By lifting its cash rate by 0.5 points, from 0.35% to 0.85%, the Reserve Bank has added about another $120 per month in payments for a A$500,000 mortgage.
If financial markets are to be believed, by the end of this year it will have added a total of $800 per month – and, by the end of next year, a total approaching $1,000 per month.
A recession in the US usually brings on a recession in the rest of the world, although not always in Australia.
Australia has escaped such a recession twice in the past 50 years.
We avoided the early-2000s so-called tech-wreck recession, and we avoided the so-called “great recession” during the global financial crisis.
Stand by for something “reckless and dangerous”.
The last week of campaigns used to be frantic, behind the scenes. In public, right up until the final week, the leaders would make all sorts of promises, many of them expensive, with nary a mention of the spending cuts or tax increases that would be needed to pay for them.
The Reserve Bank is pushing up interest rates to take money out of our hands.
The first increase in the current round will add about A$65 a month to the cost of paying off a $500,000 mortgage.
One of the stranger things about the Reserve Bank’s announcement of why it’s lifting interest rates by 0.25 percentage points is that it suggests inflation will come down by itself.
“A further rise in inflation is expected in the near term,” the RBA says, “but as supply-side disruptions are resolved, inflation is expected to decline back towards the target range of 2-3%.
There are four economic wildcards between now and the election, and we know exactly when each will be played.
This election will be won by the Coalition and Prime Minister Scott Morrison if the economic models perform as expected – and they usually do.
Offered a menu of issues to choose from as the most important in the May 21 election, Australia’s top economists have overwhelmingly zeroed in on one.
One of the strangest, certainly one of the hardest to justify, measures in last week’s budget was called “supporting retirees”.
A better title would have been “supercharging the wealth of those retirees who already have more than enough to live on”.
Wes Mountain/The Conversation, CC BY-ND
Labor’s Senate leadership under attack from within as three leading Senator’s are smeared in the ugliest factional fight to date from a repeat offending sub-faction of the Victorian Right. So what’s it all about and who’s involved?
Another Labor factional shitfight. What’s new eh?
Overwhelmingly, Australia’s top economists would rather the budget funds measures to cut carbon emissions than cuts income tax or company tax.
They are also dead against rumoured cuts to petrol tax and the tax on beer.
The biggest question relating to the management of the economy right now has nothing to do with next week’s budget. It has everything to do with the Reserve Bank and the board meetings that will follow it.