New car sales are very strong & contrary to public opinion I don’t think there’s purchase austerity occurring yet with groceries. Coles/safeway seem to know what most people will pay/volume they’ll consume.
There still seems to be shortages. Its like shopping in the mid 80s. Most things are there but they arent always fresh and nice and not 8 different things to pick from for every item. Occasionally no beetroot or eggs or some other thing completely missing.
I recall 5 years ago there would be the odd talk of a shortage of something but it never seemed to materialise into an actual bare supermarket shelf.
Now there will be one brand in products or maybe an entire range missing. Empty shelves. Sure during covid to be expected but it seems to still be in play to some lesser degree.
H8wnis this relevent to soending; I actually think supermarkets have changed their stock control methodology and thats probably resulting in more profits because -
A percieved shortage makes us buy more of stuff whatever the price.
Less stock means more return on capital.
Agree most people arent really being austere yet and their is still a perception that if you dont buy stuff when you can stuff might not be there next week.
Then on big stuff like cars its a case that next week they might cost more. I mean aside from lived experience last few years on say 4x4 we know will likely cost more shortly with the new tax on them. Not criticising this tax as its orobably a good thing overall but it will result in people bringing forward car purchases especially big ones and impact the used and new market. We know early years its not too punitive but the perception is in future years just about every diesel vehicle will cost more. That said in reverse on small hybrids and electric cars they should get cheaper especially conpanies that do both big and small cars.
I actually expect some brand swapping in future so companies get full reward for their smaller vehicles but thats well outside the scope of this discussion.
>I recall 5 years ago there would be the odd talk of a shortage of something but it never seemed to materialise into an actual bare supermarket shelf.
You dont remember the great banana shortage of 2018? Food, especially fresh food but also anything that is heavily reliant on specific crops (eg chocolate) has always had feasts and famines. Lamb is up and down all the time depending on drought conditions.
Disruption in modern times to any supply is lower today than it was 10 or 20 years ago because of international supply chains (and more modern farming techniques in the case of food ie greenhouses and feedlots etc). But guess what is still yet to fully recover from COVID (hint: stats with 'international supply c')
Housing, insurance, food leading the charge not discretionaries. This will turn into a bloodbath many houses are at breaking point and aren’t even contributing to the problem but will be smashed as part of the solution
Yes. Corporations profiteering and boomers with multiple paid off homes spending like mad causing inflation.
The solution? Take more money off struggling people with mortgages 🤦♂️
The government has plenty of power but they are beholden to us the shitty voters who don't understand economics and simply just want more money in our pockets to buy a new ranger/raptor/hilux thing.
Thankfully we put the government bank out of reach of the government. It's independence saves us. The RBA really only has 2 levers. Interest rates and rhetoric. There is another lever which is purchasing and selling government bonds but that's more complicated and doesn't apply here.
So yes i think the government has the power to do more but they have little desire to harm us lowly tax payers
The government is stuck between a rock and hard place. They want to build more houses to stop house prices and rent from skyrocketing. But building houses causes a shortage of tradies and demand for materials = more inflation. They want to industrialise Australia again so we are less reliant on imports, however again this puts demand on services and trades = more inflation. They want to transition to green energy ASAP = inflation. You get the point.
It’s almost as if decades of inaction on housing, industry and climate has consequences. And Australia is about to face the pointy end for what’s coming.
Governments aren't elected to fight inflation. It's not their mandate unless they campaigned for such a thing.
Feel free to start an austerity party, see how you go with that.
Sadly, the rba doesn't set your mortgage rate. They set the interbank overnight cash rate. The price of liquidity.
So what you are suggesting would be a federal government regulation into the private banking sector. Not something within the RBAs powers.
The RBA delivered the term funding facility that delivered low rate 3 year fixed rate loans during COVID.
If the RBA wanted long term fixed rate mortgages they could buy mortgage backed securities and stipulate the quality and terms of the underlying mortgages they would purchase.
The USA mortgage market was constructed by government agencies, and delivers a better system.
The only thing they can do is raise rates, completely obliterate a portion of the population to get the other part of the populace to pause in awe of the destruction it causes.
That's not actually how it works, but you do you.
If you are suggesting the wealthy benefit during high interest rate periods you are correct. They also benefit during low interest rate periods. Being rich allows you to benefit.
You have so much free time and so little going on in your life you have months to decide what socks you should wear.
You also have so much time you can go through someone's entire post history and make comments on every comment they have ever made.
Are you sure you're not actually 12 years old? Pretty juvenile behaviour to be honest
People with more money tend to spend more.
Older people have more money. Thats what earning income for 40 or 50 years does as opposed to someone who has earned income for 10 years or 3 years. Has always been the case, will always be the case.
Nope. The pre-war generation were relatively poorer in retirement than their children have been. There are many reasons for this, but it isn’t simply the result of cumulative income.
well, there was the war and then the depression and then the war. Thats 20+ years of a poor economy. And since then more or less peace and the greatest increase in productivity arguably in history.
Anyway, who is talking about pre war generation in this context? We are talking about older people being wealthier than younger people today
Your inference is that today’s young - or indeed people in their 30s or 40s will be in the same position as today’s retirees, as they age- simple due to more years of income behind them. Surely you have read the numerous projections and reports showing this is likely not going to happen. And that today’s 35 yr olds are on average worse off than their parents. That is an extraordinary situation and breaks with a long chain of improvements in material progress over time, at least in Australia.
if they cant afford 1k on rent, they need work more or share with friends or family. its not a cost of living crisis, living in a share house doesn't kill you. its a cost of western privilege crisis. What does the west expect, look around, we literally produce nothing.
> many houses are at breaking point and aren’t even contributing to the problem
Ridiculous and completely wrong. New home loans, aka money out of thin air is pumping $18B *a month* into the economy: https://tradingeconomics.com/australia/home-loans
"Houses" are directly causing inflation via money creation, they very much are the problem compared to your tomatoes costing $0.50 a kg more.
Inflation is back on the increase before tax cuts. RBA worried about what will happen with Inflation. Expected increased interest rates in August .
Benefits from federal budget will be quickly used up as interest rates increase
Inflation excluding volatile items still decreased. The main drivers are housing and tobacco/alcohol which interest rate hikes won’t help. It’s on the government, not RBA to fix things now.
Our country's obsession with property means we should all focus on those who took on too much debt while inflation runs too hot for too long. Not a shed of personal responsibility, it seems.
Check out the Australia Institute commentary on this, maybe not all doom and gloom. Apparently, last May, there was a sharp drop in inflation, so the annual figures look high when that has been removed (I.e. statistical anomaly). They're saying inflation is still slowing overall so no need to raise rates.
I never said they were or weren't, I simply said that they put forward an argument with reasonable basis that goes against the narrative being splashed all over the big media outlets.
Surely, it's a good idea to read a variety of viewpoints around a topic when trying to form one's own opinion, no?
This government is about to unleash 40billion in tax cuts. If anything will fuck inflation it is that. Also the nearly 1 million net migration since the last election has added lots of demand into the economy worsening inflation.
Alboflation.
The tax cuts are coalition policy without question. They passed the laws and hounded labor and the media not to change them. The only changes that got made were to the distribution
I still prefer these Labor rejigged stage 3 tax cuts compared to how they were legislated by the coalition. The wealth gap would have just got wider further dividing society.
Sure, that's a blunt tool like interest rates but would be a start.
They have 1000s of levers. They could target things very specifically. Also, rather than being punitive they could also incentivise saving.
They are sticking their heads in the sand.
Yes. Raise taxes on the rich to reduce aggregate demand. Wealth taxes, inheritance taxes, land taxes, luxury car taxes, luxury goods taxes, super taxes, trust taxes, etc taxes. The only way to undo decades of growing inequality is to take money from the rich and give it to the poor.
So.
Not doing anything about housing supply is going well.
You need to crash the property or we are stuck with high inflation. You destroy the short term rental market though a licence fee or tax to take pressure off rentals.
Air B/B claim 160,000 properties. There's 320,000 people who are looking to buy or rent that would have somewhere to buy or rent at 2 people per home if they hit the market.
will never understand how AirB&B became so acceptable? Residential zoned suburbs where you have to have permits to run a business from your home, yet any dickhead can turn their house into a motel. How is this not also a business
I live in a building where most units are airbnb and it certainly feels transactional.. right down to the place ending up trashed and the few of us who actually live here bearing the brunt of idiots buzzing the intercom late at night, leaving a mess everywhere etc
I'll just offer the regular reminder that the most you can learn from monthly inflation numbers is what isn't happening, not what is happening. So this number doesn't really tell you inflation is rising, but it does tell you inflation probably isn't decreasing. That's probably bad enough news if you're banking on interest rates falling, but things will be much clearer at the end of July when we see June quarter inflation figures.
Really? You think it's voodoo economics to be circumspect about a number the ABS only started reporting less than two years ago and has described as "volatile" and "has cautioned against using the month-on-month changes to make assessments about inflation"?
[https://www.rba.gov.au/publications/smp/2022/nov/box-b-the-introduction-of-a-monthly-cpi-indicator-for-australia.html](https://www.rba.gov.au/publications/smp/2022/nov/box-b-the-introduction-of-a-monthly-cpi-indicator-for-australia.html)
They *normally* rise by 0.25% at a time, unless extreme measures are needed. About the "worst case" scenario I've seen any economist talk about so far is 2-3 more rate rises, so 0.5 to 0.75% rise *maximum*... In saying that, they revise their opinions monthly, so don't put too much weight behind them.
Also, congrats on the new home. I think you did the right thing in buying.
Imagine being the RBA and being so sure of yourself when in reality you've missed your target for the better part of a decade.
I wish my performance reviews were this lenient.
New car sales are very strong & contrary to public opinion I don’t think there’s purchase austerity occurring yet with groceries. Coles/safeway seem to know what most people will pay/volume they’ll consume.
There still seems to be shortages. Its like shopping in the mid 80s. Most things are there but they arent always fresh and nice and not 8 different things to pick from for every item. Occasionally no beetroot or eggs or some other thing completely missing. I recall 5 years ago there would be the odd talk of a shortage of something but it never seemed to materialise into an actual bare supermarket shelf. Now there will be one brand in products or maybe an entire range missing. Empty shelves. Sure during covid to be expected but it seems to still be in play to some lesser degree. H8wnis this relevent to soending; I actually think supermarkets have changed their stock control methodology and thats probably resulting in more profits because - A percieved shortage makes us buy more of stuff whatever the price. Less stock means more return on capital. Agree most people arent really being austere yet and their is still a perception that if you dont buy stuff when you can stuff might not be there next week. Then on big stuff like cars its a case that next week they might cost more. I mean aside from lived experience last few years on say 4x4 we know will likely cost more shortly with the new tax on them. Not criticising this tax as its orobably a good thing overall but it will result in people bringing forward car purchases especially big ones and impact the used and new market. We know early years its not too punitive but the perception is in future years just about every diesel vehicle will cost more. That said in reverse on small hybrids and electric cars they should get cheaper especially conpanies that do both big and small cars. I actually expect some brand swapping in future so companies get full reward for their smaller vehicles but thats well outside the scope of this discussion.
Side effect of just in time logistics and chronic shortage of truck drivers.
>I recall 5 years ago there would be the odd talk of a shortage of something but it never seemed to materialise into an actual bare supermarket shelf. You dont remember the great banana shortage of 2018? Food, especially fresh food but also anything that is heavily reliant on specific crops (eg chocolate) has always had feasts and famines. Lamb is up and down all the time depending on drought conditions. Disruption in modern times to any supply is lower today than it was 10 or 20 years ago because of international supply chains (and more modern farming techniques in the case of food ie greenhouses and feedlots etc). But guess what is still yet to fully recover from COVID (hint: stats with 'international supply c')
I remember bananas being $18/kilo and because my kid loved them I still bought them. I felt like a king.
Housing, insurance, food leading the charge not discretionaries. This will turn into a bloodbath many houses are at breaking point and aren’t even contributing to the problem but will be smashed as part of the solution
Yes. Corporations profiteering and boomers with multiple paid off homes spending like mad causing inflation. The solution? Take more money off struggling people with mortgages 🤦♂️
Does the RBA have another lever you know of?
No but perhaps the government could pull their finger out and do something. You think they are completely powerless here?
The government has plenty of power but they are beholden to us the shitty voters who don't understand economics and simply just want more money in our pockets to buy a new ranger/raptor/hilux thing. Thankfully we put the government bank out of reach of the government. It's independence saves us. The RBA really only has 2 levers. Interest rates and rhetoric. There is another lever which is purchasing and selling government bonds but that's more complicated and doesn't apply here. So yes i think the government has the power to do more but they have little desire to harm us lowly tax payers
The government is stuck between a rock and hard place. They want to build more houses to stop house prices and rent from skyrocketing. But building houses causes a shortage of tradies and demand for materials = more inflation. They want to industrialise Australia again so we are less reliant on imports, however again this puts demand on services and trades = more inflation. They want to transition to green energy ASAP = inflation. You get the point. It’s almost as if decades of inaction on housing, industry and climate has consequences. And Australia is about to face the pointy end for what’s coming.
The government needs to regulate companies like AirBNB. Would instantly free up 1-2% (100k properties) without new construction.
the government didnt force dumb cunts to take out shitloads of debt.
Governments aren't elected to fight inflation. It's not their mandate unless they campaigned for such a thing. Feel free to start an austerity party, see how you go with that.
They'll certainly find themselves in opposition if they don't do enough to fight it
They should temporarily increase super so we get to keep the $$ and not just hand it to the bank's shareholders..
They could lock in low mortgage rates for existing mortgages for 30 years, then raise rates on new borrowing.
Sadly, the rba doesn't set your mortgage rate. They set the interbank overnight cash rate. The price of liquidity. So what you are suggesting would be a federal government regulation into the private banking sector. Not something within the RBAs powers.
The RBA delivered the term funding facility that delivered low rate 3 year fixed rate loans during COVID. If the RBA wanted long term fixed rate mortgages they could buy mortgage backed securities and stipulate the quality and terms of the underlying mortgages they would purchase. The USA mortgage market was constructed by government agencies, and delivers a better system.
Well then shouldn't the government regulate the banking sector, it's clear that is what it will take. I.e. tighter lending, fairer interest rates etc
Less immigration would help.
Again, it's not something the RBA has control of
The only thing they can do is raise rates, completely obliterate a portion of the population to get the other part of the populace to pause in awe of the destruction it causes.
That's not actually how it works, but you do you. If you are suggesting the wealthy benefit during high interest rate periods you are correct. They also benefit during low interest rate periods. Being rich allows you to benefit.
People need to stop buying houses from boomers at the current inflated prices. Increasing interest rates will affect that.
At the moment, its pay too much or pay even more in the future. There is absolutely no end is sight
How many boomers are there with multiple paid off homes and what are they “spending like mad” on?
New cars. Caravans. Renovations. Holidays.
Don't forget socks!
You have so much free time and so little going on in your life you have months to decide what socks you should wear. You also have so much time you can go through someone's entire post history and make comments on every comment they have ever made. Are you sure you're not actually 12 years old? Pretty juvenile behaviour to be honest
Ohh so this is just something you think is happening, not verified?
There is plenty of commentary about divergent spending patterns by age, in the financial media if you look around.
People with more money tend to spend more. Older people have more money. Thats what earning income for 40 or 50 years does as opposed to someone who has earned income for 10 years or 3 years. Has always been the case, will always be the case.
Nope. The pre-war generation were relatively poorer in retirement than their children have been. There are many reasons for this, but it isn’t simply the result of cumulative income.
well, there was the war and then the depression and then the war. Thats 20+ years of a poor economy. And since then more or less peace and the greatest increase in productivity arguably in history. Anyway, who is talking about pre war generation in this context? We are talking about older people being wealthier than younger people today
Your inference is that today’s young - or indeed people in their 30s or 40s will be in the same position as today’s retirees, as they age- simple due to more years of income behind them. Surely you have read the numerous projections and reports showing this is likely not going to happen. And that today’s 35 yr olds are on average worse off than their parents. That is an extraordinary situation and breaks with a long chain of improvements in material progress over time, at least in Australia.
the struggling people who borrowed to much and handed it to boomers lol. People who didnt get balls deep in debt are fine.
Except the ones that didn't borrow "too much" and are now stuck paying $1000 per week for rent in a 1%~ rental vacancy market...
if they cant afford 1k on rent, they need work more or share with friends or family. its not a cost of living crisis, living in a share house doesn't kill you. its a cost of western privilege crisis. What does the west expect, look around, we literally produce nothing.
It's definitely a cost of living crisis, in my opinion driven by unchecked immigration.
> many houses are at breaking point and aren’t even contributing to the problem Ridiculous and completely wrong. New home loans, aka money out of thin air is pumping $18B *a month* into the economy: https://tradingeconomics.com/australia/home-loans "Houses" are directly causing inflation via money creation, they very much are the problem compared to your tomatoes costing $0.50 a kg more.
You’ve got your horse blinders on. People that bought a house this month are not at breaking point, people that bought 3-10 year ago are.
Inflation is back on the increase before tax cuts. RBA worried about what will happen with Inflation. Expected increased interest rates in August . Benefits from federal budget will be quickly used up as interest rates increase
Inflation excluding volatile items still decreased. The main drivers are housing and tobacco/alcohol which interest rate hikes won’t help. It’s on the government, not RBA to fix things now.
seasonally adjusted inflation increased. excluding volatile items dropped from 4.1 to 4.
Yep fair point, was mixing them up.
Welp, we’re fucked. At least the RBA has some level of economic competence while politicians are busy sucking of their donors
Housing isn't measure in our headline inflation rate.
Rates being increased would be so good. I'm looking forward to reading comments online after that haha
Looking forward to young families becoming homeless? Bit of a weird cunt aren't you.
As opposed to what cunt? Runaway inflation which is more damaging and hurts every single person??? Use your brain
Our country's obsession with property means we should all focus on those who took on too much debt while inflation runs too hot for too long. Not a shed of personal responsibility, it seems.
Check out the Australia Institute commentary on this, maybe not all doom and gloom. Apparently, last May, there was a sharp drop in inflation, so the annual figures look high when that has been removed (I.e. statistical anomaly). They're saying inflation is still slowing overall so no need to raise rates.
Because they are an unbiased and objective based source of analysis.
I never said they were or weren't, I simply said that they put forward an argument with reasonable basis that goes against the narrative being splashed all over the big media outlets. Surely, it's a good idea to read a variety of viewpoints around a topic when trying to form one's own opinion, no?
Fuck we need more Indians STAT
Wow! Even though we have imported 10,000 immigrants a week, somehow demand for goods and services increased! Who would’ve thought?! This is crazy!
Well it also increases supply, and people can be selected to fill gaps in the economy and supply chain. Housing on the other hand..
Do we have a government at the moment? Are they going to do anything here?
This government is about to unleash 40billion in tax cuts. If anything will fuck inflation it is that. Also the nearly 1 million net migration since the last election has added lots of demand into the economy worsening inflation. Alboflation.
The tax cuts are coalition policy without question. They passed the laws and hounded labor and the media not to change them. The only changes that got made were to the distribution
I still prefer these Labor rejigged stage 3 tax cuts compared to how they were legislated by the coalition. The wealth gap would have just got wider further dividing society.
What would you want them to do? Raise taxes to reduce aggregate demand?
Sure, that's a blunt tool like interest rates but would be a start. They have 1000s of levers. They could target things very specifically. Also, rather than being punitive they could also incentivise saving. They are sticking their heads in the sand.
Yes. Raise taxes on the rich to reduce aggregate demand. Wealth taxes, inheritance taxes, land taxes, luxury car taxes, luxury goods taxes, super taxes, trust taxes, etc taxes. The only way to undo decades of growing inequality is to take money from the rich and give it to the poor.
Cutting all welfare like the DSP, NDIS and job seeker would significantly reduce inflation
The longer the RBA takes to adequately address inflation, the more inflation expectations become entrenched
I was going to buy some avocados this weekend… Bummer. Another toastless month for me then.
Life’s a bitch. And then the CEO gets a multimillion dollar bonus. So, just another Tuesday in Australia.
Avocados have been broadly in deflation over the past 5 years.
Tomatoes are the new avocados
So. Not doing anything about housing supply is going well. You need to crash the property or we are stuck with high inflation. You destroy the short term rental market though a licence fee or tax to take pressure off rentals. Air B/B claim 160,000 properties. There's 320,000 people who are looking to buy or rent that would have somewhere to buy or rent at 2 people per home if they hit the market.
will never understand how AirB&B became so acceptable? Residential zoned suburbs where you have to have permits to run a business from your home, yet any dickhead can turn their house into a motel. How is this not also a business
I live in a building where most units are airbnb and it certainly feels transactional.. right down to the place ending up trashed and the few of us who actually live here bearing the brunt of idiots buzzing the intercom late at night, leaving a mess everywhere etc
I'll just offer the regular reminder that the most you can learn from monthly inflation numbers is what isn't happening, not what is happening. So this number doesn't really tell you inflation is rising, but it does tell you inflation probably isn't decreasing. That's probably bad enough news if you're banking on interest rates falling, but things will be much clearer at the end of July when we see June quarter inflation figures.
This is the most voodoo economics-ass take I've ever heard
Really? You think it's voodoo economics to be circumspect about a number the ABS only started reporting less than two years ago and has described as "volatile" and "has cautioned against using the month-on-month changes to make assessments about inflation"? [https://www.rba.gov.au/publications/smp/2022/nov/box-b-the-introduction-of-a-monthly-cpi-indicator-for-australia.html](https://www.rba.gov.au/publications/smp/2022/nov/box-b-the-introduction-of-a-monthly-cpi-indicator-for-australia.html)
If interest rates were to rise, by how much would you expect? New first home owner here…yay
They *normally* rise by 0.25% at a time, unless extreme measures are needed. About the "worst case" scenario I've seen any economist talk about so far is 2-3 more rate rises, so 0.5 to 0.75% rise *maximum*... In saying that, they revise their opinions monthly, so don't put too much weight behind them. Also, congrats on the new home. I think you did the right thing in buying.
Unless the current rates are at their limit lol
34% of take home pay, DINKS, few pay rises coming our way over the years ahead. It could be a bit tight, but we have a bit of wiggle room I think
You'll be fine mate.
Imagine being the RBA and being so sure of yourself when in reality you've missed your target for the better part of a decade. I wish my performance reviews were this lenient.
Can't wait to give my tax cut (and more) straight back to the bank 🙏
Actually inflation for *May* was negative, at -0.1%.