Window Dressing: The Ozzie Inflation Battle Raises Burning Questions For Us All!

In the past 48 hours we had a no change interest rate decision from the RBA and monthly headline inflation which dropped within the target 2-3% target range from the partial services heavy monthly data release, thanks to temporary Government handout to ease costs of living so window dressing the results, but which the RBA says they will look through in the policy deliberations.

The RBA, is facing increasing pressures at home to lower borrowing costs, with politicians sparring over the outlook on interest rates ahead of an election due by May 2025. But Bullock said the RBA won’t be dragged into politics as it is splitting with a global easing cycle as it waits for inflation to abate.

So today I want to look at the RBA statement, then delve into the detail from the inflation numbers and finally try to figure out what this all means.

The RBA last month warned the rapid rise in government outlays was one of the factors prolonging high inflation. The bank’s statement was a political headache for Dr Chalmers, and Ms Bullock subsequently softened the central bank’s stance, saying government spending was not the “main game” for inflation.

At the federal level, government spending on childcare, aged care and disability care surged by more than 20 per cent over the past year, while spending on public servant wages jumped 14.5 per cent. Spending on the NDIS has been a major driver of the explosion in government spending. The scheme, which is forecast to cost $49 billion this financial year, is growing at about 20 per cent per year and is on track to cost more than the age pension within a decade.

Since the 2019 calendar year, the underlying cost base in the construction sector has grown by a whopping 36 per cent, compared to around 21 per cent in the non-mining market sector as a whole.

As the public sector expands, productivity growth would temporarily slow as more resources poured into sectors such as healthcare and education, where productivity is about one-third lower than the private sector.

We also can receive bitcoins at: 13zBL1oRib9VJu8Uc9zUGNhxKDBBgUpDN1

Please share this post to help to spread the word about the state of things....

Caveat Emptor! Note: this is NOT financial or property advice!!

🚨BEWARE OF SCAMMERS🚨

As there are accounts impersonating Walk The World in the comments on YouTube, note that our comments will have a distinguishable verified symbol. And remember that we will never message you asking you to give us money or talk to us on other platforms such as WhatsApp or Telegram

[Andre_XX]

If inflation was really in line with ABS figures, people would not be in such financial stress as we actually see.

[simpsonporter]

Ultimate was in Martin’s final line “unless productivity improves, this process could go on for a whole lot longer”. Well said Martin, they are kicking the can down the road, yet again!

[frederickfred]

And fiat currency is all about transferring wealth from the productive economy to those who control the financial economy..

[ananthkumar]

So, the tax payers are paying her to do absolutely nothing!!!! I'd like that job thanks

[MrRatclima]

Why do they never mention "money printimg?"

[briannewman]

Will they wait until US rates fall below Australian rates before they move?

[markmps]

Since when has the inflation target been 2 - 3 percent? Seems to me that the goalpost has been moved.
Also, isn't 2 percent meant to be the "average" target? Hence they should be targeting well under 2 percent for years to bring the average back in line?... Fat chance right...

[tonykennedy]

Perhaps the government should bring in a UBI program to help with Government is a curse. Why does currency need to be borrowed at interest when a country can simply spend it into existence through a central bank as long as it is backed by labour thus negating/limiting inflationary forces?

[frederickfred]

Fiat currency is all about politics..one cannot exist without the other..

[peterburke]

Just checked the gold price...3900 ...oh dear.

[Bobafea]

Thank you, Martin. Excellent analysis.

[Monsagen]

Yes like are we really a developed country?

[jessekoch]

Good on you Martin. Always more to unpack than reason will allow. I see the EU is on a downward spiral over migration with four countries closing borders now, because of everything you just mentioned. When is our backyard going to be protected?

[laszlon.]

Great vlog Martin, appreciate all your effort.

[brucewayne]

Inflation masks lack of productivity imagine a company that makes 10 widgets per day at a cost of $10 each. If inflation causes the price of widgets to rise to $12 each, the company's revenue will increase, even if it's still producing the same number of widgets. On the surface, this might look like economic growth, but in reality, the company's productivity hasn't actually improved. RBA is really about robbing us...

[mylimomelbourne]

Are energy prices in direct competition with Australian retail electricity prices, could EV’s be the reason energy prices are dropping? Could EV’s turn oil manufactured prices into salt ? … pretty obvious

[brucewayne]

Inflation is another form of tax... When the government prints more money to fund its activities, it can lead to inflation, which reduces the purchasing power of each individual dollar. In a sense, this is like a hidden tax, because it reduces the value of people's savings and makes it more expensive for them to buy goods and services. RBA should be keeping Inflation under 1 percent so it doesn't get out of control.

[advdad]

Can the ABS be reported for “Misinformation”?

[mitchkan]

Job keeper cliff, mortgage holiday cliff, mortgage cliff, higher for longer. ..martin you are bloody hopeless.