Australia can either drift into a divided society with stagnant real incomes or make the difficult decisions needed to lift productivity and restore growth.
Our inflation problem is home-grown. Treasurer Jim Chalmers’ claim that international factors are to blame for our problems is nonsense.
This is urgent given we cannot defend ourselves at present and may no longer be able to rely on the Americans.
The US Federal Reserve held rates constant as it waited to see what policies Trump implements. The Reserve Bank should also wait until after our election and it knows what policies will be implemented here.
The Albanese government may not have caused the problem, but its policies help determine why the interest rate pain will last longer here.
We can’t be sure what the industries of the future will be, so it’s more prudent to compete in fields where Australia already has a good reputation.
While international inflationary pressures have eased, there is still plenty to worry about at home. And government policies aren’t helping.
The $100 billion carbon tax proposal would be an act of amazing self-harm and would destroy Australia’s big export industries to force-feed unproven ones.
The treasurer is hoping for a smooth landing on inflation, but the supply-side policies of his fellow ministers make that less likely.
Despite conflicting monetary and budget policies, can Jay Powell get inflation down without unexpected collapses in financial markets? We should all hope so, but it is no certainty.
Unless other countries have raised interest rates too much, governor Michele Bullock could soon face some difficult decisions.
Recent Australian governments have lived off the gains of the reform era, but none of them have tried to blow these up the way this treasurer has done.
An extended mild recession and sticky inflation is more likely – and new shocks could land us in deeper trouble.
If the Albanese Government’s multi-employer bargaining and restrictions on the gig economy push up wages in the tight labour market it may take a recession to get inflation under control.
The commodity price boom has a way to run yet. It is time for the federal treasurer to acknowledge it and explain how the largesse will be best used.
