https://www.news.com.au/finance/economy/australian-economy/a…
this is actually good news? i feel like the interest rate hikes are slowing down inflation and the 'fear' of a housing collapse will ease if inflation continues to 'slow'
6.1% is still too high for the RBA but it is well under the +7% feared….i wouldnt be surprised if this impacts rate cutting decisions - which is good for people with a mortgage
I think the only impact will be a 50 basis points increase rather than 75 basis points.
It's still way out of control and the reinstatement of the $750 pandemic leave disaster payment is still pumping more money into the economy.
reinstatement of the $750 pandemic leave disaster payment is still pumping more money into the economy
???
You could just be stating a fact but if you'd prefer to have sick people serving you at the shops I'd urge you to reconsider. Also I'd point out the government is awarding twelve times that amount in stage three tax cuts next year. Sure those people it's rewarding are so rich they don't actually add much to inflation and they're giving the money back in a really obscure way…but I mean come on???
My issue is not as much with making disaster payments as it is with the blanket approach that is used.
Under this scheme, someone working 20 hrs on minimum wage is better off claiming the disaster payment of $750/week. This translates to an increase of over 75% for them. Where is the incentive to work rather than "claiming" they are sick or caring for someone who is sick?
The businesses are struggling to fill the workforce as it's more convenient and/or more beneficial for some of the employees to simply not work and claim this payment instead.
Edited to add: This is pretty much in line with what they did with $1800/week being paid out to Uber and Taxi drivers and $10K/week paid out to cafes with a liquor license.
yep the payment is fair but should be capped at actual lost income or 750 the higher amount
@Donaldhump: It would probably cost more in administration and checking than they would save in payments given out. So why pay public servants more/give them more work to do when you could give the same money to people on the very bottom of the socio-economic ladder?
@Quantumcat: maybe buts thats whats caused this shit storm, and no diff to centerlink staff costing money. Alternatively give every one 400 a week and piss centerlink staff off.
my mates kid was 18 flipping burgers every saturday getting $140, next minute he on $750 a week to do sfa. Kids is loaded now, mean while his dad went to work f/t and cleared 900 a week
@Donaldhump: Projects cost money and mean more contractors needing to be hired.
What they should do is make Harvey Norman and other companies that made a profit when they were supposed to be having a loss, pay back the money they shouldn't have been paid
Inflation 6.1% 'good News' ?
obviously not if you are trying to save a buck (or a gold)
7.2% annualised over the last quarter.
Great if you've got a mortgage - helps pay down your debt quicker…
OzBargain deals make me do the opposite.
Makes paying down the mortgage slower.
Higher inflation equals higher interest rate on your mortgage. More money spent on interest rather than paying off the actual loan.
Unless your income rises, higher inflation doesn't help pay off your mortgage either.
You're also paying more for everyday goods. Money that could be used to reduce debt is now being used for products that were cheaper.
"higher inflation doesn't help pay off your mortgage either."
does if its fixed at 1.99% and your getting 4-5% in franked dividends or soon to be term deposits.
until the 1.99% loan finishes in the next few years…..
@Ade99: yeh then you move the money that is paying those frank dividends and term deposit interest into your offset account
let me see
200k fixed home loan at 1.99%, 200k in shares paying 7.2% dividends monthly. day fixed expires sell and move shares into offset.
or
pay 200k off home loan and never have access to it.
rising tide lifts all boats…..
i think the titanic would beg to differ
'fear' of a housing collapse will ease if inflation continues to 'slow'
You really need to look into the data here
Year on year changes:
Transport +13%
Housing +9% (this is because less government grants paid out, but you can thank the grants for jacking up prices)
Furnishings, household equipment and services +6.3%
Food +5.9%
Transport feeds into basically all components that have gone way up.
I feel like if you stop people buying new homes (having to transport the material, pay out subsidies, try to get tradies then having to buy new furniture) then you solve our inflation problem.
At a personal level, drive 10% less and fuel problem is solved. Or just buy a hybrid and cut the fuel use by 40%.
Food +5.9%
So they aren't counting meat in their figures then?
I've been too poor to eat meat for the last 20 years.
We used to have a nice steak once a week, now it's once a month. $50 for 3 bits of eye fillet is ridonculous.
I just eat Chicken all the time, some beef or pork would be nice.
Inflation should reach 9% by the end of the year, the wage increase needs to keep up so people can make ends meet.
May need to drastically increase taxes to help fund the healthcare system which is buckling under the strain of basically everything at this point.
I’m sure everyone would agree since everybody needs the health system at some stage of their lives.
No worries, increase salaries you'll push people into higher tax bracket. Easy money! Been happening for decades. The government gives a small tax cut every few years to keep people happy.
May need to drastically increase taxes to help fund the healthcare system which is buckling under the strain of basically everything at this point.
Where are the employees going to come from? Isn't everywhere understaffed right now? Allocate more money to the healthcare system and strip other industries of their staff.
I don't think you're wrong but I don't think there are any easy solutions. How are wages meant to keep up with inflation; especially if everyone is taxed more?
I’m sure everyone would agree since everybody needs the health system at some stage of their lives.
Most people need something at some stage of their lives. Do we need to pay teachers more as well? How about police? The more we look after the public sector, the worse off everyone else is.
A nurse I know (who's been out of uni for maybe 4 years) made over $100,000 last year and she only works 7 shifts per fortnight. Yes it is shift work and they are 9.5 hr shifts, but that is crazy money. How much more money do they need to be paid adequately?
Well, that's a sample group of one, and she may be highly specialised. There are plenty of other healthcare professionals who are on $50k p.a., working shifts and keeping hospitals running.
There are so many other expenses in Health, from one-use instruments, to updating outdated machines. It's like Education. You get what you pay for.
As to stripping other sectors of potential workers, I'd like to see the evidence. Health is very particular, not for everyone, and it takes time to qualify, so I can't imagine a mass exodus from other areas.
I can't imagine a mass exodus from other areas.
We can all work two jobs.
@Lastchancetosee: Most definitely. I wasn't being sarcastic and I really look forward to working 80 hours a week.
In all honesty, I find it difficult to comprehend how we got here. In the 21st century we have access to better technology and machinery than ever before which has enabled us to be ridiculously more productive than in the past. How is it that we have staff shortages in just about every industry all across the country? There must be a lot of jobs out there that don't contribute in a meaningful way to society and too many people living off government handouts. Our country is broken.
@Mr Haj: I agree regarding technology. We could eliminate many mindless and repetitive jobs. This would free people up for training in human services, like healthcare and education.
Re handouts, you prompted me to look at the statistics.
https://www.aihw.gov.au/reports/australias-welfare/welfare-e…
We do spend a fair bit on welfare, which includes tax cuts, etc., but our overall level is 10% of GDP, which is actually quite conservative compared with the 2017 OECD median of 13%. We're on a par with the USA and UK. Top runner is Finland at 22% with Italy and France at 21%. Mexico is the lowest at 4% - no surprises there.
@Lastchancetosee: Finland should take the cake. Pretty sure every citizen receives welfare, whether they work or not. I didn't realise it costs Italy and France so much.
@Mr Haj: Yes, I was surprised at most of the figures. I expected the USA to be a lot lower than us, and definitely Italy. France had a socialist government under Mitterand, and the social security was excellent. Higher taxes, but healthcare was first class. Same with support for people in the country. I knew some Americans who came over to do IVF in France because it was cheaper. Subsequent governments have cut back progressively on social welfare. It hasn't stopped the need - just made the processes longer and more difficult to navigate.
So.. your plan to curb inflation is to give people more money to spend…. which means they spend more which raises inflation?
I hope it goes through the roof and housing collapses, not just by the 40% it went up last year either.
Given the quality of houses in this country if anything goes through your roof the house will collapse.
I feel for the people with "a" mortgage… I don't feel for the people who have "18" mortgages. Those are the ones I want the bubble to burst on.
I feel for the people who can't get an mortgage and may be able to afford one hopefully soon. Even if it's "garage" size. I don't feel empathy for anyone who has been using the housing market for investment.
Don’t forget the target had always been 2-3% inflation so it’s 200-300% higher than desired. Why would this be good news at all? Step on the brake and increase it by 75-100bp next month.
There is zero chance that inflation is ACTUALLY 6.1%. Look at your own spending in utilities, groceries and fuel. Actual inflation is multiples of 6.1%
The Australian dollar dropped today after the inflation announcement - because it is now expected the RBA will raise interest rates 0.5% instead of 0.75% as was expected.
0.75% was a long shot, the RBA has been behind the curve all this time. I think reality will force their hand.
Canada raised 1%, US is definitely raising by 0.75% if not 1%.
Reality will disagree with the RBA and slap some sense into them. The cash rate is STILL only 1.35%, its beyond a joke. The cash rate should be at least 5% right now.
With 6% inflation house prices get less in real terms (apart from the actual house price movements) assuming you can service the loan of course!
Well, the US just added 75bp. So right now, NZL, CAN and US are all at 2.5% and we are only at 1.35%.
If we go up by 50bp in August as expected we will only be at 1.85%. If the RBA is serious about controlling inflation it needs to be 75bp. 100bp would be out of the question. It needs to grow some balls to do that.
our economy is fairing better then all those nations…..
You mean we are only at 30 year high inflation rate compared to the US at 40 year high?
i said it is 'fairing' better i didnt say it was a lot better
@Trying2SaveABuck: If our economy is faring better then there should be more scope for interest rate hikes as there is less prospect that those increases will precipitate a recession.
The answer to this is to be an OZbargainer. Much of the inflation, particularly in goods and services is profit taking. Businesses only exist for profit, but in the last few years have grabbed extra as they have been able.
Don’t buy unless you need to. Bargain hard - don’t accept an excessive price, go somewhere else. Businesses will start to ease margins.
Nah, interest rates will keep rising & house prices will continue their crash - its clear in the CoreLogic data
Actual inflation rate is much higher. The smoke and mirrors way they calculate CPI is a joke.
IMPOSSIBLE!!
Unemployment rate is still well well well below that static, recalcitrant and persistent ~5%
They wouldn't lie to use, would they?
/sarcasm_off
PEPSI MAX is now $1.50 per/l.
Was $1.08, then $1.20.
Inflation has not peaked
September 22 quarter release - "hold my beer…"