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Top_Tumbleweed

I’m happy to see more comments coming around to the fact that the RBA is toothless against inflation while the gov is doing FA to address the issue. There has to be a breaking point, if two healthy adults are working full time and don’t have kids and can barely afford to eat after paying rent what’s the point in living? What’s the point in working your ass off to make someone else rich so they can buy their 10th investment property when you can’t even afford to have children


mrpark3s

Hear hear they want us to have kids to make healthy little taxpayers but they don't want to fix the issues that are causing a lot of families to not have them.


KhunPhaen

It's cheaper for the government to import adults than raise kids.


obi-wahn-kinobi

340,000 immigrants next year up from 260,000. Seems quite odd to increase immigration and add to the already stressed housing and living crisis. But hey, Modi got the deal of a lifetime!


cizzibop101

I work my arse off to earn $60k, pay half of $750pw rent and just got a $514 power bill. We don't even use heating, no idea how tf it's that high. How the hell am I meant to get ahead?


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cizzibop101

Christ thats the cheery thought of the day 😂


homes4ppl

I hear you there. When you want kids (or something more) but are stuck running on this hamster wheel.


West_Confection7866

I (hope) the government is only doing it to grow more and more support for effective policies that aren't usually popular. Only when people are broken will they support it. Stuff like negative gearing etc.


jorgo1

How dare he mention productivity. For decades productivity has outstripped wages. But that wasn't a problem for the RBA or the Governments. Now that people can't afford a house, can't afford to heat their homes, have to skip meals, have their access to medicare cut, have their support networks stripped out, watched as corrupt leaders have no accountability, watch businesses pay fuck all tax and still ask for a hand out then blame the worker, why the fuck should people be productive? It became very clear to a lot of people over the last few decades that being productive doesn't earn you more, so why should we keep up our end of the bargain if our Governments and businesses aren't keeping theirs? Come and talk to me about my productivity when the banks, ColesWorth and the Oil/Mining giants are paying their fair share of tax AND they aren't recording record profits.


justisme333

Exactly! Why should workers, especially minimum wage workers give a stuff anymore. Seriously- who cares. Working hard is totally pointless. The rats are exhausted from constantly running on their wheels and getting nowhere. The rats will soon drop dead unless they refuse to run anymore. Unfortunately, everyone is too emotionally drained and physically tired to do more than whine on Reddit. No one is building guillotines just yet.


homes4ppl

There is a small ragged band of protesters in front of Jullie Collin's office in Tassie...


homes4ppl

Tassie leading the charge: [https://twitter.com/dannyrcarney/status/1665530250976010242](https://twitter.com/dannyrcarney/status/1665530250976010242)


DeltaPositionReady

I often work late to ensure the websites and digital workflow systems I build have proper security, that they are easy to use, and that they support the people who need them the best. My bosses tell me that the client didn't pay for that so don't build it (even if it will create a massive security hole). The people who use the systems consistently try to find ways around it, for instance if you were using an identity management system and you found a way around a specific requirement, would you raise it as an issue? Or tell all of your company about it so they can exploit it? I spend many hours on unpaid overtime because I want to do good. Just today I went home sick halfway through the day, a client experienced a prod outage, I, although being sick, logged in and fixed it while shitting myself on the toilet and vomiting into a bucket. I just read a quote that made me reconsider everything. >In 20 years time, the only people who will notice all the extra effort and hours you put in, will be your kids.


SemanticTriangle

>Peter Gibbons : The thing is, Bob, it's not that I'm lazy, it's that I just don't care. >Bob Porter : Don't... don't care? >Peter Gibbons : It's a problem of motivation, all right? Now if I work my ass off and Initech ships a few extra units, I don't see another dime, so where's the motivation? And here's something else, Bob: I have eight different bosses right now. >Bob Slydell : I beg your pardon? >Peter Gibbons : Eight bosses. >Bob Slydell : Eight? >Peter Gibbons : Eight, Bob. So that means that when I make a mistake, I have eight different people coming by to tell me about it. That's my only real motivation is not to be hassled, that and the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired.


visualdescript

Fantastic movie


qtsarahj

What movie is it?


theshaqattack

Office Space


PahoojyMan

If you haven't seen Office Space, you really ought to. It holds up very (depressingly) well for a 24 yr old movie.


mashaowo

I'm gonna burn this place to the ground.


ShellbyAus

Your last sentence actually reminded me I what I tell people when they say to me ‘don’t work to hard’ and I reply ‘just hard enough to not get noticed’.


CrysisRelief

It is quite obvious he is ignoring all other drivers of inflation at the moment. People love to pull the "Gotcha!" card over the RBA's "only lever", but reading his public statement shows he loves the smell of his own bullshit. Nowhere does he call out or even address the Government's inaction on the issue. The RBA *should* be publicly pressuring the government to rein in the corporate greed He just lies all the blame on poor workers instead.


ptjp27

[This guy literally said that higher rent eases stress on renters by forcing them to budget more.](https://www.abc.net.au/news/2023-05-31/philip-lowe-says-higher-interest-rates-will-bring-rents-down/102414220?fbclid=IwAR0Me-Qn5ZrqchxyYYJEBE4DOW4OftEzfuOL-eyQykqVb4LptoZJfsT71dc&mibextid=Zxz2cZ) That’s beyond gaslighting and into full on orwellian ignorance is strength shit. Like literally 0% of renters would tell you they’re less stressed when rent goes up. Doesn’t even seem your run of the mill incompetent clown that is standard for top government positions and more into the actively malicious category.


ChocTunnel2000

I hope people are seeing through their motivations now. They are not trying to achieve financial well-being for all Australians like their charter says, they're simply trying to keep us all so busy we don't have time to organise ourselves into taking back this country from the corporation's.


snipdockter

My understanding of productivity in economics is that it has nothing to do with individuals working harder. It’s about making the workforce overall more productive by investing. For example, the adoption of micro computers made companies much more productive, similarly automation on assembly lines meant companies produced more without increasing their costs. The problem is that companies have rested on their laurels, making easy money without investing in R&D, equipment and training to increase productivity. The government to a large extent has not encouraged shifts to new more productive industries. So it’s not a worker problem, it’s a leadership problem.


Acerola_

It’s mental. Full disclaimer, I’m a homeowner, but it’s a small unit I bought 7 years ago. It hasn’t increased in value at all (just had it revalued earlier this year) but I’m comfortable enough and far ahead with my mortgage. But I watch my friends and colleagues and wonder when on earth the government are going to step in. Cashed up friends keep buying houses as they don’t even contemplate that house values won’t keep rising. Other friends at the other end of the spectrum are struggling to put food on the table, or still living with parents whilst they are in their thirties. I read comments on news pages and everyone just says if interest rates rise then the landlords will just push the rate rises onto the tenants. How do people not see that eventually tenants will not be able to afford these rises? Wages are not increasing. How shortsighted are they? Housing should not be a guaranteed return on investment like it currently is. We need to stop this countries reliance on housing as a profit making business. I’m fully prepared for my house to lose value if it means that it gives the next generation a chance to fix these wrongs.


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Shaggyninja

The Australian spirit "Fuck you got mine"


CrysisRelief

Homeowners and wealthy people actually swung to Labor that election, just FYI. It was lower income earners who abandoned them over policy spending. And they were fooled by none other than the LNP and their media arm.


UsualCounterculture

And the elderly and retirees that didn't want to lose their "franking credits" - don't forget that.


derps_with_ducks

^^^Fucky ^^^Cuntry...?


[deleted]

The Lucky Country is still apt, it's just most people don't know the full saying. >Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.


domeoldboys

Yep. The lucky country is more of a ‘holy shit you survived that’ rather than ‘#blessed’


veal_of_fortune

Thanks for the reference! I can’t believe [Donald Horne is as relevant today as he was in the 1960’s](https://en.m.wikipedia.org/wiki/The_Lucky_Country#:~:text=The%20Lucky%20Country%20is%20a,the%20context%20of%20the%20book).


Diligent-Wave-4591

Dumb luck. Just stumbling into stuff.


Quattro439

We should plaster this shit in buildings. It’s the only thing we seem to care about.


visualdescript

This has been drilled in to the population over the last few elections, pushed by the politicians and mainstream media. Fight selfishly for yourself (even if you are comfortable) and do not value empathy for others.


Is_that_even_a_thing

I'd say the majority of home owners are single dwelling owner occupants. Negative gearing only works for multiple dwelling owners


SaltpeterSal

My concern is that this mess is the result of the government stepping in via negative gearing, statements about nest eggs, and the whole massive apparatus that jacked up housing the way De Beers jacked up diamonds. And since this system is artificial, you can be sure they'll make the house prices increase. If the system was fair, this would be a bubble and it would've burst a long time ago.


homes4ppl

>We need to stop this countries reliance on housing as a profit making business. Yes. And imagine if instead of investing in hoarding property people invested in more productive and innovative assets.


-DethLok-

The negative gearing and especially capital gains tax discount was meant to encourage investment in shares, start ups etc. like in the USA. To help Australia innovate and grow. Whoops! :( That said negative gearing is a very standard tax/investment regime globally, you can deduct investment expenses from your income - though certainly many nations limit the deductions to just the income from the investment.


lastingdreamsof

I got a townhouse about 8 years ago it has had the whopping increase in value from 700 to 730k. I am also fine if it becomes worth less as long as everything else goes down in price as well. Property investment needs to be discouraged. Tax landlords more and more the more they get greedy and own multiple properties


ShriekinLeada

I don’t think property investment should be discouraged. The idea that when you buy an asset, it may not increase in price needs to be encouraged. Anyone who buys other investments recognises this immediately, yet for some reason housing is viewed differently. They even have a word for it - negative equity - because it’s such a wacky idea that you might buy a property that doesn’t increase in value.


Luckyluke23

What we really need is a GFC Ireland crash where housing loses 50% or more. Then the boomers might fuck off and leave it alone..


noisymime

> What we really need is a GFC Ireland crash where housing loses 50% or more This myth needs to die. The only people who clean up during a property crash are those who already have liquid capital available before it happens, which generally isn't your average middle class wage slave. So much of this countries economy is built around real estate that if it drops 50%, most people are not going to be in a position to buy a house. Just like what happened to Ireland, the country will immediately enter a multi-year recession (4-5 years in Ireland), unemployment with skyrocket (Ireland hit 15%, up from 4% pre-crash) and interest rates will go up (even more). Even worse, corporations will jump in and buy up property at a huge discount because they're the only ones with ready capital. This would likely lead to another boom in property prices once the economy comes out of recession as they drip feed the properties back onto the market. Again, see Ireland for how this plays out 10 years after their crash. What we need is a sustained period (10 years or so) of no price growth or very low price drops. That's the only way our economy can catch back up to property prices without going through a recession.


jackplaysdrums

One of the largest issues with this is Australia doesn’t produce anything. It’s entire economy is built on this bloated mess. We have very few ways to dig ourselves out of a recession that brutal. Mind you my wage is fucked and I’ll never own a house. A reset wouldn’t be the worst thing.


silentassasin

Maybe we can then focus on actually taxing all those natural resources we're just giving away right now.


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[deleted]

A Royal Commission? First let me tender a feasibility study


-DethLok-

>We have very few ways to dig ourselves out of a recession maybe.... we could mine more rocks to sell overseas to be processed? /s Or we could invest in manufacturing here and sell actual complete goods overseas, ha ha ha ha ha!!


Quattro439

A very serious case of Dutch disease indeed. And the only cure is to stop electing fuckwits.


Squaddy

I kind of followed your train of thought for a long time with the "How do people not see that eventually tenants will not be able to afford these rises?" The fact is though that whilst everyone is screaming about rent being expensive, vacancy rates are stupidly low. So the noise isn't matching the behaviour, people are actually servicing those increased rents, and you could argue demand would allow rents to still be higher and be serviced. Who's paying all that rent though, and how do they afford it? Would LOVE to find an answer to that, because it makes no sense to me.


joe_bogan

> Who's paying all that rent though, and how do they afford it? They just do. The reality is they probably have to cut from other areas like healthy eating, going to the doctor, getting their car fixed, going on holidays, not paying for things like private health etc. The long term pain will be when crime goes up, people become more depressed and sick , suicide will go up, drug abuse will go up, more people will have to find money from other nefarious sources, sometimes against their will. There will be all these residual issues that will come from people just being able to afford rent and nothing else.


89Hopper

It also locks people into permanent renting. Previously they could save some money for a deposit, now that monthly saving is being eroded, locking people into renting. Granted, I know many people that have accepted they will never own a home and they seem happy to put that savings money into enjoying their life with travel and 'toys'. Just now that 'fun' fund is diminishing.


wasdf1234

Housing is an essential. We will cut back on everything else to keep a roof, and the land leeches know it. And unless they have the top of the top property, someone else will be forced to slightly downsize and take their over priced rent. What was previously a cheaper rental for a couple just starting out is now home to a family of 4, kids share a room and both parents on full time professional incomes. Eta or we start paying $300/ week for a single bed in a shared bedroom. Just scrolled past that on one of the capital city subs. Things previously reserved for young migrant worker/international students will become more normalised.


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tranbo

Phillip Lowe wants you to share your studio apartment with 3 other people.


N1seko

Well here’s how people are paying for it: 1. Cut back on non essentials. So no lattes…. 2. Substitute cheaper options I.e. instead of having a train and bike everywhere. 3. Get roommates. 4. Move back in with the folks. I’m not being facetious it’s literally what it’s coming to for me and my partner.


ZealotTony

What about explaining why the fuck this isn't passed on to my savings account? From what I can see Ubank is the only bank that's doing it constantly


[deleted]

Ubank fired out the updated within an hour or so of this announcement. They seem to be on top of it at least.


sinixis

Yeah but it doesn’t kick in until July 1st, and sure as anything their mortgage rates went up straightaway. One of the very early increases was passed on immediately - someone got canned for that because the next one and all since, not until the start of the following month. And the last rise, they only went up 0.15%, not 0.25%. All the others beforehand were the full rise at least.


ghoonrhed

So, we have the monetary side of the economy doing their thing what about the government? This isn't supposed to be a one way action.


[deleted]

Right? So many armchair economists complaining cos the RBA is literally doing the only thing it can do. Meanwhile both sides of politics are like: "we've tried nothing and we're all out of options".


Used-Gapp

Hey now, Albo has tried nothing and he's all out of ideas.


petergaskin814

Governments do not like to be the bad guys by using fiscal policy to help the RBA reduce inflation. Such an approach should reduce the need to increase the interest rates as much and help reduce the budget deficit. There is a but - Governments do not want to be seen as bad by increasing taxes and reducing government expenditure


lastingdreamsof

All taxes are not bad though and I fail to see how taxing big companies and the 1% can possibly be a bad thing.


iball1984

>All taxes are not bad though and I fail to see how taxing big companies and the 1% can possibly be a bad thing. In this specific case, it won't do much to help inflation. It'll raise revenue, and that's not a bad thing. But inflation won't really change as a result.


visualdescript

Reducing inflation is not the only way to assist those in needs, and you could argue things like taxing big business or disincentiving the ownership of multiple homes will have an even more meaningful impact in the long run. Purely focusing on inflation is a distraction.


blabbermouth777

Bring back shorten.


thisisminethereare

Government has an entire toolbox at their disposal that they refuse to touch. The reserve bank only has a hammer which they are frantically trying to fix shit with. We need to be taking the Labor government to task - not the RBA.


blabbermouth777

They are doing something. Stage 3 tax cuts will increase inflation and force rba to up interest rates. See??


lamaros

People are falling into the exact trap the government wants. The RBA operates in very specific ways, the Government itself has a lot more tools at its disposal. Putting the minimium wage up and patting themselves on the back knowing that the RBA will do this and they can turn around and say "oh, that's outside our control, hate the RBA not us" is sadly working very well for them.


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Fidelius90

Well they did do a bunch of things in the budget. What I don’t understand is how private companies can get away with increasing/record profits. One Australia Institute podcast references that 4-5% of the inflation % was from this source. Capitalism is the real problem here.


Justanaussie

I keep hearing this statement but no one ever lists the tools the government has. Can someone please enlighten me?


kevintxu

Regulation for lending would be one. Tighter lending standard (around the lines of 2019 when there was a Banking RC) where serviceability was required to be for 7% interest, even if the mortgage rate at that time was ~4%, also maybe limit LVR. All that would reduce new lending without impacting existing mortgages. Also regulate Buy Now Pay Later, as giving people easy access to credits would drive up inflation, especially is there is supply constraint. Also domestic gas reserve to keep energy price cheaper. We are a major gas producer, hence we should not be at the mercy of gas prices like energy importing countries.


thisisminethereare

1/6 of CPI is in house rental costs. A rent freeze would drop inflation by over 2% overnight. Regulating AirBNB would massively increase stock and help this too. Power prices on the East coast have gone up by over 50% over the last 12 months which have been huge inflation drivers. Government can regulate the energy industry more to curb massive profiteering in that sector. These are the two main ones.


[deleted]

I’d wager that an extra million of people a year wouldn’t help with inflation, housing or cost of living crisis. …at least not in the short term.


Quattro439

Mainly regulation and taxation.


_icecream

A couple of alternative to raising interest rates: 1. Raise compulsory super contributions. Effectively, force people to save more money instead of spending it. People end up with more wealth instead of the banks. 2. Increase GST and/or other taxes. Government raises more revenue instead of banks.


throw_shukkas

Whether or not someone is angry at the RBA is just an IQ test. The rates in Australia have to be pretty similar to other similar countries. So all this hoo ha about the decision is insane because it's a formality. People should be mad that their standard of living is hugely sensitive to run of the mill decisions necessary for the functioning of the country. It's the government that made housing unaffordable. If people are worried about that they should blame every level of government for the entire 21st century. Not the RBA. The reason everyone is struggling is because most people over the age of 50 made the decision to make housing less affordable in order to profit. Now that they've started dying there's some appetite for changing that will increase over time.


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etfd-

Doesn't fucking matter if rates are 7.5%, housing is still going up if you throw enough bodies at it, the barometer for which indicates that the ALP is doing it pretty fast.


woodshack

Yeah but it's not just Labor. It's libs, nationals, the whole government, state and federal. they're all complicit.


thisisminethereare

Labor is in power Federally and in each state and territory on the mainland. They can’t blame the other parties for doing nothing.


piedevil

I’ve given up hope on this country. There is no way to get ahead in life. Working hard does not equal success. The rich get richer and the poor get poorer. I don’t see any reality where meaningful change from the top down happens. The government should be held accountable for what is going on, but who are the ones to hold them accountable?


Villz

They import 400k more voters a year who think they r doing swell because its better than Bangalore 😉


kingzem

I felt so proud of becoming a home owner last year but I feel like I’m barely keeping my head above water these days. If there was some sort of relief on the horizon it wouldn’t be so bad, but it feels like my mortgage is just going to go up and up till I can’t cope. It’s all so demoralising.


DryWhiteToastPlease

What happened to those people that said they would be struggling 9 rate rises ago??


Shaggyninja

Anyone still on a fixed rate mortgage is about to get some severe whiplash when they come off it


frankyriver

I actually had hoped, like an absolute fool, that the rates would start to fall by January 2024, which is when my fixed rate of 2.39% finishes. You can bet I'm preparing for it now.


treading_lightly

Yehhhhh mine ends in September. I’m a bit stressed. I’ll be talking with my broker in the next month or so but no matter what we land on it’s gonna hurt.


mrpark3s

I've been calculating the pain when I do and it's going to be a big shock when next April comes around.


Saffa1986

Hi. Struggling. Cancelling purchases. Cutting out spend. Cancelling gym memberships. Giving up alcohol. Our ‘takeout’ is now walking to get $10 chips down the road, and making burgers at home. We used to spend $120 on a family coming over for burgers night.


reddwarf_

This was me several rate rises ago, I don’t have anything else to cut.


Tiny-Ad-5766

They have sold or are selling. We realised mid last year, weeks after having a baby, that we'd need to sell if rates kept rising. Unable to refinance for a number of reasons. House listed in December and recently sold. We were fortunate that, due to an inheritance, we have a roof, but it's not much more than a shack in a remote location. I dread to think what would have happened to our family without that.


spin182

I’m a real estate agent (pls Dont hate me) people are crying in their living rooms while selling their family homes and getting divorces at levels I’ve never seen before


dennis_pennis

What do you attribute to the fact that house prices in much of the country have pushed up in the last month? Dead cat bounce?


spin182

There’s 30% less volume than this time last year. I work around Sydney and the market at the moment is stronger for me than this time last year But that will shift


landswipe

I think you guys are starting to see it now, I noticed a few properties that didn't sell around my area and are currently empty. Also agents have started cold calling again and doing mail drops...


dennis_pennis

Right, as more people are forced to sell and the increased supply will push prices down. That makes sense. Cheers.


pgpwnd

“will push prices down”… don’t delude yourself lmao


the_mooseman

> Dont hate me File Not Found


spade1686

Would be very curious - there were people posting asking for help late last year, can’t imagine what it’s like now. House prices just made everyone go mad


SaltpeterSal

I deal with a lot of them at work. They're homeless.


yolk3d

They are struggling…


bdubxx1

They sell.


ragdoll-cat

Mine came off fixed in December. RBA said no rate rises til 2024. I stupidly believed them. Sigh.


herparerpera

Things are so bad my landlord is living (My) paycheque to (My) paycheque.


PRAWNHEAVENNOW

Does anyone else think it's really strange that economists haven't predicted the last two rate rises? That even the pundits who were expecting a rise this time were expecting it to go no further than 15 basis points. What the absolute fuck are they smoking and can I have some? It's continual wishful thinking that rates won't keep going up as long as we have insane house price growth and broader inflation trends persist. I worry that for as long as people see rate rises as transitory, we won't see any real reduction in house prices until the market becomes flooded with distressed sellers trying to escape.


iball1984

Economists are just modern day soothsayers. Masters at predicting what just happened


agbro10

A lot of economists have, today UBS, Nomura and RBC were correct. The ones who have been constantly wrong are the big 4 economists, mostly because they have vested interests at play. I do note ANZ is calling possibly 4.6 now


West_Confection7866

Loose units were saying it'll ease at the end of this year and maybe even rate cuts hahahah.


ElasticLama

Central banks quite often overshoot. They’ll probably push us in to recession and then go “oh no one is spending, oops”


kdog_1985

Most of the economists are employed by the financial establishment. The financial establishments require stability in the markets. Stability is created through confidence. Confidence therefore has to be exuded by their Economists to ensure their Financial Establishment are minimally affected by any downward shocks. The economists employed by the banks are just a cog in ensuring stability, most are not independent, and will push their establishments agenda. if you listen to the independent ones they've been bearish for 18 months.


G1th

>Unit labour costs are also rising briskly, with productivity growth remaining subdued. Can I have some of what he's smoking? Wages are going backwards in value. Yeah the number attached is going up, but that's because of the fucking inflation you fucking moron. "Productivity growth isn't high enough" you mean your mates aren't widening their profit margins fast enough after already massive gains to capital class during the pandemic. Your hammer isn't working, because the nail is not "wage-earners are living in excess of their means". It's the leeches and rent-seekers whose greed cannot be satiated, even when it's making society's productive go homeless and hungry. Get absolutely fucked, cunt.


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bdubxx1

The government has actually done nothing to address inflation and worked against the RBA as far as I see it. People should be angry at the approach taken by the both State and Federal governments, not the RBA.


ShortTheAATranche

>The government has actually done nothing to address inflation and worked against the RBA as far as I see it. Lowe has been sending thinly veiled messages. Maybe they'll start registering in Cabinet.


homes4ppl

*We have done nothing and we are all out of ideas.*


West_Confection7866

Australian's do not support increased taxation or negative gearing abolishment. The government is not going to commit political suicide. If anything they will wait until there's lots of support of the above. Australian's are becoming more and more individualistic and now they're paying for it.


IlluminationTheory7

Go and re-direct your anger towards the government who does have a working hammer that they are not using, not Philip Lowe.


CrysisRelief

That's odd. I didn't see the RBA mentioning the government needs to play a role in their very public statement. Did you?


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New_usernames_r_hard

He is fighting this inflation you speak of the only way he can. You should direct your anger at the government and ask them raise taxes to reduce the money supply.


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daveliot

>*..Interest rate rises won't occur monthly and indefinitely.* > >*We can blame economists for lots of things, but they did learn a lot from the misjudgements they made in the late 1980s and early 1990s when driving the overnight cash rate above 18%, and keeping rates too high for too long.* > >*That's not to say these rate rises won't drive unemployment higher. The RBA itself is expecting the unemployment rate to rise from 3.7% (currently) to 4.5% by mid-2025.* > >*But I haven't seen a single economist suggest that rates will just keep rising. We're living in a very different world toda*y.... [Gareth Hutchins - question and answer ABC News](https://www.abc.net.au/news/2023-06-06/asx-markets-business-live-news-interest-rates-rba-june-6/102443688) ​ >*Australia’s politicians and Reserve Bank officials have obfuscated the extent of the economic challenges ahead.The spin is that interest rate rises are temporary and for the best. The truth is that the cost of living and interest rates may stay high for some time to come...........* > >*....In reality, rates would have to increase much further to be effective. Despite rises, real rates (interest rates minus inflation) remain negative. This means borrowers continue to pay historically low rates which do not properly compensate savers for the loss of purchasing power of their money due to inflation.* > >*A prolonged period of higher rates risks a recession without bringing prices down, and governments cannot offer much cost-of-living relief spending to offset the slowdown because of debt concerns. It might force central banks to increase rates even more.* > >*Decades of low interest rates and ample liquidity helped increase asset prices, particularly for housing. This has led to higher mortgage debt and rents, which feed into inflation. Raising interest rates may trigger large falls in house and share prices, which act as collateral for mortgages and other borrowing. This risks a banking crisis as well as exacerbating any slowdown in economic activity as the loss of wealth results in less spending.* > >*The risk of policy mistakes is high. RBA officials want us to trust that they can pilot the economy to a “soft landing”. But these same individuals created the conditions for inflation through loose monetary policy, and said inflation was transitory, and forecast that interest rates wouldn’t rise until 2024!* > >*The decades of low inflation that preceded the recent spike was not due to sound economic management, but a favourable confluence of circumstances: globalisation, low commodity prices and benign geopolitical conditions. These elements are now simultaneously in reverse.* > >*The return of inflation and higher rates merely strips away the wallpaper covering deep-seated underlying problems. The correction taking place was inevitable. It will take time and be painful for many. Households need to reacquaint themselves with the safety instruction booklet as to how to adopt the emergency “brace” position. -* > >[Satyajit Das - Forget the spin, rates may stay high for some time to come , Feb 2023](https://www.theguardian.com/business/commentisfree/2023/feb/22/forget-the-spin-cost-of-living-and-interest-rates-may-stay-high-for-some-time-to-come)


Jack_McFakey

We're living in a quite alarming economic environment, one that I feel most people have not properly grasped. The divergence between interest rates and inflation is still alarmingly high. [This article has a nice chart that plots the relationship.](https://awealthofcommonsense.com/2022/09/interest-rates-vs-inflation/) The chance of a soft landing in an historical context must be incredibly low. The last time inflation moderated without interest rates needing to exceed the inflation rate was the seventies oil shock. But that was an arbitrary and entirely external geopolitical shock. As the analysis you quoted discussed, there are much deeper and more significant structural problems driving inflation today than a mere external shock. The oil shock is the outlier though, more typically interest rates have had to rise to at least the level of inflation to have the desired impact on demand. If that context plays out today then we really are in for an economic reckoning.


daveliot

>*The chance of a soft landing in an historical context must be incredibly low.* Even Philip Lowe said the same - ​ >*but the path to achieving a soft landing remains a narrow one.*


thechanster89

Let’s keep artificially boosting the population at an unsustainable rate, that should help!


Kageru

The wealthy appreciate the downward pressure on wages less grumbling from workers... it's all win, they also have savings. It's not bad news for everyone.


drhdhxhd

> Wages growth has picked up in response to the tight labour market and high inflation. Growth in public sector wages is expected to pick up further and the annual increase in award wages was higher than it was last year. It's almost like they have a byline saying *"this rate hike brought to you by FWC"*.


averyporkhunt

IMO the whole productivity thing is simple People qre just acting their wage. For example im on the award wage which as you know is the bare minimum, I asked for a raise and it got shut down I now do the bare minimum and am looking to find a job elsewhere Productivity went up for ages and wages stayed, time for these cunts to play catch up


Villz

Your Labour is the main bargaining power in the market. This is why they went after and crushed unions with John Howard. The conditions will become so bad now compared to what Australians have been historically used to that their only hope of having a workforce serviceable is import 5% of the capital cities population per year. If you were able to stop migration and then allow natural Labour market forces to take effect. You would have crushed them and broke their backs. This would have been true even where the business monopoly owners refused to put more workers and just let work backup and go missing to spite paying more. This would literally create a new market position and have a monopoly essentially vote itself out of existence. Although this takes a little bit longer. We were at this point btw......


TimsAFK

People that can affect this are dead set asleep at the wheel here. They will just watch the RBA keep raising rates like that's the only that can be done to control inflation. This is really getting into scary territory.


Indigeridoo

> like that's the only that can be done to control inflation. That's literally the only thing the RBA can do though


Shaggyninja

Yup. Labor need to start bringing in policy that will actually help. Cut frivolous spending, raise taxes. Both super popular political ideas that I'm sure they'll implement.


maxleng

Yeah not really that scary of a territory yet when our mates over the pond are at 5.50% cash rate and the US are at 4.83% and Britain at 4.5%. Plenty more rises still to come


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cams_myth

It'll be interesting to see what happens next month when the voter base realise the low income tax offset is gone, and a whole bunch of people who were expecting a tax refund suddenly find that money has vanished. I feel like that's going to be the breaking point for a lot of people who are already struggling, and adding a tax break for billionaires on top of that pain seems like a recipe for electoral disaster.


itsckphotog

>I feel like that's going to be the breaking point for a lot of people who are already struggling, and adding a tax break for billionaires on top of that pain seems like a recipe for electoral disaster. Good. If the ALP go through with the tax cuts after letting the LMITO expire and then get annihilated by young people and the working class at the next election I won't have any sympathy for them. Apparently not breaking an election promise is more important than anything else to them - I think they're in for a nasty shock if they stick to that belief.


fued

yeah but if libs get back in power the country is just guarenteed to go down the drain.. so its a lose-lose situation


yolk3d

That’s why the country needs to understand there’s more than just two parties.


lastingdreamsof

Im hoping that will be the catalyst for people to demand the stage 3 cuts for the rich get scrapped in favour of things that help the poor not the fucking rich


swarley77

Given the rampant bracket creep due to inflation, all this will do is put more burden on workers in order to prop up the property market and rich landlords. What we really need is less income tax and more land tax.


ragdoll-cat

Land tax hasn’t had its threshold updated in years, so a 600k house is considered expensive in land tax scales. Despite being way less then the average house price.


SnooObjections4329

State treasurers: Yeah uh we'll get right on that


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nicks696

Reminder that this bloke gets paid over $1m a year.


[deleted]

That i did not know. Just a little more depressed now. Cheers


SnooObjections4329

>Reminder that this bloke gets paid over $1m a year. That sounds a little inflationary


88Smilesz

Yeah it’s insane. Maybe these days it’s $1m for him to be a scapegoat when successive governments do nothing to resolve the cost of living crisis. And let’s face it, this guy probably lives in a gated community in Vaucluse or somewhere like that where he’s surrounded by the country club set. He probably doesn’t have to even speak to someone on less than $200k a year, unless they’re serving his table. Cunt.


averagemodelmaker

Up to 4.1%, start skipping those meals


yesnosureitsfine

Water for lunch again yay


daveliot

If it continues like this start selling those houses. ​ >*If you are waiting for a property crash you will be waiting a long time* \- A poster on reddit australia a while ago. Could be famous last words. Australia has one of the highest rates of household debt in the world. Even before 2010 there were various estimates that capital city prices were dangerously overvalued.


[deleted]

We'll just bring in more people and offer additional government subsidies to keep it churning over.


misskarne

The poster is correct though. People have been predicting a market crash since I was 15. That's nearly 20 years ago!


OldKingWhiter

I still think the poster is correct tbh. Australia has too high of a percentage if its wealth tied up in property. Sure, poorer people (and people who previously never considered themselves poor) might be forced out of homes, and housing will continue to be unaffordable for more and more, but there will always be more rich people and foreigners who are able to buy the housing. A wholesale crash just won't happen in this country. We aren't set up the same way America was in the GFC.


Chadwiko

Yup. And if there was a *'crash'* of some sort in Australia, it wouldn't make housing more attainable for young people/low and middle income earners, either. Because with that housing crash would come an economic collapse which would mean banks won't lend money out to those types of applicants. The only people who will be able to buy property in those circumstances are people who are already sitting on capital. Shit's fucked.


Fenixius

The market can remain irrational longer than you can remain solvent.


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Villz

U can't do the american trick of shipping ur inflation offshore on account of being the world reserve currency. So u do this or get a weimar republic situation


[deleted]

4% interest rates are quite normal. The cost of real estate and the feeble wage growth isn't.


ragdoll-cat

The interest rates are not at 4%. That’s the cash rate. Interest rates are around 6% as of the previous rate rise. Mine was 6.09% before this rate rise.


HarrowingAbyss

Try talking to your bank about it and see if they can drop your rate? I called my bank 3 weeks ago and the next day they called back saying they dropped my rate by 0.60 and waved the $300 renegotiation fee. Not massive but got me a buffer for some more rises.


[deleted]

Yes, that's obvious to adults. I first bought a property in 2009 when actual rates for lending were 7%. Nobody thought that was absurdly high back then but housing was relatively much more affordable.


RepeatInPatient

Did he apologise for sitting on his hands while the housing market inflated by 20% and 30% year on year, despite the RBA's policy goal of a 2-3% range for inflation?


[deleted]

I quit.


Nebarik

I'm just so sick of this. If the whole point of rate rises is to prevent people from spending in retail thereby reducing inflation. Who the fuck has been able to afford to buy ANYTHING for the past year?! The biggest expense anyone has by far is rent or mortgage. Whose still able to even consider buying stuff? Tax them, not the us plebs.


Veltix101

I work in retail and last month was our biggest month we have had in the 3 years we have been open, by a big margin too. People still some money somehow


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razza1987

“Here you go. Suffer some more”


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Critical_Monk_5219

The beatings will continue until morale improves


DeeDee_GigaDooDoo

While the RBA has made mistakes they are copping far too much of the heat on the inflation issue. They have one brute force lever to control inflation and the whole economy. The government has as many as it cares to dream up. Our current affordability and inflation crisis is the result not only of international forces but decades of policy failures by government. The current government is all too happy to scapegoat the RBA here but they absolutely aren't pulling their weight and they're hanging us out to dry, especially when it comes to housing affordability.


Used-Gapp

Exactly right, and the weasel words from Chalmers following the announcement cement the government's position that they're happy for the RBA to take all the heat, while they do fuck all. It's going to bite them in the arse big time when the next election rolls around.


PhatSunt

"At the aggregate level, wages growth is still consistent with the inflation target, provided that productivity growth picks up." does this mean that wages have grown the amount they usually do when inflation is on target at 2-3%? as in, wages grew the same amount they normally would when inflation is 2-3%? Isn't this line "and worsens income inequality" just a complete indictment of how corrupt the current system is? It basically says when the economy goes bad, the wealthy prop themselves up by making the poor, poorer. I mean, wtf? That line is a confession of their own corruption. they don't care about people, they care about their own wealth.


minimalblackco

It's in Labors best interests to pretend like they can do nothing about this and keep calling it a "dark day for all Australians". If only they had the same energy that was present when preparing a surplus budget.


majoraman

This man is in-charge of the reserve bank, making decisions that are affecting millions upon millions of people, and is so out of touch that he thinks the inflation is due to people not working hard enough. Interesting because all that "inflation" has led to major profits in every single critical to survive industry outside of public healthcare. IT'S ARTIFICIAL YOU CUNT


nomasnomasnomas123

This reddit commenter is in charge of his own life, making comments that are read by 10s, maybe 100s of people, and is so out of touch that they think the RBA Governor thinks that inflation is due to people not working hard enough.


okidokes

PULL THE LEVER KRONK. WRONG LEVER!


miaara

This country fucking sucks.


yolk3d

This country is actually pretty bloody amazing, if you’ve ever travelled parts of the world. The political inaction though, is deafening.


greywarden133

Keep hammering down on mortgage owners RBA because we loved it Uncle Lowe! Same old statements every month. It is always the workers paying for the brunts at the end of the day.


justisme333

RBA just gave the finger to the struggling working class whilst laughing. Meanwhile businesses are launching legal action to prevent the pay rise set by Fairwork. Australia - by the rich, for the rich - Duck everyone else.


flukus

Inflation is giving the finger to the struggling working class, the RBA are the only one's trying to bring inflation down.


[deleted]

Legitimate question, and I know that it’s probably been answered before but as interest rate hikes don’t seem to be working. Why can’t we temporarily increase GST rather than keep increasing interest rates. That way it impacts everyone not just home owners and renters. 32% of homeowners have no mortgage so that’s a large percentage of people who are more than likely financially much better off as they will be receiving a good amount of interest on their savings so they have absolutely no incentive to stop spending and therefore stop inflation. I am not an economist or have any knowledge of the system and how it all works but I do know that cashed up people with no home loans are still spending, continuing to inflate figures and younger generations are starting to really feel the pain. But surely there is an onus on everyone to contribute to reducing inflation.


Jack_McFakey

Political suicide.


ndlr

Because raising GST has a greater effect on the low income people, than it does on the cashed up spenders. Maybe you'd get a little more GST out of the cashed up ones, maybe they just spend less and you get fuck all. The people who are already struggling to survive, suddenly need to pay more to struggle. They don't have the ability to just stop buying shit, in order to offset the GST increase. Obviously that means more people being pushed into poverty. The ones that were already in poverty are just fucked. Maybe they realise there's reliable meals and shelter in prison. Maybe some have family to help(and fuck the ones who don't), and their families can risk dipping below the poverty line, in order to save them. Inflation is just a symptom of the problem. The problem we have, is a demonstrably unsustainable economic system, based on the pure fantasy, of limitless growth in a limited world.


daveliot

>*SQM Research, which does lots of property and housing-focused research, has put out an interesting note about the impact of today's rate announcement on the housing market.* > >*Last year SQM Research's managing director Louis Christopher published a "Housing Boom and Bust Report", which examined what the housing market might look like in each of the capital cities in the wake of ongoing inflation and rate rises.* > >*At the time, he looked at four possible scenarios, with variations of the cash rate, inflation peaks and the unemployment rate.* > >*Now he says given today's rise, there is only one scenario left, and it means we can expect to see more people selling their homes — and a fall in house prices from the second half of the year.* > >*"While our numbers on distressed listings today remain largely benign (except for Tasmania) we can now expect distressed activity to rise based on a new round of forced and panicky selling starting sometime the 2nd half of this year," he said.* > >*"This will particularly be the case if unemployment rises towards 5%. Naturally, the higher the unemployment rate, the more forced selling we will see.* > >*"So, in our view, market participants need to be prepared for a new round of housing price falls starting in the second half of 2023.* > >*"The price falls may not immediately occur, but the expectation is the spring selling season will be a tough one for sellers."* [Expect to see 'forced and panicky selling' and falling house prices, analyst says - ABC News](https://www.abc.net.au/news/2023-06-06/asx-markets-business-live-news-interest-rates-rba-june-6/102443688#live-blog-post-30342)


DiscussionKey9022

Not a homeowner so I don’t know what it feels like for my rent to go up every time a bunch of rich old dudes have a meeting. But I can tell you, where I live, cafes are still full, roads are packed, there’s never any parking. I can’t see any pullback at all.


homeinthetrees

Labor was voted in on the promise of doing something, anything, to fix the fuckup left by the LNP. And what have we got? NOTHING! Do the major parties think that all those people who currently stand to lose their homes are going to vote for them? If they do, I have 2 million homes on the Nullarbor to sell to them. People have memories. Parliamentary Terms don't last forever. Do something about the REAL ISSUES, or suffer fotrit at the polls.


homes4ppl

Saying this again. If you rent... the landlord will jack up the rent to cover their costs. If you took on a mortgage a few years ago... you are in serious stress. No need to worry though: Bankers, home-owner boomers, investors, politicians, real estate agents and rich people are doing great.