It’s the gamers who are being hit by inflation.
asserted
who → ’ → inflation
And as gamers deal with huge spikes in the prices of their consoles, the policy problems facing the Reserve Bank, Jim Chalmers and the phalanx of state and territory treasurers follow.
asserted
problems → deal → treasurers
The latest monthly inflation figures from the bureau of statistics all-but guaranteed that the Reserve Bank’s monetary policy committee will inflict another rate rise on the economy on Melbourne Cup Day.
asserted
committee → guarantee → Day
The 4.3 per cent headline inflation rate for September, and 3.6 per cent for the key underlying measure were, as bank deputy governor Andrew Hauser said, too high.
asserted
Hauser → say → measure
As Hauser and governor Michele Bullock have often reminded Australians, the RBA has only one tool to deal with inflation.
asserted
RBA → remind → inflation
Hence its four rate rises this year with the big chance of another that will push the cash rate to 18-year high of 4.85 per cent next Tuesday.
asserted
that → push → cent
By lifting rates, the bank is trying to reduce overall demand across the economy with the stated aim of bringing inflation back to its 2-3 per cent target - something it has spectacularly failed to do since the fag end of the Abbott government - by the end of next year.
asserted
it → lift → year
It can definitely be assisted by a reduction in government spending, at the federal and state level.
asserted
It → assist → level
Chalmers and Finance Minister Katy Gallagher have to use their upcoming budget update to actually reduce spending.
asserted
Chalmers → have → spending
No matter how they characterise the pressures on government services, a budget deficit of $31.5 billion (after a $22.3 billion shortfall in 2025-26) is a loosening of monetary policy during a period of excess demand in the economy.
asserted
deficit → characterise → economy
Their state counterparts, many of whom seem to believe their job is to ignore their role in the economy while putting out their hands for more federal cash, have to dramatically lift their performances and tighten their belts.
asserted
job → seem → belts
They have to make some tough decisions because of two other issues at play and directly outside government control.
asserted
They → have → control
The first is the war started by Donald Trump against Iran.
asserted
first → start → Iran
Brent crude started the year at $US60 a barrel.
asserted
crude → start → US60
For the past two months, it has averaged above $US100 a barrel.
asserted
it → average → US100
This spike is feeding through the global economy, from bowsers to PVC pipes to agricultural fertilisers, and is one of the reasons that central banks everywhere are lifting their interest rates.
asserted
banks → feed → rates
The second big factor is the one that is hurting the struggling gamers.
asserted
that → hurt → gamers
The AI construction boom is lifting business investment and pitting tech firms against each other in a semiconductor and chip war.
asserted
boom → lift → war
That war has spilt over into the broader economy.
asserted
war → spill → economy
The September inflation figures showed the costs of games and toys have climbed 15.5 per cent over the past 12 months.
asserted
costs → show → months
Only petrol and diesel have gone up by more.
asserted
petrol → go → more
It’s the biggest increase in games and toys on record and is because demand for computer chips in games and consoles is running much, much faster than supply.
asserted
demand → ’ → supply
Prices for computer equipment, which fell 91 per cent through the first 25 years of this century, have climbed by 6.3 per cent over the past 12 months.
asserted
which → fall → months
It’s why the price of a Nintendo Switch 2 has climbed by 10 per cent this year.
asserted
price → ’ → cent
IPhones and iPads are going up by even more.
asserted
IPhones → go → more
The inflation figures were released around the same time that SK Hynix, one of the world’s biggest producers of computer chips and semiconductors, released its third quarter earnings report.
asserted
Hynix → release → report
It showed average selling prices of its key products had climbed by 20 per cent over the past three months and up four-fold since last year.
asserted
prices → show → year
And it’s not going to get any better.
asserted
it → go → ?
Company chief financial officer Kim Woo-hyun warned huge demand from across the world meant supply shortages were likely to “persist through to 2030”.
asserted
shortages → warn → 2030
Gamers will have to go back to playing pick-up-sticks or dust-encrusted versions of Squatter if that comes to pass.
asserted
that → have → Squatter
Treasury secretary Jenny Wilkinson, who sits on the Reserve Bank’s monetary policy committee, on Wednesday noted that the data centre building boom is competing for labour and resources with government infrastructure projects and the housing sector.
asserted
boom → sit → projects
We don’t have to go back far in time to see what that situation means for ongoing inflation.
asserted
situation → have → inflation
Chalmers, Gallagher and Anthony Albanese are now clearly on notice that they have to play a larger role in easing demand in the Australian economy to deal with global inflationary pressures.
asserted
they → play → pressures
Subscribers can sign up to our weekly Inside Politics newsletter.
asserted
Subscribers → sign → newsletter
The Aporia
