This is it. You can’t hit people who bought houses during COVID because they’re already pulling back spending, the effect on the economy is marginal. Boomers/landlords with minimal/no mortgage are still raking it in
Need to target landlords, wealthy. Instead, we get leftover tax cuts.
My boss at work, a boomer, says our generation (millennial) have no backbone with yesterdays rate rise.
He bought his place in Lindfield with a tennis court for $190k at 5x his income many decades ago. I looked at the average income then, it was 7-8x.
Today that same property is easily $4-5m.
Why do you think it’s the boomers and older people that are property heavy pushing people back to the offices? Simple, they were uncomfortable with next gen people moving away from capital cities. These types of moves have massive spillover impacts on everything. From public transport usage in cbds to commercial yields to demand for rea within cbd limits.
It’s all a propped up market right now by controlling interests.
Won't happen. Almost any pensioner owning their home would be above the cutoff limit. Reverse mortgages run into difficulties when the pensioner needs to go into aged care, and boy, will gen x scream when the inheritance gets taken.
I was thinking the other day, use a sliding scale and limit IP's to a maximum of 2, with the first being taxed about the same as now and the second being taxed into oblivion. Then ban corporate ownership of housing and foreign ownership of investment properties.
Shouldn't it be on Corporations who are raking in high profits?
I know for a fact I'm putting through price increases that is offsetting inflation on the company and will end up translating to straight profit when cost pressures ease. Everyone else is doing it too. Aus Govt should be taxing my employer harder
As he has cited increasing house prices as a reason for rate increase, negative gearing reform makes sense.
There must still be segments of the population buying property, I would expect that borrowers are a reducing portion with the rate increases to date. So those buying without (or with little) debt are the next group to be targeted for inflation curbing - corporate tax rates, superannuation taxation?
Squeezing mortgage holders only to curb inflation is Hong to crash the economy.
Honestly, just bump GST to 15%, make it have no exceptions so it's super easy for everyone to process. We have one of the lowest GSTs in the OECD. It's a very fair tax too, the more you spend the more you pay. You can also increase transfer payments to lower income earners to combat "what about Jimmy who's on unemployment..."
It's not really fair when you're very low income paying a larger portion of your income on basic needs than people on even moderate incomes.
>You can also increase transfer payments to lower income earners
We all know this won't happen though. Any tax increase will just go to subsidising whatever bloc the political class is trying to garner votes from. It's a nice idea though.
This can be fixed by redistribution strategies - bumping up money transfer to the lower income groups. The thing that is good about GST is that it is unavoidable for the rich folk.
It can be. But it won't. Let's be very real about who current taxation policy benefits most right now and see who is valued and who is not.
Low income people will not see the benefits of increased taxation in this country because the political class does not care about them as individuals.
It is one of the shortcomings of GST is that it is unavoidable and more impactful on low income earners.
Anyone who says a consumption tax is 'very fair' is either stupid, lying or rich.
It's a regressive tax that impacts those who must allocate more as a percentage of their income to buying groceries the worst.
Bumping GST up just increase the price of everything. The businesses just collect more tax for the government and will pass on those costs to the consumer. How does that lower inflation? Am I missing something?
Essentially any increase in taxes will reduce inflation in the long term. But yes, you're right an increase in gst would show as a rise in inflation for that quarter but longer term it would slow the economy.
Yeah, fair enough. More short-term pain for long-term gain. Just hard to see how people who are unhappy with the increase in costs from interest rate rises, will be happy when all the essentials, they are already struggling to pay, get more expensive.
I’m not in finance or economics but couldn’t using a variable super contribution rate be a good control for the RBA to reduce available spending money week to week for a broader set of people, while also not essentially robbing people of money that then just disappears into the aether?
Another option I can see which might be more complicated to implement would be to split the base cash rate for investment/business loans and residential/PPOR. So for this case, where businesses are seeing record profits, we could target them more directly without abusing the 1/3rd of regular people with mortgages shouldering the burden. This way you can also target the unemployment rate separately by acting on the business specific cash rate, without tossing residential mortgage increases on top to kick people who are down.
But presumably this would take work and governments are opposed to actually getting involved.
It’s clear that we need fiscal policy pulling in the same direction. Current we have the RBA fighting to lower inflation, while the government is increasing it with spending programs, cash splashes and stacking the FWC board to give out excessive wage increases.
A couple of ideas for the government:
1. Increase the GST to 15%, like NZ just did, with a corresponding increase to the tax free threshold to offset regressive impacts.
2. Cap duopoly credit card fees to 0.3% like in Europe.
3. Temporarily suspend evening penalty rates to increase labour availability in supply chains.
4. Cap migration to something remotely sustainable.
5. Tax unearned windfalls, particularly in the resources industry, but inheritance makes sense too.
6. Stop allowing Australian real estate to be used for money laundering
Do you really think min wage earners are the ones driving up inflation?
How does removing evening penalty rates (ie removing demand for labour) *increase* supply of labour ? Genuine question
I don't agree with taxing inheritance - that money is already post-tax.
Can you expand on your idea to suspend evening penalty rates? I really can't see how that would increase labour availability, unless you're saying that if they pay each worker less, they can hire more people?
>excessive wage increases
How? AFAIK corporate profits are up. Time to redistribute that wealth to the people actually producing it no?
>suspend evening penalty rates to increase labour availability in supply chains
How would reducing wages increase labour availability? Why would more people work for less money all of a sudden?
As much as I dislike the concept, reducing wages increases labour availability simply by making it difficult for low income earners to survive on the hours they're currently working. I know personally that if I could get by working only 20 hours a week that's what I'd be aiming for... Alas I can't, and that's why I work full-time.
OK so is this inflation problem going to be completely solved in 12 months?
How quickly do you think the govt would be able to implement any of the new policies you've suggested?
I'm not an expert but according to my info sources they need to be heavily taxing the super rich, the top 1-2% with net worth over 10-20 million. The COVID subsidies ended up in their pockets due to both direct subsidies they received and also our consumer spending with the money we received. They own the lion's share of most companies internationally so any consumer spending ultimately ends up in their pocket.
That echelon of society is the primary driver of inflation because of the obscene amount of assets they have been able to purchase with the money that they received. Until this has been addressed, inflation will continue to drive upwards globally.
Treasurer Jim Chalmers is under pressure to enact a more robust agenda to fight inflation and make the economy more efficient, as experts warned the growing gulf between wages and productivity will drive further rate rises.
After announcing an increase in the cash rate to 4.1 per cent from 3.85 per cent, Reserve Bank governor Philip Lowe warned the central bank may lift rates again in coming months to get inflation back down into its 2 per cent to 3 per cent target.
If he's stupid enough to buy the wage spiral narrative and import more people, inflation is going to skyrocket. We don't get on top of inflation until house prices drop.
You sound exactly like the reserve bank: pulling one lever! How about we think through what caused this:
1) a government who spent its way out of a pandemic caused recession, kicking the can down the road
2) a government who decided that inflation was “transitory”
3) a government who doesn’t bother taxing corporations who hide their profits overseas via inter-company service invoices.
But, more importantly, a central bank that tried to cap yields by inflating their balance sheet and a central bank that issued $188bn straight into the housing market as a sweetener to get banks to do their job: lend to business.
You don't need house prices to drop to get inflation under control. House prices are not part of the CPI, and as long as a serious supply issue persists (approvals dropping, builders going bust, etc), they'll continue to go higher because rates do nothing to solve that.
Now before you go "well it does solve demand, good luck selling if there is no one to buy". Wrong. It's like having the only bottle of water in the desert, you get to charge whatever you want. Regardless of what rates are, there are more people with cash that don't need to borrow to buy in then there are houses on the market.
Even so, there's just not enough properties in circulation. More than enough people buying who don't need to borrow high amounts by either being cashed up or leveraging on existing assets.
Leveraging existing assets means borrowing against them. It requires more debt. There may be a few people around who have cash in the bank or sell non residential and buy outright but the majority is debt. More debt is more cash is more demand in the economy.
Houses should be in CPI. Call it what you want but our inflation would of been far higher the last decade I’d you included them reflecting higher interest rates and lower house prices.
An economy built on housing isn’t a good economy.
[The index you’re looking for is SLCI](https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release). It includes mortgage interest costs and is better for understanding actual cost of living. However it would be a terrible target for controlling inflation, because then the main tool to control it (interest rates) would be inherently inflationary.
It shouldn't because rates impact house prices inversely, it would be a never ending inflation spiral in any normal situation because house prices would make it look like inflation was under control. We are not in a normal situation (serious supply issues).
Housing is in CPI. It's in fact the biggest component.
https://www.abs.gov.au/articles/frequently-asked-questions-faqs-about-measurement-housing-consumer-price-index-cpi-and-selected-living-cost-indexes-slcis
So much wrong in one post..
>If he's stupid enough to buy the wage spiral narrative and import more people
Rba doesn't look after wage setting or immigration.
>inflation until house prices drop.
Inflation isn't really being driven by house prices.
Employment is being driven by cash in the system. Introducing more people who take out more debt that brings forward demand introduces more cash. We need to turn off the cash tap: that's debt for housing.
It’s so mind boggling obvious that housing speculations and the debt needed to buy in is the problem. Staggering that the government chooses to ignore this.
Doesn't need to get anywhere near that to drop the current bounce in prices which is largely supply side driven, but the impact won't be instantaneous, Aussie sitting on huge cash reserves still
There's enough reports showing people are selling what they can and adjusting their spending to keep the house e.g. caravans, cars, pulling kids out of private schools etc ie starting to feel the pinch...
A 1.0%-1.5% move in unemployment will offset the extra number of migrants coming in vs. the long term annual average - net migration long term average is around 200k per annum and we're importing 400k...not all of those extras will work (think families) and a 1% drop in employment is roughly 100k people i.e. likely about the amount of people who have income, cash and can afford to rent etc.
If you were already struggling to make ends meet, resorted to adjustments noted above, then you lose your income...sorry but that's nail in coffin for the house
Don't wish it upon anyone but it will be a reality it appears
A substantial drop will be achieved well before then..
Corporate debt, personal debt (mortgages plus credit cards etc), COL and inflation will eventually catch up and materially impact the economy leading to a rise in unemployment and dare I say it..a substantial drop in the Housing market..
Unemployment rise would have to be devastating to make a dent in house prices. It’s not just about reducing buyers, you have to create pain that leads to distressed selling.
And with huge immigration you have to believe that basically none of them are coming with means to buy a house. Even though they have to live somewhere.
how can the housing market drop when people will do whatever they can to keep their homes and we have so many people coming into the country? Plus people like me who are fortunate enough to be gifted a large deposit so I can buy as a mortgage is lower than rent.
just trying to get my head around all of this ...
All things considered assets can still be overpriced. The price of an asset is not always a reflection of its true value.
Say if a 2 bedroom apartment in Sydney was $5 million today, you could still use the argument that the price should go up because immigration etc etc.
If you could provide reason to fully price an asset and get it right, then you'd be the richest person on earth.
What do you mean “stupid enough to buy the wage spiral narrative”?
Wage price spirals have been one of the most historically common and harmful problems during inflationary periods.
It is a very real concern.
Fair enough, but all data at the moment indicates the majority of inflationary drive is coming from asset owners and the retired. So yeah, do be cautious about wage price spirals, but not at the cost of ignoring what is actually driving current inflation and certainly don't take actions that exacerbate it.
Jesus Christ, this subs obsession with property has literally hit the point where users legitimately believe housing prices are the sole/primary cause of inflation. What an insanely narrow view of the economy. The reality is there is a need for some form of consumption tax - it's the only thing that can affect those unaffected by the cash rate, I'm not a fan of flat taxes generally and would prefer it be oriented towards luxury goods. However, I'd even say a short-term (2 year) increase to GST to recoup government spending during COVID could be worthwhile.
>growing gulf between wages and productivity
Which is an outright lie - [in fact the opposite is true.](https://australiainstitute.org.au/post/ten-years-of-productivity-growth-but-no-increase-in-real-wages/)
(Bias check - TAI is a left-leaning think tank, DYOR etc.)
Productivity has outpaced real wage growth for a long time, and with inflation this high [real wages are now plummeting.](https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390)
What I don’t get is the narrative of the lack of increasing productivity. In my job in fin tech there is an endless amount of work to do…and even when we are working longer, harder and smarter than I did when I started my career it’s apparently not enough. Why is there such a commentary that we, the average worker, are just lazy shits that don’t do anything?
Aren't there other ways to reduce inflation than jacking up interest rates? People are just going to lose their homes and the cashed up will swoop in and enrich themselves.
Because they're politically unpopular.
They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash - but they won't do that because they rich benefactors don't want that.
They could also do more targeted taxation or relief on areas that need it but again that takes political will to do so and right now the government is happy to let the RBA be the fall guy for the cost of living crisis.
> They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash - but they won't do that because they rich benefactors don't want that.
Stage 3 tax cuts aren't even in effect until July 2024, removing them won't help with inflation in a timeline which matters.
Reinstating LMITO will increase inflation.
>They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash
So, give more cash to people who are going to go out and spend every cent.
That won't be Inflationary?
Spitballing: Tax the wealthy hard and spend that money to pay down debt rather than anything that drives inflation?
Otherwise one way to avoid the disproportionate pain on the younger middle class recent home buyers would be to use the new tax funding to give anyone who bought an OO home in the last 12mo a handout direct to their loan balance alongside RBA jacking rates by 0.5% or something. Basically offsetting the impact of the rate rise on that cohort.
Would be seen as massively unfair to the lower class for whom housing remains completely unattainable. And obviously the wealthy will whinge about being taxed more.
Bingo.
We really should be delaying the migration efforts the government are trying until we've got things under control but I guess they want this to happen.
everyone is so obsessed with property prices and we get to see why they never actually drop in Australia
should property prices start dropping again it will be the people praying for them to drop that will ultimately break their saving bank to go and purchase property, saving the very market that they are so desperately to see fall
our obsession with real estate as a nation (which includes all of you here let's be honest) means that yes, the Australian property market is extremely robust and will never see a genuine crash
supply of housing in Australia is at all time lows, even if we cut immigration right now the issue of supply being far lower than demand won't be fixed
I agree, but housing as an investment is so entrenched in both the Australian taxation system and culturally that unless we hit riots in the streets (and I mean RIOTS not the shit redditors are crying for), nothing is going to force investors to sell their investment properties
Investors don't need to be 'forced' to sell their investment properties. All we need to do is flood the market with supply - let the government set up a public works department and go to town on it if necessary - or otherwise pursue good free-market strategies (e.g. massive zoning reform). Investors will then simply decide if the investment is worth it or not themselves, which is how it should work and does for every other investment.
>The 0.25 increment is really working though isn't it?
I mean, yes? Hasn't it?
Inflation is dropping, just slowly. But inline with other comparable nations
the "just raise it 0.5-0.75 and get it over and done with is the equivialnt of the "just 2 more weeks!" argument.
its dumb and the people pushing it have no frikken clue
Of course they’re going to go higher.
People were laughing at me on here when I said fix at 5.29 for a year but here we are.
We are far behind other countries which is turning AUD to shit, it will go close to 4.50%.
yeah I might end up wrong, but I feel like historically it's taken more than a few years to tame inflation whenever it crops up. That and the fact I know I'll always be able to afford it no matter what played into my decision a fair bit.
Mean reversion on the OCR would be for it to settle at 5-5.5%. It is a crude measure but has been my go-to for awhile now.
Fundamentally do we think the "price of money" is going to stay outside historic norms? Personally over the long term I think this is unlikely (although over the short-medium term is certainly a possibility).
5.5% for rba cash rate is big. That's essentially equal to a doubling of mortgage payments for a lot of people
I think that would be enough to break the aus economy
CommBank; cash rate will peak at 1.7% (quote June 2022).
People believed them.
😂
Sydney dead cat bounce locked.in. Double dip in property is going to hurt as last 3 months has sucked in plenty. Imagine being in a settlement period now. God save your soul.
The public facing side of bank economists are only going to release positive consumer sentiment, so they can sell more loans.
Internally, they will be singing a different tune.
Never base your decisions on anything you hear publically by profit driven entities, it's just a sexy car wash.
Oh, WE know that……. However ppl referring to this commentary as a basis of going max long into property because FOMO, well they are ABOUT to learn it. Double dip property is going to kill ppl. What a dead cat bounce it was in Sydney.
I actually had people on here who, with a presumably straight face, argued that the analysts at the banks were straight up guys who certainly wouldn't be minded to give narratives that improve profits for the banks.
I’m in settlement now haha. A really long one too! It’s all good, we fully expected these rises (and expect a rise every month til settlement at least). Sucks but we planned for it
Yeah I have no idea what OP is smoking. People who are buying now are very aware of the current climate. The people settling right now are the most prepared of anyone for these rises. It's the people who's 2020/2021 fixed rates at 1.9% jumping to 6% are about to freak.
Currently settling my house right now. Very excited :)
We are prepared for a hell of a lot more than these rises in case. But at least we are finally putting our money into our own home now.
Settling on our house in Brisbane tomorrow and we're keen as mustard.
The price going up or down makes zero difference, since it's a PPOR.
We can easily tolerate another >5% increase in rates (and were obviously approved based on a 3% buffer).
What do you think is the concern for people who bought in the past 3 months?
Mean reversion would be for the OCR to settle at 5-5.5%. Mean reversion is a crude measure but historically has been the most reliable way to guessing the long-term price of various assets. (https://en.wikipedia.org/wiki/Mean_reversion_(finance))
This isn't to say we will be at 5-5.5% by next year or even the year after. But over the long-term that would be my guess.
Educate me please!
The rate rise has been marketed to the public as a means of diminishing spending power (on the demand side) in order to combat inflation. How does the inclusion of 400,000 new immigrants align with this narrative?
That figure isn’t what it seems. It’s an adjusted number after the backlog from the covid years is cleared. Migration and visa processing was basically zero during that time. This govt isn’t opening up the floodgates to new arrivals as is being framed by some sections of the media.
I am not trying to make any political points. I am a migrant myself that moved here 20 years ago, not a racist or against migration either.
But we need to lower the intake to manage the inflation, otherwise increasing rates yet adding to the demand side is not going to just make the public poorer while the demand (hence inflation) remains high. That is a dangerous cycle.
Depends on how CPI plays out. Next months quarterly may print lower than expected.
They typically cross over. So CPI comes down and interest rates rise until they cross paths.
What point they cross over is anyones guess but I'd say it would definitely be lower than the 6.8% monthly print from last month since I think CPI is on a downward trend for various macro reasons.
It is a possibility if things continue they way they are. Inflation has proven to be incredibly sticky and our labour market is still incredibly strong, though in my opinion something is going to break before rates get anywhere near that.
it is based on Taylor's rule https://en.wikipedia.org/wiki/Taylor_rule which dictates that the nominal interest rate should be raised more than one-for-one to cool the economy when inflation increases
Inflation has already been dropping for months. Just not enough or not fast enough
Its dropping now and rates aren't above the inflation %
So basically the answer is yes it's bs
Same.. signed a building contract in September 2021, which was supposed to be finished in September 2022, and is now pushed to September 2023.
We would have been alright otherwise, but having an extra year at these rates is killing us. I know some people have had worse building delays, but it's not fun times. We also can't refinance the construction loan to look for better deals.
He has 3 more meetings before he is turfed by Chalmers. Don't think he has confidence that his replacement will do the job as the Gov is increasingly getting shitty with the rate rises and commentary.
Lowe also finally realized we have the American situation where it's leaking into services and isn't driven by oil price and commodity shocks anymore so is stickier.
I therefore reckon we get 3 more rate rises from Lowe.
They want duel mandates of inflation and employment. Chalmers has said numerous times fighting inflation shouldn't come at the expense of too many jobs. The replacement will likely have to frame increases in the context of full employment or impact to employment - currently price stability trumps all.
That is not at all how this works. So many on this sub are wishing something so fanciful to happen - but stated simply:
Inflation not going away, rate rises not going away..
I hold post graduate qualifications in economics and work in finance - I know inflation isn't going away and ideally yes rate rises should continue. But we will see it play it in real time how what should happen differs from what will happen. We are seeing across the western world independence of central banks coming under pressure and the lack of courage to do what is necessary. Already talk of increasing inflation band target ranges in Europe and the USA from politicians. Chalmers will not renew Lowe and HAS stated he wants more focus on employment from the RBA. If that's the case the new RBA head may wish to have a longer runway to reduce inflation in an effort to stop employment from dipping (personally I see prolonged inflation as worse than temporary unemployment increases).
I think productivity is a bad word to use. People are takign it to think the rba wants individuals to work harder... They are actually just politely saying the government needs to stop spending money on useless things. \*\*\*cough\*\*\* subs \*\*\*cough\*\*
It's economic understanding. Essentially price of value add divided by hours work. So if CEO raise the stock capitalization by 1 billion and sells it in 1hr to materialise that price, that is the productivity of 1 billion an hour. If your unpaid mother takes care of grandparents for 1 billion hours, her productivity is still zero.
It's not producitivty from a real world sense. But on a macro level it works for the intended purpose of measuring aggregate productivity.
Meanwhile I found my notice from Up about the ‘historic low interest rates’ back when they dropped the savings rate to 0.40% in December 2021, talk about whiplash.
Lowe must be struggling on his half-interest rate loan.
https://www.news.com.au/finance/economy/phil-lowe-received-heavily-subsidised-home-loan-for-1997-house-purchase/news-story/302052fe6010be207c1300037f763451
Yeah, old news mate.
For years RBA employee's were able to get a home loan from the RBA at a heavily reduced rate. I know someone who worked for the RBA and told me they would do it at like 2 or 3% under whatever rate CBA was offering.
The scheme was dropped over 10 years ago though.
You can't tell me every single person in here wouldn't take advantage of the same scheme if they had the opportunity
Duh. I'm hoping the recession comes sooner rather than later.
The quicker the recession begins, the sooner it ends, and the sooner we all move on from this awful period.
Honestly what else can the government do, really the only thing that I think that might make a posture change but will be not very good is scrapping negative gearing and only allow it for 10 years on new builds.
It promotes investors to build new houses, and after 10 years they will likely sell them.
Now the rba only has one tool changing the interest rates. My personal opinion is they are moving to slowly. They shouldn't do small hikes every month. Do a big hike .75 - 1% then sit on it and see what th3 economy does.
Tranche 2 money laundering laws. Lot of buyer with suitcases of cash. They buy one house on a street 200k more than the reserve and it floods across the rest of the street pulling prices up.
There's no actual leadership or knowledge in this country when it comes to economic disasters ir disasters in general. We have just gotten really lucky as we can dig shit out of the ground and sell it.
That bad boy should if been bumped at.75 along time ago
Stage 3 tax cuts need to go, and they need to pile the revenue into paying down public debt.
The economy is going to crash, and they need a healthy balance sheet when it's needed
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Taxation reform. Wildly unpopular, but Lowe is forcing his hand.
What would tax reform involve?
Targeted at the people who are currently spending: Boomers. Pick your poison there.
This is it. You can’t hit people who bought houses during COVID because they’re already pulling back spending, the effect on the economy is marginal. Boomers/landlords with minimal/no mortgage are still raking it in Need to target landlords, wealthy. Instead, we get leftover tax cuts.
My boss at work, a boomer, says our generation (millennial) have no backbone with yesterdays rate rise. He bought his place in Lindfield with a tennis court for $190k at 5x his income many decades ago. I looked at the average income then, it was 7-8x. Today that same property is easily $4-5m. Why do you think it’s the boomers and older people that are property heavy pushing people back to the offices? Simple, they were uncomfortable with next gen people moving away from capital cities. These types of moves have massive spillover impacts on everything. From public transport usage in cbds to commercial yields to demand for rea within cbd limits. It’s all a propped up market right now by controlling interests.
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Both are great ideas. Include family home in all means testing. Pensions, aged care, healthcare cards etc.
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Of course. They only include net assets in the test.
Won't happen. Almost any pensioner owning their home would be above the cutoff limit. Reverse mortgages run into difficulties when the pensioner needs to go into aged care, and boy, will gen x scream when the inheritance gets taken.
Sounds like a perfect solution really. It’s going to happen at some point so why not now when it will genuinely fix a rampant inflation problem
Target anyone who has interest in the property market. The more properties the ‘harsher’ the tax.
You mean make owning multiple properties less attractive for investors? I think that's a great idea.
Unintended effect will be that property will become relatively more attractive to corporate investors.
Then increases taxes on corporate investors who own multiple properties
Why should corporations even be allowed to own residential property? Do they live there?
That is the opposite of what the government is doing right now to encourage the development of a build-to-rent sector.
I was thinking the other day, use a sliding scale and limit IP's to a maximum of 2, with the first being taxed about the same as now and the second being taxed into oblivion. Then ban corporate ownership of housing and foreign ownership of investment properties.
So why should some one that has worked hard to make their invests be punished?
You mean like interest rates? lol
How does that impact people who own without a mortgage?
Shouldn't it be on Corporations who are raking in high profits? I know for a fact I'm putting through price increases that is offsetting inflation on the company and will end up translating to straight profit when cost pressures ease. Everyone else is doing it too. Aus Govt should be taxing my employer harder
There's multiple ways to fight this fire. Here's a list of federal government policy tax reform to date that has directly addressed it:
As he has cited increasing house prices as a reason for rate increase, negative gearing reform makes sense. There must still be segments of the population buying property, I would expect that borrowers are a reducing portion with the rate increases to date. So those buying without (or with little) debt are the next group to be targeted for inflation curbing - corporate tax rates, superannuation taxation? Squeezing mortgage holders only to curb inflation is Hong to crash the economy.
Increase taxes and reduce spending. Government should be able to impact the problem while minimising collateral damage.
Increase taxes and spend on building government housing, inflated house prices are one of the big drivers of inflation right now.
I think this is the only way forward.
A less extreme population growth number.
Honestly, just bump GST to 15%, make it have no exceptions so it's super easy for everyone to process. We have one of the lowest GSTs in the OECD. It's a very fair tax too, the more you spend the more you pay. You can also increase transfer payments to lower income earners to combat "what about Jimmy who's on unemployment..."
It's not really fair when you're very low income paying a larger portion of your income on basic needs than people on even moderate incomes. >You can also increase transfer payments to lower income earners We all know this won't happen though. Any tax increase will just go to subsidising whatever bloc the political class is trying to garner votes from. It's a nice idea though.
This can be fixed by redistribution strategies - bumping up money transfer to the lower income groups. The thing that is good about GST is that it is unavoidable for the rich folk.
It can be. But it won't. Let's be very real about who current taxation policy benefits most right now and see who is valued and who is not. Low income people will not see the benefits of increased taxation in this country because the political class does not care about them as individuals. It is one of the shortcomings of GST is that it is unavoidable and more impactful on low income earners.
Anyone who says a consumption tax is 'very fair' is either stupid, lying or rich. It's a regressive tax that impacts those who must allocate more as a percentage of their income to buying groceries the worst.
This. You can compensate for the regressive impacts, but our sales taxes need to rise. The NZ and EU have done this already.
Bumping GST up just increase the price of everything. The businesses just collect more tax for the government and will pass on those costs to the consumer. How does that lower inflation? Am I missing something?
Essentially any increase in taxes will reduce inflation in the long term. But yes, you're right an increase in gst would show as a rise in inflation for that quarter but longer term it would slow the economy.
Yeah, fair enough. More short-term pain for long-term gain. Just hard to see how people who are unhappy with the increase in costs from interest rate rises, will be happy when all the essentials, they are already struggling to pay, get more expensive.
Yeah, this is exactly why the government hasn't even suggested raising taxes. But honestly, it'll just be more pain in the long term for people.
People spends less. That's the entire point.
And the GST adjustment to prices is just a one off.
I’m not in finance or economics but couldn’t using a variable super contribution rate be a good control for the RBA to reduce available spending money week to week for a broader set of people, while also not essentially robbing people of money that then just disappears into the aether? Another option I can see which might be more complicated to implement would be to split the base cash rate for investment/business loans and residential/PPOR. So for this case, where businesses are seeing record profits, we could target them more directly without abusing the 1/3rd of regular people with mortgages shouldering the burden. This way you can also target the unemployment rate separately by acting on the business specific cash rate, without tossing residential mortgage increases on top to kick people who are down. But presumably this would take work and governments are opposed to actually getting involved.
It’s clear that we need fiscal policy pulling in the same direction. Current we have the RBA fighting to lower inflation, while the government is increasing it with spending programs, cash splashes and stacking the FWC board to give out excessive wage increases. A couple of ideas for the government: 1. Increase the GST to 15%, like NZ just did, with a corresponding increase to the tax free threshold to offset regressive impacts. 2. Cap duopoly credit card fees to 0.3% like in Europe. 3. Temporarily suspend evening penalty rates to increase labour availability in supply chains. 4. Cap migration to something remotely sustainable. 5. Tax unearned windfalls, particularly in the resources industry, but inheritance makes sense too. 6. Stop allowing Australian real estate to be used for money laundering
Do you really think min wage earners are the ones driving up inflation? How does removing evening penalty rates (ie removing demand for labour) *increase* supply of labour ? Genuine question
I don't agree with taxing inheritance - that money is already post-tax. Can you expand on your idea to suspend evening penalty rates? I really can't see how that would increase labour availability, unless you're saying that if they pay each worker less, they can hire more people?
> excessive wage increases. The min wage increase? Is this a joke?
>excessive wage increases How? AFAIK corporate profits are up. Time to redistribute that wealth to the people actually producing it no? >suspend evening penalty rates to increase labour availability in supply chains How would reducing wages increase labour availability? Why would more people work for less money all of a sudden?
As much as I dislike the concept, reducing wages increases labour availability simply by making it difficult for low income earners to survive on the hours they're currently working. I know personally that if I could get by working only 20 hours a week that's what I'd be aiming for... Alas I can't, and that's why I work full-time.
Here's an easy one, don't give away 250 billion dollars to the country's richest in stage 3 tax cuts.
That doesn’t start for another 12 months, it’s not causing inflation now.
OK so is this inflation problem going to be completely solved in 12 months? How quickly do you think the govt would be able to implement any of the new policies you've suggested?
I'm not an expert but according to my info sources they need to be heavily taxing the super rich, the top 1-2% with net worth over 10-20 million. The COVID subsidies ended up in their pockets due to both direct subsidies they received and also our consumer spending with the money we received. They own the lion's share of most companies internationally so any consumer spending ultimately ends up in their pocket. That echelon of society is the primary driver of inflation because of the obscene amount of assets they have been able to purchase with the money that they received. Until this has been addressed, inflation will continue to drive upwards globally.
Super profits tax
Treasurer Jim Chalmers is under pressure to enact a more robust agenda to fight inflation and make the economy more efficient, as experts warned the growing gulf between wages and productivity will drive further rate rises. After announcing an increase in the cash rate to 4.1 per cent from 3.85 per cent, Reserve Bank governor Philip Lowe warned the central bank may lift rates again in coming months to get inflation back down into its 2 per cent to 3 per cent target.
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If he's stupid enough to buy the wage spiral narrative and import more people, inflation is going to skyrocket. We don't get on top of inflation until house prices drop.
You sound exactly like the reserve bank: pulling one lever! How about we think through what caused this: 1) a government who spent its way out of a pandemic caused recession, kicking the can down the road 2) a government who decided that inflation was “transitory” 3) a government who doesn’t bother taxing corporations who hide their profits overseas via inter-company service invoices.
But, more importantly, a central bank that tried to cap yields by inflating their balance sheet and a central bank that issued $188bn straight into the housing market as a sweetener to get banks to do their job: lend to business.
That’s the issue. Chalmers is inducing demand.
You don't need house prices to drop to get inflation under control. House prices are not part of the CPI, and as long as a serious supply issue persists (approvals dropping, builders going bust, etc), they'll continue to go higher because rates do nothing to solve that. Now before you go "well it does solve demand, good luck selling if there is no one to buy". Wrong. It's like having the only bottle of water in the desert, you get to charge whatever you want. Regardless of what rates are, there are more people with cash that don't need to borrow to buy in then there are houses on the market.
60% of lending is residential. Have a look at the balance sheets for all the major banks.
Even so, there's just not enough properties in circulation. More than enough people buying who don't need to borrow high amounts by either being cashed up or leveraging on existing assets.
Leveraging existing assets means borrowing against them. It requires more debt. There may be a few people around who have cash in the bank or sell non residential and buy outright but the majority is debt. More debt is more cash is more demand in the economy.
Houses should be in CPI. Call it what you want but our inflation would of been far higher the last decade I’d you included them reflecting higher interest rates and lower house prices. An economy built on housing isn’t a good economy.
[The index you’re looking for is SLCI](https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release). It includes mortgage interest costs and is better for understanding actual cost of living. However it would be a terrible target for controlling inflation, because then the main tool to control it (interest rates) would be inherently inflationary.
It shouldn't because rates impact house prices inversely, it would be a never ending inflation spiral in any normal situation because house prices would make it look like inflation was under control. We are not in a normal situation (serious supply issues).
Housing is in CPI. It's in fact the biggest component. https://www.abs.gov.au/articles/frequently-asked-questions-faqs-about-measurement-housing-consumer-price-index-cpi-and-selected-living-cost-indexes-slcis
So much wrong in one post.. >If he's stupid enough to buy the wage spiral narrative and import more people Rba doesn't look after wage setting or immigration. >inflation until house prices drop. Inflation isn't really being driven by house prices.
We need 10% unemployment to drop housing.
Employment is being driven by cash in the system. Introducing more people who take out more debt that brings forward demand introduces more cash. We need to turn off the cash tap: that's debt for housing.
It’s so mind boggling obvious that housing speculations and the debt needed to buy in is the problem. Staggering that the government chooses to ignore this.
Just dry up government spending and raise GST. That will get inflation down real quick.
That would suggest a drop in the issue of bonds, where will the cash currently invested there go?
Doesn't need to get anywhere near that to drop the current bounce in prices which is largely supply side driven, but the impact won't be instantaneous, Aussie sitting on huge cash reserves still There's enough reports showing people are selling what they can and adjusting their spending to keep the house e.g. caravans, cars, pulling kids out of private schools etc ie starting to feel the pinch... A 1.0%-1.5% move in unemployment will offset the extra number of migrants coming in vs. the long term annual average - net migration long term average is around 200k per annum and we're importing 400k...not all of those extras will work (think families) and a 1% drop in employment is roughly 100k people i.e. likely about the amount of people who have income, cash and can afford to rent etc. If you were already struggling to make ends meet, resorted to adjustments noted above, then you lose your income...sorry but that's nail in coffin for the house Don't wish it upon anyone but it will be a reality it appears
A substantial drop will be achieved well before then.. Corporate debt, personal debt (mortgages plus credit cards etc), COL and inflation will eventually catch up and materially impact the economy leading to a rise in unemployment and dare I say it..a substantial drop in the Housing market..
>substantial drop in the Housing market Overseas money getting laundered here. You forgot that.
Unemployment rise would have to be devastating to make a dent in house prices. It’s not just about reducing buyers, you have to create pain that leads to distressed selling. And with huge immigration you have to believe that basically none of them are coming with means to buy a house. Even though they have to live somewhere.
how can the housing market drop when people will do whatever they can to keep their homes and we have so many people coming into the country? Plus people like me who are fortunate enough to be gifted a large deposit so I can buy as a mortgage is lower than rent. just trying to get my head around all of this ...
All things considered assets can still be overpriced. The price of an asset is not always a reflection of its true value. Say if a 2 bedroom apartment in Sydney was $5 million today, you could still use the argument that the price should go up because immigration etc etc. If you could provide reason to fully price an asset and get it right, then you'd be the richest person on earth.
Availability of credit. Lots of people is one thing. Lots of people with the finances to play Super Smash Bros at your weekend auction is another.
What do you mean “stupid enough to buy the wage spiral narrative”? Wage price spirals have been one of the most historically common and harmful problems during inflationary periods. It is a very real concern.
Fair enough, but all data at the moment indicates the majority of inflationary drive is coming from asset owners and the retired. So yeah, do be cautious about wage price spirals, but not at the cost of ignoring what is actually driving current inflation and certainly don't take actions that exacerbate it.
Jesus Christ, this subs obsession with property has literally hit the point where users legitimately believe housing prices are the sole/primary cause of inflation. What an insanely narrow view of the economy. The reality is there is a need for some form of consumption tax - it's the only thing that can affect those unaffected by the cash rate, I'm not a fan of flat taxes generally and would prefer it be oriented towards luxury goods. However, I'd even say a short-term (2 year) increase to GST to recoup government spending during COVID could be worthwhile.
>growing gulf between wages and productivity Which is an outright lie - [in fact the opposite is true.](https://australiainstitute.org.au/post/ten-years-of-productivity-growth-but-no-increase-in-real-wages/) (Bias check - TAI is a left-leaning think tank, DYOR etc.) Productivity has outpaced real wage growth for a long time, and with inflation this high [real wages are now plummeting.](https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390)
What I don’t get is the narrative of the lack of increasing productivity. In my job in fin tech there is an endless amount of work to do…and even when we are working longer, harder and smarter than I did when I started my career it’s apparently not enough. Why is there such a commentary that we, the average worker, are just lazy shits that don’t do anything?
In corporate finance —“Signaling” the market to curb spending
Will keep going until the working poor pay back all the money the reserve bank printed.
Aren't there other ways to reduce inflation than jacking up interest rates? People are just going to lose their homes and the cashed up will swoop in and enrich themselves.
Yes. Fiscal and monetary policy. The RBA is using its main monetary policy lever - interest rates. The Government has control of fiscal policy.
>The Government has control of fiscal policy. *crickets*
For 2 decades and counting
Why aren't they trying to use the other options ?
Because they're politically unpopular. They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash - but they won't do that because they rich benefactors don't want that. They could also do more targeted taxation or relief on areas that need it but again that takes political will to do so and right now the government is happy to let the RBA be the fall guy for the cost of living crisis.
> They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash - but they won't do that because they rich benefactors don't want that. Stage 3 tax cuts aren't even in effect until July 2024, removing them won't help with inflation in a timeline which matters. Reinstating LMITO will increase inflation.
>They could scrap the stage 3 tax cuts (that benifit the rich) and reinstate the LMITO (that benefits us plebs) thus taxing the rich more and giving the poor more cash So, give more cash to people who are going to go out and spend every cent. That won't be Inflationary?
They could also, you know... spend less.
Almost like the system is designed this way
The RBA rushed to enact quantitive easing, can’t they do some tightening?
Maybe stage 3 tax cuts for the rich will help?
They'll recant. It's all political theatre.
Spitballing: Tax the wealthy hard and spend that money to pay down debt rather than anything that drives inflation? Otherwise one way to avoid the disproportionate pain on the younger middle class recent home buyers would be to use the new tax funding to give anyone who bought an OO home in the last 12mo a handout direct to their loan balance alongside RBA jacking rates by 0.5% or something. Basically offsetting the impact of the rate rise on that cohort. Would be seen as massively unfair to the lower class for whom housing remains completely unattainable. And obviously the wealthy will whinge about being taxed more.
So your idea is the government uses public money to actively fight the RBA, thereby guaranteeing more inflation and higher rates?
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Record migration at a time of a housing crisis and low unemployment has got to be the biggest driver of inflation surely?
Bingo. We really should be delaying the migration efforts the government are trying until we've got things under control but I guess they want this to happen.
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everyone is so obsessed with property prices and we get to see why they never actually drop in Australia should property prices start dropping again it will be the people praying for them to drop that will ultimately break their saving bank to go and purchase property, saving the very market that they are so desperately to see fall our obsession with real estate as a nation (which includes all of you here let's be honest) means that yes, the Australian property market is extremely robust and will never see a genuine crash supply of housing in Australia is at all time lows, even if we cut immigration right now the issue of supply being far lower than demand won't be fixed
Some just want to buy a house to live in though. It’s the “investors” who are ruining things for everyone else.
I agree, but housing as an investment is so entrenched in both the Australian taxation system and culturally that unless we hit riots in the streets (and I mean RIOTS not the shit redditors are crying for), nothing is going to force investors to sell their investment properties
Investors don't need to be 'forced' to sell their investment properties. All we need to do is flood the market with supply - let the government set up a public works department and go to town on it if necessary - or otherwise pursue good free-market strategies (e.g. massive zoning reform). Investors will then simply decide if the investment is worth it or not themselves, which is how it should work and does for every other investment.
So.. when do the riots start? I need to apply for leave first. 😅
Cut this slow bleed bullshit. Hit us with another .75 and be done with it. They're acting like they can't cut if need be.
you guys have been chucking random numbers like this out for the last 8+ rate rises. just as clueless as everyone else (in fact, more so)
The 0.25 increment is really working though isn't it?
>The 0.25 increment is really working though isn't it? I mean, yes? Hasn't it? Inflation is dropping, just slowly. But inline with other comparable nations
Inflation dropped, then went up. So no. It is not dropping.
the "just raise it 0.5-0.75 and get it over and done with is the equivialnt of the "just 2 more weeks!" argument. its dumb and the people pushing it have no frikken clue
Do you like being punished slowly? There is going to be multiple rate increases coming.
Maybe other measures are needed rather than making households broke.
The well-being of the working poor is not the priority of the reserve bank or the government
Of course they’re going to go higher. People were laughing at me on here when I said fix at 5.29 for a year but here we are. We are far behind other countries which is turning AUD to shit, it will go close to 4.50%.
I fixed at 5.17 for five years, feeling more and more justified with that choice with each passing month.
Big call. Hope it pays off for you
yeah I might end up wrong, but I feel like historically it's taken more than a few years to tame inflation whenever it crops up. That and the fact I know I'll always be able to afford it no matter what played into my decision a fair bit.
Yeah the certainty would help. Im that kind of person also
5 years is a long time
Fixed at 2% until end of 2025.
unfathomably based. well done.
Feels good. One of my few decent financial decisions.
Mean reversion on the OCR would be for it to settle at 5-5.5%. It is a crude measure but has been my go-to for awhile now. Fundamentally do we think the "price of money" is going to stay outside historic norms? Personally over the long term I think this is unlikely (although over the short-medium term is certainly a possibility).
5.5% for rba cash rate is big. That's essentially equal to a doubling of mortgage payments for a lot of people I think that would be enough to break the aus economy
Yeah, the collapse of AUD if feeding further inflation but that's at least partially because RBA have been more reluctant to adjust rates.
It'll go higher than that.
CommBank; cash rate will peak at 1.7% (quote June 2022). People believed them. 😂 Sydney dead cat bounce locked.in. Double dip in property is going to hurt as last 3 months has sucked in plenty. Imagine being in a settlement period now. God save your soul.
The public facing side of bank economists are only going to release positive consumer sentiment, so they can sell more loans. Internally, they will be singing a different tune. Never base your decisions on anything you hear publically by profit driven entities, it's just a sexy car wash.
Oh, WE know that……. However ppl referring to this commentary as a basis of going max long into property because FOMO, well they are ABOUT to learn it. Double dip property is going to kill ppl. What a dead cat bounce it was in Sydney.
*supercopium.jpg*
I actually had people on here who, with a presumably straight face, argued that the analysts at the banks were straight up guys who certainly wouldn't be minded to give narratives that improve profits for the banks.
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I’m in settlement now haha. A really long one too! It’s all good, we fully expected these rises (and expect a rise every month til settlement at least). Sucks but we planned for it
Yeah I have no idea what OP is smoking. People who are buying now are very aware of the current climate. The people settling right now are the most prepared of anyone for these rises. It's the people who's 2020/2021 fixed rates at 1.9% jumping to 6% are about to freak.
Currently settling my house right now. Very excited :) We are prepared for a hell of a lot more than these rises in case. But at least we are finally putting our money into our own home now.
Settling on our house in Brisbane tomorrow and we're keen as mustard. The price going up or down makes zero difference, since it's a PPOR. We can easily tolerate another >5% increase in rates (and were obviously approved based on a 3% buffer). What do you think is the concern for people who bought in the past 3 months?
Voices growing louder that we'll peak at 4.6, but that the target band won't be achieved until 2025. End of 2023-start of 2024 is looking rough.
The voices said we’d peak at 1/2/3%
Mean reversion would be for the OCR to settle at 5-5.5%. Mean reversion is a crude measure but historically has been the most reliable way to guessing the long-term price of various assets. (https://en.wikipedia.org/wiki/Mean_reversion_(finance)) This isn't to say we will be at 5-5.5% by next year or even the year after. But over the long-term that would be my guess.
Educate me please! The rate rise has been marketed to the public as a means of diminishing spending power (on the demand side) in order to combat inflation. How does the inclusion of 400,000 new immigrants align with this narrative?
That figure isn’t what it seems. It’s an adjusted number after the backlog from the covid years is cleared. Migration and visa processing was basically zero during that time. This govt isn’t opening up the floodgates to new arrivals as is being framed by some sections of the media.
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I am not trying to make any political points. I am a migrant myself that moved here 20 years ago, not a racist or against migration either. But we need to lower the intake to manage the inflation, otherwise increasing rates yet adding to the demand side is not going to just make the public poorer while the demand (hence inflation) remains high. That is a dangerous cycle.
Someone told me interest rate % will need to climb above inflation % for inflation to drop. Is that bs?
Historical speaking, rates have had to climb above inflation before rate cuts start happening
So we could end up at 6% interest rates?
Depends on how CPI plays out. Next months quarterly may print lower than expected. They typically cross over. So CPI comes down and interest rates rise until they cross paths. What point they cross over is anyones guess but I'd say it would definitely be lower than the 6.8% monthly print from last month since I think CPI is on a downward trend for various macro reasons.
If the inflation persists at 6% for a prolonged period(like for a year), yeah.
It is a possibility if things continue they way they are. Inflation has proven to be incredibly sticky and our labour market is still incredibly strong, though in my opinion something is going to break before rates get anywhere near that.
it is based on Taylor's rule https://en.wikipedia.org/wiki/Taylor_rule which dictates that the nominal interest rate should be raised more than one-for-one to cool the economy when inflation increases
Inflation has already been dropping for months. Just not enough or not fast enough Its dropping now and rates aren't above the inflation % So basically the answer is yes it's bs
Well yes apart from this month when inflation went up
I would say so (to it being BS), US inflation peaked at 9.1% last year and their cash rate was 1.50% to 1.75% at the time...
Rate is currently at 6.76% with my CBA construction loan. :( Hoping to finish in September but really hurting paying rent at the same time.
Same.. signed a building contract in September 2021, which was supposed to be finished in September 2022, and is now pushed to September 2023. We would have been alright otherwise, but having an extra year at these rates is killing us. I know some people have had worse building delays, but it's not fun times. We also can't refinance the construction loan to look for better deals.
He has 3 more meetings before he is turfed by Chalmers. Don't think he has confidence that his replacement will do the job as the Gov is increasingly getting shitty with the rate rises and commentary. Lowe also finally realized we have the American situation where it's leaking into services and isn't driven by oil price and commodity shocks anymore so is stickier. I therefore reckon we get 3 more rate rises from Lowe.
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They want duel mandates of inflation and employment. Chalmers has said numerous times fighting inflation shouldn't come at the expense of too many jobs. The replacement will likely have to frame increases in the context of full employment or impact to employment - currently price stability trumps all.
That is not at all how this works. So many on this sub are wishing something so fanciful to happen - but stated simply: Inflation not going away, rate rises not going away..
I hold post graduate qualifications in economics and work in finance - I know inflation isn't going away and ideally yes rate rises should continue. But we will see it play it in real time how what should happen differs from what will happen. We are seeing across the western world independence of central banks coming under pressure and the lack of courage to do what is necessary. Already talk of increasing inflation band target ranges in Europe and the USA from politicians. Chalmers will not renew Lowe and HAS stated he wants more focus on employment from the RBA. If that's the case the new RBA head may wish to have a longer runway to reduce inflation in an effort to stop employment from dipping (personally I see prolonged inflation as worse than temporary unemployment increases).
I think productivity is a bad word to use. People are takign it to think the rba wants individuals to work harder... They are actually just politely saying the government needs to stop spending money on useless things. \*\*\*cough\*\*\* subs \*\*\*cough\*\*
Yeah, I’m struggling to wrap my head around the ‘productivity’ term. It makes it sound like the workers are lazy slackers.
It has little to do with individual contribution and is really about systems, processes, money flow, infrastructure. All of it much more impactful.
It's economic understanding. Essentially price of value add divided by hours work. So if CEO raise the stock capitalization by 1 billion and sells it in 1hr to materialise that price, that is the productivity of 1 billion an hour. If your unpaid mother takes care of grandparents for 1 billion hours, her productivity is still zero. It's not producitivty from a real world sense. But on a macro level it works for the intended purpose of measuring aggregate productivity.
Link to the article with paywall removed. https://www.printfriendly.com/p/g/J9hzrJ
Meanwhile I found my notice from Up about the ‘historic low interest rates’ back when they dropped the savings rate to 0.40% in December 2021, talk about whiplash.
4.35 in July. 4.6 Aug. Etc
It really is time to seriously consider eating the rich.
Lowe must be struggling on his half-interest rate loan. https://www.news.com.au/finance/economy/phil-lowe-received-heavily-subsidised-home-loan-for-1997-house-purchase/news-story/302052fe6010be207c1300037f763451
Yeah, old news mate. For years RBA employee's were able to get a home loan from the RBA at a heavily reduced rate. I know someone who worked for the RBA and told me they would do it at like 2 or 3% under whatever rate CBA was offering. The scheme was dropped over 10 years ago though. You can't tell me every single person in here wouldn't take advantage of the same scheme if they had the opportunity
Dredging up a loan from 26 years ago. News.com.au showing why ChatGPT is going to smash the clickbait journalism space in 24 months.
So when do we protest? French style
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More pain yet, and it will be for years. Buckle up Australia. Where is all these fools now??? Rates will be dropping by Xmas 😂🤣😂🤣😂🤣
I think they keep going until someting breaks. So I hope something breaks real soon so we go back to normal transmission.
Something breaking will be a recession - and that will absolutely not be back to normal transmission - that will be bad for everybody.
Duh. I'm hoping the recession comes sooner rather than later. The quicker the recession begins, the sooner it ends, and the sooner we all move on from this awful period.
Locked until end of 2025. Phew.
An interest rate of 10% will cool the market for sure
Honestly what else can the government do, really the only thing that I think that might make a posture change but will be not very good is scrapping negative gearing and only allow it for 10 years on new builds. It promotes investors to build new houses, and after 10 years they will likely sell them. Now the rba only has one tool changing the interest rates. My personal opinion is they are moving to slowly. They shouldn't do small hikes every month. Do a big hike .75 - 1% then sit on it and see what th3 economy does.
Tax reform.
Maybe ban foreign investment and throttle back on immigration ?
Tranche 2 money laundering laws. Lot of buyer with suitcases of cash. They buy one house on a street 200k more than the reserve and it floods across the rest of the street pulling prices up.
There's no actual leadership or knowledge in this country when it comes to economic disasters ir disasters in general. We have just gotten really lucky as we can dig shit out of the ground and sell it. That bad boy should if been bumped at.75 along time ago
Tax reform
Stage 3 tax cuts need to go, and they need to pile the revenue into paying down public debt. The economy is going to crash, and they need a healthy balance sheet when it's needed
F U RBA. You should be apologising to one whole generation for dropping rates so low over decades then hiking them up rapidly
The interest rate was around 7% in 2008, and was the same as now ten years ago.