Australia’s cost-of-living crisis is getting worse. This week inflation surged back to 4 per cent. This is like the boss announcing he is going to cut your wage by that amount.
The skyrocketing inflation seems to be news to a hapless government that is making every wrong decision you could on the economy.
Just a month ago, the Government delivered its budget and announced that it believed inflation would continue to fall and be below 3 per cent by Christmas.
Instead, Australians now face another interest rate rise as the RBA has to desperately mop up the Government’s economic mismanagement.
The Government made much of its $300 electricity budget rebates but an interest rate rise would add almost $1000 to annual repayments on the average Australian mortgage.
The Government needs to scrap its failed budget and issue another one so that we can start the hard work of reigning in inflationary pressures.
In its first two budgets the Government has made decisions that has increased spending by $40 billion. Labor’s budgets have been the biggest spending budgets (outside of Covid-19) since Kevin Rudd’s response to the global financial crisis.
At least Kevin Rudd had the excuse of responding to a global recession. Labor has embarked on this reckless spending in the middle of a global inflation crisis.
I, and other LNP members, have been saying for over a year now that the Government’s budget strategy has been pouring fuel on an inflation fire. Our assessment has been proven correct.
But it is likely that the Government will not change course and seek to continue to play politics.
They will desperately cling to the possibility that “measured inflation” will fall in the next few months as its, and state governments’, rebates temporarily reduce the cost of power.
This is just smoke and mirrors.
The RBA confirmed at Senate estimates last month that it will “look through” the impact of any temporary government subsidy measures because they are interested in tackling long term inflationary pressures.
These energy rebates will also mean nothing if we cannot supply enough electricity anyway. This week the nation’s energy regulator has warned that we face running out of gas this winter.
Last year the Government imposed restrictions on gas producers that Lenin would have been proud of. These powers gave a Minister the power to tell business when to produce, what to produce and how much they could sell it for.
We warned that this would lead to investment in gas drying up. The Government ignored the warnings and now we will all pay for their mistakes.
The gas shortage has been exacerbated by a wind drought this winter. This means that gas power stations have had to fill more gaps than expected, drawing down gas supplies.
The folly of mortgaging our energy security to sources dependent on the weather is becoming exposed.
The higher cost of energy is flowing through to the cost of everything. Since Mr Albanese became prime minister the cost of Red Rock Deli chips are up 29 per cent, Moccona coffee is up 34 per cent and even a McDonald’s cheeseburger is up 32 per cent.
Our mad pursuit of net-zero emissions is causing the price of energy to go up. And the price of energy determines the price of almost everything, so net zero is causing inflation to go up. We should really call any further interest rate rises in response to this inflation “net-zero interest rate rises”.
No amount of government subsidies or handouts is going to fix this dire situation.
Because of this runaway inflation, the standard of living of Australians has dropped back to 2011 levels.
We have not had a recession but we have never seen this kind of reduction in living standards outside of a depression.
Australians are doing it tough. And tough times call for leaders to make tough decisions.
It is time for the Australian government to issue a budget that sets a cost of living target, not an emissions target.
