Jim Chalmers is blaming the latest shocking inflation figures on the worsening Middle East conflict, and he has a point.
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he → blame → point
The trouble is, voters aren’t buying what the treasurer is selling.
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treasurer → buy → what
The Australian Bureau of Statistics said that the 9.4% jump in fuel costs in September was largely responsible for inflation accelerating from 4% to 4.3%.
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inflation → say → %
Petrol and diesel prices were on average 24% higher than a year earlier, the data show.
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data → show → ?
We are clearly paying an economic price for Trump’s pointless and damaging war on Iran – and you can’t pin that on the government, whatever your political leanings.
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leanings → pay → government
Then there’s the sudden boom in spending on datacentres, which is pouring money into an economy that is already struggling to deliver the workers and materials needed to build homes and roads.
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that → ’ → homes
Again, this is driven by the global rush by tech companies to put in place the infrastructure to power their artificial intelligence revolution.
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this → drive → revolution
Earlier in the day, Michele Bullock, the RBA’s governor, made the same point: overseas developments were complicating their already tough task of bringing inflation all the way back to 2.5%, preferably by the end of next year.
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developments → make → year
Taking the lion’s share of the blame for worsening cost of living pressures may not be completely fair, but it is the price of incumbency – as the latest Essential poll showed.
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poll → take → incumbency
Nearly a third of voters believe that government spending is the top cause for rising cost of living.
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spending → believe → living
Only 24% said overseas events like the global oil shock was the main reason, and 19% said it was supermarket price gouging.
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it → say → shock
While government spending may not be the main reason that inflation has tracked higher since the middle of the year, it is part of the mix.
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it → track → mix
Economists including Chris Richardson, the country’s top budget watcher, have argued that public spending is too high and is not helping in the battle to bring inflation down.
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spending → include → inflation
This is hard to reconcile with Chalmers’ protestations that the government has nothing to do with the latest jump in cost of living, particularly when RBA officials frequently refer to the capacity pressures that existed when war on Iran started in late February.
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war → reconcile → February
It’s also important to note that the RBA’s preferred measure of underlying inflation – removing the biggest price moves – also lifted from 3.6% to 3.7% in the year to the September quarter.
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measure → ’ → quarter
Regardless of who or what is to blame, and to what degree, voters are likely to get angrier still next Tuesday when the Reserve Bank surely delivers the year’s fifth interest rate hike.
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Bank → blame → hike
In Senate estimates before the latest price statistics were released, Reserve Bank officials confirmed they were more worried about inflation becoming entrenched than they were about rising unemployment, which recently reached a five-year high.
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which → release → high
So it’s hard to see anything but more pain for mortgage holders come Melbourne Cup day.
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it → ’ → day
Another rate rise will bring the cash rate to 4.85% – the highest since the GFC.
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rise → bring → GFC
If you’re starting to fret about that comparison, Sarah Hunter, the RBA’s chief economist, offered the reassurance that there were no signs the economy was “in or heading into a recession in the near term”.
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economy → start → term
Perhaps, but there is no doubt we are heading into more dangerous territory, and the future is looking darker, not brighter.
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future → be → territory
Families are approaching Christmas with rates at their highest since 2008, sky-high petrol costs, and rising unemployment.
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Families → approach → 2008
For many households, it will be a tough summer that will add to an increasingly entrenched pessimism about the future.
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that → add → future
The share of Australians saying they think the country is on the wrong track has been steadily climbing and reached 61%, according to the latest Essential poll.
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country → say → poll
Only 25% of voters think the opposite.
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% → think → opposite
The pressure is now on Chalmers to use December’s mid-year budget to somehow change the narrative as the government approaches the third year of this parliamentary term.
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government → use → term
It will be a tough ask, and there are no obvious answers.
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It → be → ?
There is, at least, one thing we can agree on.
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we → be → ?
As the treasurer is fond of saying: the Middle East conflict can’t end soon enough.
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conflict → say → ?
The Aporia
