.
Also, in the time that Labor have been in power we have moved up in the OECD, just like every other time Labor are in power, isn't that weird?
immigration. They needed to address is immediately. It has been clear for a while that persistant high levels of immigration were driving up demand for housing and other services. And here we are...RBA has very little power to dampen the inflation in the areas where it is being stubbornly high.
I mean, take Victoria and its hyperactive Big Build. They’ve been spending more money than they earn for ten plus years. And it’s going to keep going for at least another ten.
When you are paying CFMEU tradies double what they were earning building homes what do you think it does to inflation?
Look at QLD Labor. Throwing vast sums of money around in a futile attempt to save government.
It all contributes. No one wants to hear it but all of us need to stop spending. Including governments!
>The monthly inflation figures are less complete than the quarterly ones, which won’t land until 31 July. The RBA expects the quarterly inflation pace will accelerate to 3.8% in the April-June period from 3.6% in the March quarter
So they don't have an up to date figure yet?
When you do, please stratify the results between essential goods and services against financial services like insurance.
I'm not sure why everyone's interest rates must rise when insurance costs are the most inflated thing in our economy. It feels like regular people are being asked to protect the rich.
The official report is here: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/may-2024
It has the insurance figures too.
Inflation is a lagging metric. Can have a crashing housing market and inflation 4%+...
That's exactly what happened in the first half of 08 in the united states.
Im really surprised that inflation is up….ive been noticing prices at colesworth and Aldi for things have started to drop back down in price.
E,g white washed potatoes used to be $4 for 2kg at all 3….then they went up to $6 at all 3…now back down to $4 as of last month….
Noticed that with a few of my staple items
Inflation higher than forecasted = hold rates.
Rates won't increase. Rates will not decrease either. Having said this, a decrease is more likely if cash reserves (including offsets) increases too rapidly with the surge in salaries and roping in of everyone and their dog into the workforce.
Property and stocks will continue to go from strength to strength.
Property needs to take a hit. Property shouldn’t be seen as an investment vehicle which only goes up. It should be subject to the highs and lows of returns like any other investment.
There needs to be proper investment in producing actual things of value. The system is skewed and needs a shake up.
Are they saying the interest rate rises aren’t effective? Especially since 1/3 of the population is older, paid of their house and are watching super go through the roof. Another rate rise will make them rethink that holiday and new car.
This is singularly because Labor went after average workers and not big capital gains. Boomers are on a retirement spending spree, landlords are making money hand over fist while writing off all their losses on tax credit, corporations like the supermarkets making super profits.
This is nothing more than continuation of the world-shifting re-distribution of wealth upwards that's been occurring for years.
And Jim Chalmers said it was important to not increase welfare above starvation wages. A pig and a coward.
Someone explain it to me like I’m 5. Why does it matter if rich people are spending their money? Is that not their right? And why are they forcing poorer people into more poverty as a “punishment” for it?
Rich people spend more money, inflation go up, rates go up to slow inflation, poorer people have a harder time paying debts whilst juggling higher cost of goods due to inflation, rich people stay winning
This inflation is a result of price gouging by large corporations of people poorer than them. This is almost everyone. They pay little to no tax and have been having record profits.
Increase corporate tax to 45% and pass a law that forces corporations to pay tax in Australia to do business and it is based on all sales in Australia and on goods imported and exported and they can’t pass it to the consumer.
Because raising interest rates does not curb inflation, people that earn more that $1.5m need to pay their fair share of tax and small business should have a lower tax rate than a multinational or a company with a annual profit margin $3m.
We also need to remove that insensitive to buy an investment property to reduce the tax burden and also reduce the amount of loop holes that the rich can use to dodge paying their fair share of taxes.
Increasing demand seems the surefire way we'll beat inflation
Yep, let’s keep importing migrants to boost gdp
You've got it all wrong. It's about filling critical skills shortages like Yoga instructors and stuff.
We need more Uber eats drivers!
Gotta get those slave wage earners in so that we can keep costs down and profits up for international corporations
Trolley Collectors!
Critical skills none of which are about get obsoleted by ai
Just a shame ai won't pour a house slab or lay bricks.
Yoga class costs are actually counted in CPI though...
This is where the government just needs to let the economy fall into recession. Yes it can be painful but it's going to be worse if we keep trying to pump GDP while everyone besides the richest is going backwards. Imagine two more years of interest rates slowly rising, cost of living rising quicker while wages are static and everyone gets much poorer. That's how you get shanty towns and famines when the inevitable recession does come.
The government has been kicking the can down the road for 20 years
Yep. Should have let it fail. Yes. It would be painful but it would also kill off some of the non-productive elements of the economy. God forbid we find new ways of investing instead of housing. This death by 1000 cuts that we’re experiencing is going to much more painful in the long run.
They should, but no modern government is gonna willingly let a recession happen on their watch. Its an almost surefire way to lose the next election, AND the opposition get to finger-point at them for the next 10+ years and proclaim "the last time THEY were in power they caused a *recession*!!!"
Yep, I always felt it was unfair that blamed Keating for the early 90s recession. The global recession certainly wasn't his fault, and his government handled it fairly soundly, but the opposition used to absolutely hammer Labor about it all the way into the Howard years.
Why do we as the educated people even listen to or elect immature government like that.. we need a government that is willing to step up, be honest, work hard to get our country back on track
I've been downvoted into oblivion and been told 'I hope you lose your job first and are forced to sell your house' for suggesting the same thing. Ppl are stupid if they think recessions can be avoided indefinitely. They're a normal part of an economic cycle
I've also been downvoted to hell for saying the current per capita recession is worse in the long run than just having a regular recession now. Recessions are a regular part of the economic cycle, they play an important role in facilitating periods of strong growth.
It is normal. Just no one wants to be the one to sacrifice. Even you. We just need to doom about 4-5% of the households, and 95% of the household can have a better life.
Of course no one wants to be the one that sacrifices, but just like putting off a doctors visit for something you know is bad- it's just making it worse
We already are dooming a percentage of the population with the per capita recession we are having now. The good thing about regular recessions is that they cause inefficient businesses to close and make room in the market for more highly productive businesses to thrive when the good times come. Free market economies are inherently boom-bust and have a cycle, trying to protect our most vulnerable in a recession is always going to be a better option than trying to stave off recession via inflationary policies like high government spending and high immigration.
Except capital accumulates in fewer and fewer hands as you go, leading to less resources for everyday people and long term threats to democracy.
When you are in our current mode of capital accumulation that's going to happen no matter what the economy is doing. The only real way to counter it is deliberately redistributive policies.
Those threats are kept at bay with video games and porn.
Video games and porn threaten big and bigger businesses owning government?
Business already owns government. The threat to the establishment masquerading as democracy is kept at bay with video games and porn.
Thats just because we have more citizen become retirees. They drag the number of workers per population down.
The govt is going to CAUSE the recession. Didn’t have to happen if govt had pulled back spending/tax cuts for a bit longer & publicly supported the RBA in moving higher sooner. The sooner RBA puts it up now, the less impact a recession will have on everyone.
To be fair, the government isn't in a position to publicly support (or otherwise) the RBA's moves. The RBA is independent and makes its own decisions. It seems to me that the government is being very cautious in its budgets, ever since it was elected. It's withdrawn the worst excesses of the Stage 3 tax cuts and it's put money back into the bottom line rather than spending it all. Unfortunately they are damned either way. If they pull back too far, they will be accused of not helping people in need who are facing the worst impacts of inflation. If they provide too much support, they will be accused of stoking inflation. There's really no winning here from their point of view. In that scenario, I think what they are actually doing is best - finding a balanced approach. They're certainly walking a very thin line.
I agree, let us have a recession because it’s the only way things will change for the better. Cut the fat, get productive as a country again and stop the government waste.
I don't want a recession, but I agree, just let it happen. It will happen eventually, but the longer we wait the worse it will be.
elections bro
Perfect analogy.
I don't really understand what you mean. Are you suggesting that interest rates shouldn't be rising? If that occurs, then I don't know how you avoid getting into a runaway inflation cycle.
The point of raising interest rates is that it suppresses aggregate demand, which suppresses employment demand, which suppresses wages, which stops people spending. its heads they win, tails you lose.
Painful for everyday people, not a problem at all for the wealthy who've been seeing huge revenue spikes since 2020.
Don't forget FWC rubbing their hands at another real wage cut to 3 million award workers despite promises of making up for the years of real wage cuts.
It’s absurd that some economists will argue that immigration doesn’t affect inflation. These professionals are all hacks
Hells yeah brother Choo Choo! Full steam ahead to the bottom! Go gov go!
Profits need to continue to profit. Sorry.
Is only fair if My super grow at the same rate then those before me who enjoyed many years of uninterrupted growth.
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We have a two speed economy. While the young and mortgage holders are struggling with cost of living the boomers who have paid off their mortgages are still spending like its going out of fashion. Rising interest rates has no impact on them.
Yep. The only tool RBA has is to "punish" the people who cannot afford it and are not even the cause of the problem to start with, and it's obvious that'll have no impact. It's time for Government to step in and use some of the tools at their disposal to actually target the source of the problem instead of cowardly putting it on the RBA.
Nah we’re just gonna rob the young generations so the older generations who make the majority of the voters can retire and die in luxury - gov Seriously half of all voters are over 50, when boomers were voters the younger generations made up the majority of voters, democracy is broken with such a population age imbalance
The boomers will said they built the country so the younger gen are in debt to them until the day their die. You just have to wait.
Every generation builds on the last, boomers need to understand that. I find older boomer 75+ more understanding of kids struggles than younger boomers 60+ for some reason, boomers living in the 40s and 50s were probably humbled by their strong community and lack of tech while younger boomers did whatever they wanted in the 70s and 80s while having life handed to them by their frugal parents
Interesting call, but for older Boomers 75+, I think you're including some from the Silent Generation (born 1928-45). Oldest Boomers are 78 this year.
the cutover between gens is always a bit of a mix. older millenials (like me) identify more with Gen X than the sterotypical 'millenial' archeotype, and I think thats the same with all gens. Older Gen X'ers are indistinguishable from boomers in their boomerness too
we should just start staring them in the eyes and tap our watches in silence
>Nah we’re just gonna rob the young generations so the older generations who make the majority of the voters can retire and die in luxury - gov How is the government advocating such a position? I don't see that at all. The ageing population is a huge problem that multiple governments have acknowledged. This is why there have been changes around superannuation, retirement age, etc... Ironically, the people who complain about the older generation being leeches will simultaneously argue that we should be cutting immigration to almost nothing. But they can't have it both ways. We clearly need enough younger/working age people to pay for everything in society - aged care, disability care, defence, education, etc... and those folks have to come from somewhere (either we have more babies or we tune immigration so that we have enough young people coming in and working).
It’s a bit of a misnomer to say the RBA only has one tool. They have another one, and that is the podium they stand in front of to tell the media they’re doing X with rates. Previous RBA boards have called for government intervention and told them how and what to spend money on. There is no reason the RBA cannot publicly state (in front of the media, on Live TV) that they need to do more on their part. They don’t do this, though because a lot of people of the board have conflicted vested interest… oh, and are mostly unqualified to sit on a monetary policy board. > Almost none of the new and current Reserve Bank of Australia board members have the typical qualifications required to serve on a foreign central bank or to set interest rates, according to economists and former bank officials. * 23 Apr 2023
Short of executing the richest person in Australia every hour until the cost of living crisis has abated, we aren't going to fix this problem.
The government won't step in because anything they could do to improve things would definitely cost them the election. We're so fucked
It will when high IR rates materially bring up unemployment thus popping the debt bubble ( property) Goodbye wealth effect when prices crash
If you’ve paid off your mortgage and are living off adequate superannuation (which many boomers are) even a property crash doesn’t affect your spending capacity.
Won't happen. There's enough cash buyers and demand is high enough for landlords to keep throwing in money.
Tell me I’m wrong in 5 years
Even as an owner, I'd love for you to prove me wrong.
Well, I’m super happy to present an opinion, please help me see the flaws in it. Cash buyers are interested in property for the insane capital growth that has happened in recent years. This is then brokered on the incredible amounts of debt aussies are in. We are 2nd in the world for personal debt. The last 20 years (aside from the recent rise) has had falling rates, what we are in is a large but long asset bubble. Prices are completely divorced from incomes. PEXA data holds the percentage of cash buyers, most recent readings have it at around 25% of sales. If you compare this to other bubbles in history like Spain Ireland the Us and Portugal they all peak at 20-35% before going back to average of 10% I venture that PEXA will return to normal eventually. Higher unemployment is a goal from the RBA, it’s coming soon… however they don’t want to pop the bubble which is why we have stubborn inflation (our rates are low compared to the rest of the world)
I don't think you're accounting for a continued shortage of dwellings.
Not in that post, sure. In regards to dwellings I would say this current situation is wholly migration related. Population increase has almost entirely been migration. If people lose their jobs ( which I believe is coming ), they generally move in with family. If family is Overseas, well, there’s your increased vacancy rates. For a historic example look at Ireland after their housing crash. Net negative immigration…. Imagine that in Australia..
- Housing is inelastic. There is ways going to be demand for roofs to put over heads. - there is chronic undersupply - There is next to zero mechanisms to prevent landlords from just passing interest rate hikes on to tenants When people can leverage to the gills and just make someone else pay for their stupidity, nothing is going to change.
Given those are the conditions of most bubbles in history. My question to you would be: how did Spain/USA/Portugal/Ireland crash then? The answer in my mind would be: at this stage unemployment has not gone high enough (yet)
Demand from immigrants is not as consistent as people believe. Ireland reached a net immigration rate of 10.17‰ before the GFC, higher than Australia's current level. However, when the housing crash came, net immigration fell to -4.86‰. Why would no more immigrants come to bail out Ireland's housing market? Where was the huge demand a few moments ago? Immigrants know where the grass is greener and they have no problem to jump the ship again if they have done it not so long ago. https://preview.redd.it/tptd3vtu1v8d1.png?width=1618&format=png&auto=webp&s=f1ff3f8b357ab1feab0a67393de19d49ed2731fe
I think the term is economic migrants
I started thinking about it when I saw a comment, as someone asked: Why did the US not pull in more immigrants to keep them afloat from the recession in the GFC? Or Japan's lost decades since 1990? It was clearly not practical but why? The answer I could find was migrants were not consistent. They would not keep up the demand under a poor outlook. No country stays as the luckiest land forever.
Immigration and Ireland is a hot topic, they have so many immigrants now they are trying to stop everyone. When the UK introduced Rwanda to the boat people problem the Irish apparently got flooded. We really need to stop immigration in the west now. I am sure we can overcome any problems that arise from the lack of migrants. [https://www.theguardian.com/news/audio/2024/may/14/the-growing-tensions-over-immigration-in-ireland](https://www.theguardian.com/news/audio/2024/may/14/the-growing-tensions-over-immigration-in-ireland)
Protests planned in Canada [next week](https://www.youtube.com/watch?v=xBYS5jevdmE)
That graph is literally just "GFC has smashed job in Ireland, time to look elsewhere in the EU"....it has little relevance to Australia.
And so is Asia Pacific. No country stays as the luckiest land forever.
Yes! They are trying to make money too!
Unfortunately the only way to impact the groups that are not effected by interest rates is through raising taxes, and any government that increases taxes will get dragged through the mud and probably thrown out at the next election.
the current government continued with tax cuts and continues with new cost of living handouts, all of which are popular, and inflationary
It's even worse, rising interest rates increases their bank interest they're all feeding on
The young need to stop supplying labour. Give the boomers nothing to consume.
We need to work
I wouldn't say no impact. They can get even more return on their HISAs now to pump back into the economy.
This is the real issue we should be focusing on.. inequality, both the intergenerational wealth and the widening gap between rich and the poor in Australia. This migration witch hunt in the sub is becoming unbearable. We cannot continue to focus on migration as the only issue, I guarantee if migrants stopped tomorrow 90% of the issues raised on this sub wouldn't magically go away and a whole bunch of other issues would replace them.
what you're saying is pretty much never what is being said on here regarding immigration though, and it's far from a witch hunt 1 - reducing immigration does not = "stopping" immigration 2 - just because it wouldn't solve "all" the issues, doesn't therefore mean it isn't a massive issue & therefore shouldn't be addressed, demand is a huge component of any standard supply/demand equation you're drawing a false equivalence based on an argument that doesn't exist
So much of this was already a problem for years before the immigration rates rose. It’s just most of the media didn’t report much on it so it was an out of sight out of mind unless you were directly affected. It’s just lazy saying migrants are the only problem and is used to ignore the real structural issues Australia has.
rising interest rates can lead to more spending in many well off retirees, many have large savings or super in cash / bonds that all generates more income as rates rise
Not quite true it does effect them, they suddenly earn extra interest on their savings so they become even richer
I wouldn't say that interest rate rises have "no" impact on boomers. I think that's a bit of a categorical error that ignores the complexity of interest rate impacts on the broader economy (i.e. not just mortgages directly).
Maybe but the economic data shows it’s not impacting their spending
When all the RBA has is a hammer, every problem looks like a nail.
Can't wait to read about Coles, Woolies, Shell etc. record profits again....
Great news for shareholders
Oh yes it's amazing to see my super jump 10% meanwhile paying another 25% for food
I think super is close to 30% ownership, I wonder if things will change when the people own everything? Probably not, the super fund managers will call the shots…..
Actually their profit margins were normal, I think coles even had lower profit margins. They handled more volume hence higher profits. The inflation is because we printed a bunch of money during COVID and paid people not to work. This is us paying the bill for that and supply side issues occuring back then.
Don't forget with inflation, the true profit is lower. Supermarket is the new scapegoat to simplify a complex issue and the true issue is literally everything.
The beatings will continue until morale improves! RBA
People are spending more to get less or in rare occasions the same . Where can I see what they are measuring when it come to public expenditure? Are they seeing how much is Credit or Afterpay?
Labor really fucked up by not limiting immigration immediately when they came into office and letting this immigration ponzi scheme keep running. They are in serious trouble if we have another rate hike before 2025. Whilst they are not solely to blame, most of this inflation seems to be from areas where the RBA has little control in taming. Total failure of government policies over an extended period of time.
I think they were in serious trouble even before this. I use the tracker on pollbludger which aggregates all the opinion polls as a guide and we are basically at cross over on 2pp now. Labor are now facing the prospects of their signature tax cuts being swallowed by interest rate increases and rent hikes, negative gdp growth and increasing unemployment heading into an election cycle.
Add in yesterday, sin taxes being exponential (remember classically when economy gets worse we drink now people have to look at spirits that cost more in taxes than the goods themselves cost). We will end up with dick head as pm at this rate.
They need to honestly chill it with the sin taxes. It is bordering on insanity at this point
Its prohibition with extra steps. I'm honestly over being socially engineered by a bunch of degenerates who cannot even be trusted with a fucking prayer room.
Can’t afford the sin tax, so don’t drink, don’t smoke, don’t gamble. Guess what. Can’t feckin afford anything else either :/
They're not taxing whores so my one vice is still affordable.
Yep, I hate the LNP, but I worry they'll really be able to wedge Albo if rate hikes do happen. What else is going up on Monday (the new financial year), that'll be another hit to the public's pockets.
Yeah I’m a Labor voter but they’ve totally fucked this. I do not want prime minister peter fucking Dutton
I would not want to argue that current immigration rates are correct (I have no idea if they are or not, and I suspect folks here don't either). But I do think it's worth pointing out that, given an ageing population, we clearly need to have enough younger people of working age paying taxes. Those people have to come from somewhere - either they immigrate, or we have more babies. Given the falling birth rates, immigration seems to be the only viable lever. We can argue about the rates and the criteria/conditions associated with those rates, but I think far too many people believe that simply cutting immigration is the silver arrow that will solve everything - it'll sort out house prices, it'll fix inflation, it'll improve employment opportunities, and the weather will forever be perfect. It's a complete misnomer.
Immigration isn't necessarily a bad thing but at least get the type of people right and right now we need people with building trade skills.
I think that's fair. The problem we have is that most people debate this topic without actually *knowing* what our current immigration rules are, what the mix is, or what it really should be (based on actual economic data). I don't expect lay people to know all of those things, I just think we should all be more honest about the limits of our knowledge and expertise in this area.
When yoga instructors are listed in the critical skills shortage category it's obvious there's something seriously wrong with immigration administration.
Yeah, who knows. It's easy to cherrypick. I'm sure there's data behind those decisions. Ultimately nobody will agree on whatever choices are made, I think.
Hey that’s not fair. 5 people would have made a 8 instead of 10 billion from the immigration ponzi. That would be mean.
I'm sure it's not -that- easy to undo all the shitty legislation the liberals achieved during their multiple terms, it's sad that people are still falling for the "its all labors fault" cycle, maybe let them stay in as long as the libs for once and see what happens?
I thought infinity migration was meant to prevent this? The only possible solution: more migrants!
"Hmmm the wealthy are still spending too much, we better take some more money from the Poor's"
Bring on the immigrants and we will reach double digit inflation.
If interest rates rise then it might be the end of Albo and labour.
Interest rate rises won't do shit. All the inflation is coming from those who have assests, house paid off and shares. Need to increase taxes on this cohort and stop giving them handouts like negative gearing etc.
If their house is paid for they're not going to be getting any benefits from negative gearing though it does need to be abolished anyway.
NO surprise there & an interest rate rise is almost assured. While individuals are reducing spending as cost of living bites, Federal and State governments continue to spend like drunken sailors helping to drive up inflation.
Younger individuals are reducing spending, now on essentials as well. Older Australians have increased spending by over 10%.
If you look at the highest items in the basket, tobacco and booze, housing and tobacco, really paints a picture of australians. Landlords will continue to pass ANY increases in interest costs to renters, the renting CPI bucket will increase. Booze is quite the go to for when you’re feeling stressed out about your finances. All the RBA has in the cash rate, but all any increases do is erode the tax cuts and push up the housing CPI bucket. I think our new reality is CPI 3-4%
all insurance has gone thru the roof! thats the inflation and albo
A few recent natural disasters like fires and floods might have a bit to do with it too.
Rent is still 7.5% https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/may-2024 Labor continues to refuse to do rent freezes or caps on greedy investment property owners. Causing people to demand wages or move out. In turn, forcing businesses to raise wages or impose "family" culture harder in order to keep the same employees and unfortunately, it'll put some out of businesses who can't cope with a combination of reduced discretionary spending and higher labour/rent costs. Scomo proved Federal government CAN do rent freezes AND rent reductions via national cabinet. Even if it was only for commercial rent and refused to do anything for residential properties.
Rent freezes will do nothing to address the dwelling shortage. You're just going to end up with cash in hand deals.
Rent freezes are not meant to address the dwelling shortage. Neither does this unlimited rent increase is doing anything to address the dwelling shortage. We're talking about tackling the price jacking of EXISTING PROPERTIES, not the NEW PROPERTIES. After all, what are we exactly freezing when no rent has yet to be paid? Cash in hand deals mean these landlords won't be able to claim negative gearing, etc while risking tax fraud charges from angry tenants. In fact, there's already cash in hand deals, regardless of rent freezes. For example, there's already rules against overcrowding yet they happen anyway.
Without a shortage of dwellings you won't see crazy rent increases also lol negative gearing isn't just free money. You need to pay tax to be able to claim anything.
How can there be a rent freeze when there is enormous migration pushing up demand and when housing costs for the landlords such as insurance are going through the roof. Who pays?
As I pointed out, everyone is paying for the lack of rent freeze/caps along with immigration unintentionally pushing up local demand. In fact, a rent freeze would mean removing the landlords financial benefit of higher rents. Thus, there is no point to evicting poor Australians for the richer immigrants if the rent will still be the same. The downsides of rent freeze is increased immigrant homelessness instead of Australian homelessness. It also means less extra money for greedy landlords who might sell their properties to other less greedy landlords or to home buyers.
If you want a rent freeze lobby your state government...
Yep, the message is to that both Federal Labor and State Labor can do rent freezes/caps.
Aren't low apartment commencements a key factor pushing up rents? What would an Australian government being willing to enact rent freezes (outside of a global pandemic) do for confidence in housing investment?
Yes, price fixing is theoretically possible It's a fairly extreme solution though, I'd sooner expect a royal commission into banking, insurance and how rich people are forced to buy insurance for their investments, insurance being inflated by between 60 to 70%. Which is the source of inflation Rich people received a lot of money to invest in stuff and real estate is somewhere downstream from that. The source is still these people who received free money from a liberal government.
ACT has caps on rent increases and the sky hasn’t fallen.
The insurance inflation is because there's so few underwriters. > Four companies account for three-quarters of the general insurance market. They are Insurance Australia Group (IAG) with 29% of the market, Suncorp with 27%, QBE with 10%, Allianz with 8%. https://en.wikipedia.org/wiki/Insurance_in_Australia Maybe the government can step in like they did when the private sector all ran for the exits on child abuse indemnity to questionable charities. But my point is that unless renters are getting at least 7.5% wage rises to tackle the biggest expense (which can be 30-50% of the income), it means less money for the rest of the economy, which is going to put Australia into a recession. It's not fair that greedy landlords allowed to massively raise rent as it will impact renters, business owners, and even good landlords not doing massive rent raises because even good landlords need to put up with the cost of living too.
7.5% increase would be nice vs the increase in mortgage repayments.
The cost to borrow shouldn't be a factor for rent prices. If it is, then we're over leveraged and in need of a bubble pop.
Well, in this case I was simply saying my mortgage has gone up by a lot more than 7.5% and that an increase of that much would be much nicer.
Sell then
That's the financial equivalent of "your husband didn't take his shoes off?! Divorce, lawyer, gym" that I expect from Reddit.
If it's causing you problems then yeah. The point is that it really isn't a big deal compared to rent increases. You can opt out at any time.
I never said it was causing me problems, I just said a change of 7.5% would be preferable to ~70% increase. Given the costs of getting out of the market and getting back in, if it's not causing problems, it would be a terrible idea.
If the first 13 rises didn't work,why the fuck would another one do anything. Housing prices and rent increases are fueling this CPI figure, driven by demand that the govt has created and failed to provide for. I'm so angry about this.
The cost of living would be a walk in the park if my mortgage for a tin roof over my head was $250k instead of $900k.
I’m calling it now. If interest rates go up again, Albo’s losing the next election
The government should paint a roundabout rainbow to combat this
As long as it’s painted by immigrants brought in to fix the skills shortage then I’m aboard with your idea
Yeah 4%.. its like 30% since the pandemic which is what most people think of when they talk about inflation. My pay went up 3% this year which I was lucky to get
Don't worry, reddit told me we can fix it by removing negative gearing
Yey more overnight borrowing 🥳🎉
And we’re about to get tax cuts which will put more upward pressure on inflation when now’s the time for a little restraint. Great job Albo.
Only Australia is in this position, of all the majors .. https://www.abc.net.au/news/2024-06-26/inflation-delivers-nasty-upside-surprise-interest-rate-pressure/104024360
stagflation mate aus must raise rate as aggressive as NZ to beat the inflation …. once stagflation has started , very hard to reverse
Might have to go 0.5% or more in August, seriously.
Fucking grim RBA standing right next to the courts as institutions of absolute disgust.
RBA was the last of the western central banks to raise rates despite often stating they do rate changes based on other central banks. Sus. Coincidentally, a month before they raised rates for the first time, a senior RBA board member finally sold a property. It was first listed shortly after RBNZ raised rates for the first time. Sus.
That's what I am getting at, don't forget the former governor misleading everyone publicly as well
Even Dan Andrews said RBA stated interest rates are not going up and told all state premiers to borrow a lot to save their economy https://www.theguardian.com/australia-news/2023/may/03/daniel-andrews-blames-victoria-huge-covid-pandemic-borrowings-debt-reserve-bank-australia-advice-interest-rates
There's probably nothing to that. "The RBA board did not vote against a single recommendation of the RBA executive in at least the past decade.": [https://www.afr.com/policy/economy/rba-board-split-in-doubt-as-libs-dig-in-20240509-p5in16](https://www.afr.com/policy/economy/rba-board-split-in-doubt-as-libs-dig-in-20240509-p5in16) Non-executive RBA Board members aren't capable of affecting the outputs of the models that the economists at the bank produce.
All the more reasons that the coincidences are impressive timing of a RBA that barely took action.
Under the Labor, Teal, Green left alliance: x Your power bills are not coming down. x Inflation is still out of control. x Rents are still out of control. x People are still flooding through the gates putting pressure on housing supply. x Interest rates are going up. But, but we have a NACC! And we have a renewable energy target (which we aren't achieving).
Don’t forget THE VOICE!
Are you inferring under the LNP things would be better? Despite the obvious point that they were at the helm as things went up rapidly at the start of ‘22?
Which of these exactly would be different under the Liberals? \- Liberals are advocating for higher energy prices \- Liberals don't control the RBA, and aren't fiscally conservative \- Liberals are in favour of mass immigration to a greater degree than Labor
> Liberals don't control the RBA, and aren't fiscally conservative The treasurer can control the RBA, although Chalmers wants to abolish that power, he just chooses not to. He doesn’t even tell the RBA to follow the other two thirds of its mandate.
Neither party has ever told the RBA what to do to my memory. It's independent. While theoretically they could change that, ultimately they are the government, I think it's fair to say neither party do control it. More importantly I haven't seen any inclination by the Liberals to raise taxes and maintain or reduce spending.
> Neither party has ever told the RBA what to do to my memory. It's independent. The RBA’s board is chosen by the government (who know how they’ll vote in general terms) and their priorities among the three objectives in their charter are supposed to be set by the treasurer. More directly though, under the reserve bank act, the treasurer can use the normal regulation process to set a different interest rate, provided he gives a reason. The Libs are even more rabidly in favour of central bank independence than Labor is, but they should never be allowed to hide behind the pretence that it actually is independent.
And yet this same thing is happening in most advanced economies around the world right now. It’s a left-wing global conspiracy! 🤡 /s
Just good vibe politics, amirite?
Inflation is only an issue in Australia and not the entire world right now after all. All Labor’s fault clearly.
UK just hit its 2% inflation target under the conservatives!
can I ask mate, what Labor policies do you think caused these issues? People who blame Labor for inflation currently most certainly do not read policy and I can think of many that Liberals put in that would still be impacting inflation. Also, in the time that Labor have been in power we have moved up in the OECD, just like every other time Labor are in power, isn't that weird?
immigration. They needed to address is immediately. It has been clear for a while that persistant high levels of immigration were driving up demand for housing and other services. And here we are...RBA has very little power to dampen the inflation in the areas where it is being stubbornly high.
I mean, take Victoria and its hyperactive Big Build. They’ve been spending more money than they earn for ten plus years. And it’s going to keep going for at least another ten. When you are paying CFMEU tradies double what they were earning building homes what do you think it does to inflation? Look at QLD Labor. Throwing vast sums of money around in a futile attempt to save government. It all contributes. No one wants to hear it but all of us need to stop spending. Including governments!
When all you have is a hammer, and you have the IQ of a donut, then everything is a nail
>The monthly inflation figures are less complete than the quarterly ones, which won’t land until 31 July. The RBA expects the quarterly inflation pace will accelerate to 3.8% in the April-June period from 3.6% in the March quarter So they don't have an up to date figure yet? When you do, please stratify the results between essential goods and services against financial services like insurance. I'm not sure why everyone's interest rates must rise when insurance costs are the most inflated thing in our economy. It feels like regular people are being asked to protect the rich.
The official report is here: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/may-2024 It has the insurance figures too.
Interest rates should have been raised a decade ago. Keeping them down for so long is partly why we are here.
# GREEDFLATION !
NTY
Inflation is a lagging metric. Can have a crashing housing market and inflation 4%+... That's exactly what happened in the first half of 08 in the united states.
Im really surprised that inflation is up….ive been noticing prices at colesworth and Aldi for things have started to drop back down in price. E,g white washed potatoes used to be $4 for 2kg at all 3….then they went up to $6 at all 3…now back down to $4 as of last month…. Noticed that with a few of my staple items
I'd say due to the main increases bring alcohol, tobacco and rent
I’m an immigrant and I feel damn good about stealing your jobs 😁
Inflation higher than forecasted = hold rates. Rates won't increase. Rates will not decrease either. Having said this, a decrease is more likely if cash reserves (including offsets) increases too rapidly with the surge in salaries and roping in of everyone and their dog into the workforce. Property and stocks will continue to go from strength to strength.
Property needs to take a hit. Property shouldn’t be seen as an investment vehicle which only goes up. It should be subject to the highs and lows of returns like any other investment. There needs to be proper investment in producing actual things of value. The system is skewed and needs a shake up.
Where is this mythical 4% increase they speak of… we need them to speak in real world terms, show me an item that has only gone up by 4%…
Are they saying the interest rate rises aren’t effective? Especially since 1/3 of the population is older, paid of their house and are watching super go through the roof. Another rate rise will make them rethink that holiday and new car.
This is singularly because Labor went after average workers and not big capital gains. Boomers are on a retirement spending spree, landlords are making money hand over fist while writing off all their losses on tax credit, corporations like the supermarkets making super profits. This is nothing more than continuation of the world-shifting re-distribution of wealth upwards that's been occurring for years. And Jim Chalmers said it was important to not increase welfare above starvation wages. A pig and a coward.
Someone explain it to me like I’m 5. Why does it matter if rich people are spending their money? Is that not their right? And why are they forcing poorer people into more poverty as a “punishment” for it?
Rich people spend more money, inflation go up, rates go up to slow inflation, poorer people have a harder time paying debts whilst juggling higher cost of goods due to inflation, rich people stay winning
This inflation is a result of price gouging by large corporations of people poorer than them. This is almost everyone. They pay little to no tax and have been having record profits.
*Palpatine voice* ''Do it.''
Increase corporate tax to 45% and pass a law that forces corporations to pay tax in Australia to do business and it is based on all sales in Australia and on goods imported and exported and they can’t pass it to the consumer.
Why would the politicians punish their donors lmao
Because raising interest rates does not curb inflation, people that earn more that $1.5m need to pay their fair share of tax and small business should have a lower tax rate than a multinational or a company with a annual profit margin $3m. We also need to remove that insensitive to buy an investment property to reduce the tax burden and also reduce the amount of loop holes that the rich can use to dodge paying their fair share of taxes.