1 00:00:00,240 --> 00:00:02,719 Speaker 1: This podcast was recorded on the land of the Gatigel 2 00:00:02,720 --> 00:00:04,080 Speaker 1: people of the Eur Nation. 3 00:00:08,200 --> 00:00:11,480 Speaker 2: Hello and welcome to another edition of the Real Story 4 00:00:11,520 --> 00:00:15,200 Speaker 2: with Joe Hildebrand. I'm Joe Hildebrand, and the Real Story 5 00:00:15,240 --> 00:00:20,360 Speaker 2: this week is It's over finally, the economic crisis, the 6 00:00:20,400 --> 00:00:24,640 Speaker 2: cost of living crisis, It's done, it's gone. Inflation is 7 00:00:24,720 --> 00:00:29,120 Speaker 2: back to within the RBA's target bandwidth. Have you ever 8 00:00:29,240 --> 00:00:33,840 Speaker 2: heard anyone get more emotional about the words target bandwidth 9 00:00:35,280 --> 00:00:38,839 Speaker 2: even pronounce the words target bandwidth and plus? Is the 10 00:00:38,960 --> 00:00:43,000 Speaker 2: Prime Minister seriously considering cracking down on negative gearing and 11 00:00:43,280 --> 00:00:46,479 Speaker 2: the secret indigenous shame that's literally being swept off our 12 00:00:46,520 --> 00:00:49,520 Speaker 2: streets just so we can look good for the VIPs. 13 00:00:49,560 --> 00:01:00,800 Speaker 2: All that and much much more coming up, let's take 14 00:01:00,840 --> 00:01:04,000 Speaker 2: a deep dive into whatever the f is happening in 15 00:01:04,040 --> 00:01:06,600 Speaker 2: the Australian economy. Now. It started at the beginning of 16 00:01:06,640 --> 00:01:10,240 Speaker 2: the week with inflation being stubbornly high. And this is 17 00:01:10,240 --> 00:01:12,880 Speaker 2: what the RBA Governor Michelle Bullock is talking about when 18 00:01:12,959 --> 00:01:17,440 Speaker 2: she refused to cut interest rates on Tuesday. It's not 19 00:01:17,600 --> 00:01:21,720 Speaker 2: that inflation is too high, or it's not even that 20 00:01:22,000 --> 00:01:25,280 Speaker 2: headline inflation is too high, but it's that underlying inflation 21 00:01:25,720 --> 00:01:28,200 Speaker 2: that's too high, or not even so much too high, 22 00:01:28,280 --> 00:01:31,320 Speaker 2: but just stubbornly high, you know, like a teenager. Anyway, 23 00:01:32,160 --> 00:01:36,240 Speaker 2: What is actually going on? Why are these numbers which 24 00:01:36,319 --> 00:01:39,639 Speaker 2: look on the surface to be pretty low and which 25 00:01:39,959 --> 00:01:43,120 Speaker 2: most people feel a low because you know, everyone I 26 00:01:43,200 --> 00:01:45,880 Speaker 2: speak to, everyone you probably speak to, is coppying it 27 00:01:45,880 --> 00:01:48,080 Speaker 2: in the neck, is cutting back on their spending. And 28 00:01:48,120 --> 00:01:52,120 Speaker 2: this is bringing inflation down, isn't it. Yes, it is 29 00:01:52,320 --> 00:01:55,080 Speaker 2: because the day after the Reserve Bank refused to cut 30 00:01:55,120 --> 00:01:57,680 Speaker 2: interest rate, the new inflation figure come out. It's the 31 00:01:57,760 --> 00:02:02,280 Speaker 2: lowest in three years. This is the supremer quart inflation figure, 32 00:02:02,400 --> 00:02:05,040 Speaker 2: so lowest in three years. And not only that, it 33 00:02:05,200 --> 00:02:10,680 Speaker 2: got lower every month, so June, July, August inflation got 34 00:02:10,880 --> 00:02:17,480 Speaker 2: lower and lower and lower, like a Sarah Lee cheesecake, lower, up, lower. 35 00:02:19,080 --> 00:02:22,200 Speaker 2: Now the inflation rate now, and I can tell you 36 00:02:22,840 --> 00:02:25,840 Speaker 2: PM and the government pretty happy about this, is two 37 00:02:25,880 --> 00:02:30,000 Speaker 2: point seven percent. That is within the RBA's target bandwidth 38 00:02:30,440 --> 00:02:33,160 Speaker 2: of two to three percent. In other words, the RBA 39 00:02:33,320 --> 00:02:36,160 Speaker 2: wants inflation to be higher than two percent because that 40 00:02:36,160 --> 00:02:39,600 Speaker 2: shows the economy is ticking over nicely, but lower than 41 00:02:39,600 --> 00:02:42,320 Speaker 2: three percent because if it's higher than that. It means 42 00:02:42,360 --> 00:02:44,480 Speaker 2: it's getting too hot, it's out of control. RBA has 43 00:02:44,520 --> 00:02:46,480 Speaker 2: got a jack up interest rates. I'm sure you all 44 00:02:46,520 --> 00:02:47,919 Speaker 2: know that, but I'm an art student, so I'm just 45 00:02:47,960 --> 00:02:51,600 Speaker 2: explaining it to myself. So why now that inflation is 46 00:02:51,639 --> 00:02:53,600 Speaker 2: back to where the RBA wants it to be the 47 00:02:53,680 --> 00:02:57,200 Speaker 2: lowest it's been basically since the pandemic three years ago 48 00:02:57,200 --> 00:03:00,720 Speaker 2: in two thousand and one, they're still so they're not 49 00:03:00,760 --> 00:03:03,960 Speaker 2: going to be cutting interest rates probably until at least 50 00:03:04,560 --> 00:03:07,360 Speaker 2: next year. There's a small chance maybe in December. But 51 00:03:08,480 --> 00:03:12,160 Speaker 2: Arie Governor Michelle Bullock Homie don't play that. She is 52 00:03:12,280 --> 00:03:16,200 Speaker 2: as tough as nuts. So why is this happening? Well, 53 00:03:16,240 --> 00:03:19,400 Speaker 2: according to the Daily Mail, we all know who's to blame. 54 00:03:20,080 --> 00:03:23,600 Speaker 2: It's those dirty migrants coming over to Australia and spending 55 00:03:23,639 --> 00:03:27,200 Speaker 2: all their money, putting it into our economy, just like 56 00:03:27,280 --> 00:03:29,720 Speaker 2: we asked them to, just like we want them to. Fact, 57 00:03:29,720 --> 00:03:34,320 Speaker 2: as international students, remember them, those terrible, terrible young people 58 00:03:34,600 --> 00:03:37,600 Speaker 2: coming in from all over the world, paying thousands upon 59 00:03:37,680 --> 00:03:40,280 Speaker 2: thousands upon thousands of dollars to our universities so that 60 00:03:40,680 --> 00:03:45,080 Speaker 2: local students can get their degrees. Thanks to the taxpayer, 61 00:03:45,480 --> 00:03:46,920 Speaker 2: only have to pay back a little bit of hex 62 00:03:47,000 --> 00:03:51,600 Speaker 2: later on those terrible dirty immigrants coming here causing our 63 00:03:51,680 --> 00:03:56,480 Speaker 2: high inflation. But wait, inflation's gone down. Inflation's now two 64 00:03:56,480 --> 00:03:58,320 Speaker 2: point seven percent, and that article came out before the 65 00:03:58,320 --> 00:04:00,520 Speaker 2: official figure. So I guess we should thank all the 66 00:04:00,520 --> 00:04:03,920 Speaker 2: international students, thank you migrants, thank you for helping us. 67 00:04:04,240 --> 00:04:06,440 Speaker 2: But is there actually a bit of truth in it? Well, 68 00:04:06,520 --> 00:04:08,360 Speaker 2: yes there is, and far be it from me to 69 00:04:08,360 --> 00:04:12,240 Speaker 2: ever denigrate the Great Daily Mail. But so the story 70 00:04:12,320 --> 00:04:16,120 Speaker 2: of these inflation figures is that Australian households are indeed 71 00:04:16,480 --> 00:04:18,919 Speaker 2: cutting their spending, which is exactly what the RBA is 72 00:04:19,000 --> 00:04:22,360 Speaker 2: using the sledgehammer of rate rises to force us to do. So. 73 00:04:22,400 --> 00:04:24,920 Speaker 2: It's saying, you're going to pay so much on your mortgage, 74 00:04:25,000 --> 00:04:26,840 Speaker 2: so much in interest, that you're not going to have 75 00:04:26,880 --> 00:04:29,720 Speaker 2: any money to spend anywhere else. Suffer little peasant. And 76 00:04:29,760 --> 00:04:31,520 Speaker 2: we go, okay, thank you very much. Yep, we see 77 00:04:31,520 --> 00:04:34,359 Speaker 2: the big picture, Thank you macroeconomic masters, and we have, 78 00:04:34,440 --> 00:04:38,000 Speaker 2: we've stopped spending. But of course that's not a luxury 79 00:04:38,240 --> 00:04:41,280 Speaker 2: that people who come in from overseas have. They've got 80 00:04:41,320 --> 00:04:43,359 Speaker 2: to buy food, they've got to buy their necessities, and 81 00:04:43,360 --> 00:04:45,800 Speaker 2: of course we're bringing plenty of people in. The migration 82 00:04:45,920 --> 00:04:48,159 Speaker 2: numbers are still pretty high, not quite as high as 83 00:04:48,200 --> 00:04:50,600 Speaker 2: their peak, but they're still pretty high. And that is 84 00:04:50,680 --> 00:04:53,880 Speaker 2: largely fueled by international students. And lest anyone missed my 85 00:04:53,960 --> 00:04:57,440 Speaker 2: sarcasm before, we want them to be here. Education is 86 00:04:57,480 --> 00:05:01,400 Speaker 2: Australia's third or fourth largest export, behind iron or coal, 87 00:05:01,480 --> 00:05:03,000 Speaker 2: all that stuff we dig out of the ground that 88 00:05:03,160 --> 00:05:05,280 Speaker 2: China buys, thank you very much. But in return, they 89 00:05:05,279 --> 00:05:06,799 Speaker 2: send us a lot of their young people to study 90 00:05:06,839 --> 00:05:10,160 Speaker 2: our universities and they pay shite loads of money for 91 00:05:10,240 --> 00:05:13,480 Speaker 2: the privilege, and that money goes to our higher education institutions, 92 00:05:13,520 --> 00:05:15,840 Speaker 2: and it goes into our economy and that helps the 93 00:05:15,920 --> 00:05:18,640 Speaker 2: GDP and so yes, while it may be putting upwards 94 00:05:18,680 --> 00:05:22,240 Speaker 2: pressure on inflation, it's also helping our economic growth. And 95 00:05:22,279 --> 00:05:24,760 Speaker 2: remember when everyone was bashing up the government for not 96 00:05:24,800 --> 00:05:27,239 Speaker 2: having high enough economic growth, then at the same time 97 00:05:27,400 --> 00:05:30,799 Speaker 2: bashing it up for having too much inflation. They're kind 98 00:05:30,800 --> 00:05:32,760 Speaker 2: of the same thing that kind of goes together. You 99 00:05:32,760 --> 00:05:34,680 Speaker 2: see what I'm getting that here. So that's not quite 100 00:05:34,720 --> 00:05:36,640 Speaker 2: as simple as stop all the migrants and everything. You'll 101 00:05:36,680 --> 00:05:39,200 Speaker 2: be fine, And don't get me started on the housing shortage. Anyway, 102 00:05:39,800 --> 00:05:43,279 Speaker 2: now that the inflation number has been confirmed as being 103 00:05:43,320 --> 00:05:46,240 Speaker 2: about two point seven percent or more to the point, 104 00:05:46,320 --> 00:05:50,479 Speaker 2: very specifically two point seven percent within the RBA's targeted bandwidth, 105 00:05:51,000 --> 00:05:53,480 Speaker 2: why aren't we looking at the prospect of rate cuts 106 00:05:53,839 --> 00:05:56,560 Speaker 2: sooner rather than later. Well, there are a couple of 107 00:05:56,640 --> 00:05:59,359 Speaker 2: reasons for this. One is a little bit of canes 108 00:05:59,360 --> 00:06:02,120 Speaker 2: in economics. Sorry, I said I'd make it sexy for you, 109 00:06:02,160 --> 00:06:05,280 Speaker 2: so let me try that again. One is a little 110 00:06:05,279 --> 00:06:10,720 Speaker 2: bit of a keens yer that could. And that basically 111 00:06:10,760 --> 00:06:14,720 Speaker 2: means the government is artificially is intervening the market and 112 00:06:14,839 --> 00:06:20,400 Speaker 2: artificially lowering the cost of some things, in particular one 113 00:06:20,520 --> 00:06:23,719 Speaker 2: very important thing, and that is energy. And you might 114 00:06:23,720 --> 00:06:26,039 Speaker 2: have heard on this podcast, and if you did, to 115 00:06:26,080 --> 00:06:27,320 Speaker 2: be ahead of the ball, because you would have found 116 00:06:27,320 --> 00:06:29,920 Speaker 2: out the real story already. But the way the government 117 00:06:29,960 --> 00:06:32,320 Speaker 2: has targeted its power bill relief is so that it 118 00:06:32,360 --> 00:06:34,600 Speaker 2: comes off the power bill before it gets to the consumer. 119 00:06:35,200 --> 00:06:37,920 Speaker 2: So the consumer just sees a lower power bill. It's 120 00:06:37,960 --> 00:06:40,000 Speaker 2: not like they get a voucher in their hot little 121 00:06:40,000 --> 00:06:41,400 Speaker 2: hand that they can then use to put on the 122 00:06:41,480 --> 00:06:43,400 Speaker 2: higher power bill and bring that down. So what does 123 00:06:43,400 --> 00:06:46,440 Speaker 2: that mean? That means that the price of power on 124 00:06:46,520 --> 00:06:49,919 Speaker 2: the surface looks like it's come down by whatever the 125 00:06:49,920 --> 00:06:52,440 Speaker 2: government has offset it by, in this case three hundred 126 00:06:52,440 --> 00:06:54,560 Speaker 2: bucks over the course of a year. So power prices 127 00:06:54,560 --> 00:06:56,920 Speaker 2: have come down, but that is because the government has 128 00:06:56,920 --> 00:06:59,039 Speaker 2: stepped in to make them come down, and that is 129 00:06:59,080 --> 00:07:03,640 Speaker 2: to provide for consumers, but it's also to make it 130 00:07:03,640 --> 00:07:05,920 Speaker 2: look like inflation's going down, which is what they want 131 00:07:05,960 --> 00:07:07,760 Speaker 2: and what they want to do. And RBI going to 132 00:07:07,760 --> 00:07:09,480 Speaker 2: Michelle Boll go down. No no, no, no, no, no no no. 133 00:07:09,800 --> 00:07:12,320 Speaker 2: I see what you did there. I'm not fallen for 134 00:07:12,400 --> 00:07:16,040 Speaker 2: that old chestnut. So that's one thing she's not taking 135 00:07:16,040 --> 00:07:19,360 Speaker 2: into account, which is anything where the government has artificially, 136 00:07:19,520 --> 00:07:22,040 Speaker 2: if you like, lowered the rate of inflation. The other thing, 137 00:07:22,080 --> 00:07:27,240 Speaker 2: of course, has been really really high inflation in the 138 00:07:27,240 --> 00:07:30,160 Speaker 2: most important and survey after surveys shown this, and you 139 00:07:30,160 --> 00:07:31,720 Speaker 2: don't need a survey, you can see it etched in 140 00:07:31,760 --> 00:07:36,560 Speaker 2: people's faces. But the most important and cruel feature of 141 00:07:36,600 --> 00:07:38,520 Speaker 2: the cost of living crisis, which is the cost of 142 00:07:38,520 --> 00:07:41,160 Speaker 2: housing literally just being able to find a roof over 143 00:07:41,200 --> 00:07:44,080 Speaker 2: your head and afford to keep it. And while the 144 00:07:44,160 --> 00:07:48,080 Speaker 2: two point seven percent might be the overall headline rate 145 00:07:48,120 --> 00:07:52,040 Speaker 2: of inflation when it comes to rentals, when it comes 146 00:07:52,080 --> 00:07:53,920 Speaker 2: to actually finding a place to rent, so before you're 147 00:07:53,960 --> 00:07:56,840 Speaker 2: even thinking about being able to afford to buyplace, just 148 00:07:57,040 --> 00:08:02,040 Speaker 2: the inflation for the rental itself. Good news it's come down, too. 149 00:08:02,320 --> 00:08:05,320 Speaker 2: Bad news is it's come down from seven and a 150 00:08:05,360 --> 00:08:07,880 Speaker 2: bit percent to six and a bit percent, so still 151 00:08:07,880 --> 00:08:11,840 Speaker 2: more than double the rate of inflation of everything else. 152 00:08:11,840 --> 00:08:15,920 Speaker 2: So rent is still incredibly, incredibly tight. And this, of 153 00:08:15,960 --> 00:08:18,080 Speaker 2: course is where you do get sort of legitimate sort 154 00:08:18,080 --> 00:08:19,800 Speaker 2: of arguments about, oh my god, we bring you in 155 00:08:19,800 --> 00:08:22,440 Speaker 2: too many people. Again, the number of migrants coming in 156 00:08:22,600 --> 00:08:25,200 Speaker 2: has gone down, but it's gone down from about five 157 00:08:25,280 --> 00:08:27,840 Speaker 2: hundred and seventy thousand to about five hundred and ten thousand, 158 00:08:28,040 --> 00:08:30,600 Speaker 2: so you know, there's still a lot of people coming in. 159 00:08:30,800 --> 00:08:33,240 Speaker 2: People are saying, oh, no, we can't afford to put 160 00:08:33,240 --> 00:08:35,400 Speaker 2: all these people in houses, and they're taking houses or 161 00:08:35,520 --> 00:08:38,120 Speaker 2: rooms or flats or whatever that Australians could live in. 162 00:08:39,080 --> 00:08:41,840 Speaker 2: But the problem is that we don't have enough skilled 163 00:08:41,880 --> 00:08:44,400 Speaker 2: workers in the country to build all the houses that 164 00:08:44,440 --> 00:08:47,040 Speaker 2: we need to live in ourselves, and so to bring 165 00:08:47,040 --> 00:08:49,800 Speaker 2: in the people to do that, Guess what we've got 166 00:08:49,840 --> 00:08:51,920 Speaker 2: to bring migrants we've got to bring skilled workers from 167 00:08:51,960 --> 00:08:54,000 Speaker 2: overseas so that we can build the houses. And yes, 168 00:08:54,080 --> 00:08:55,439 Speaker 2: they are going to have to live in the houses 169 00:08:55,520 --> 00:08:58,520 Speaker 2: or somewhere at least while they're building them. So where 170 00:08:58,559 --> 00:09:02,040 Speaker 2: are they going to live? Well, this brings us to 171 00:09:02,080 --> 00:09:11,680 Speaker 2: the next big story of the week. Yes, and just 172 00:09:11,720 --> 00:09:14,120 Speaker 2: when you thought that, like work choices, it was dead, 173 00:09:14,280 --> 00:09:19,600 Speaker 2: buried and cremated, negative gearing rises from the ashes phoenix 174 00:09:19,800 --> 00:09:23,559 Speaker 2: like to rear its ugly head in the Australian political landscape. 175 00:09:23,840 --> 00:09:26,920 Speaker 2: Though not actually negative gearing itself, but changes to negative 176 00:09:26,960 --> 00:09:31,000 Speaker 2: gearing eliminating negative gearing. Now, what is negative gearing? People 177 00:09:31,040 --> 00:09:36,640 Speaker 2: bandied around. They bandied around almost like target bandwidth. Negative gearing. 178 00:09:37,000 --> 00:09:40,559 Speaker 2: Is this weird, weird feature of the Australian property market. 179 00:09:40,559 --> 00:09:42,880 Speaker 2: I don't think it exists in the same form pretty 180 00:09:42,920 --> 00:09:44,880 Speaker 2: much anywhere else in the world. And if you were 181 00:09:44,920 --> 00:09:49,720 Speaker 2: designing a tax system today or designing a housing market today, 182 00:09:50,000 --> 00:09:51,720 Speaker 2: you would not touch this thing with the barge pot. 183 00:09:51,760 --> 00:09:53,240 Speaker 2: It was never even meant to be here. It's like 184 00:09:53,280 --> 00:09:56,280 Speaker 2: the HouseGuest that no one invited and now refuses to leave. 185 00:09:56,480 --> 00:09:59,360 Speaker 2: But as my mum's special friend Don said, when he 186 00:09:59,360 --> 00:10:01,200 Speaker 2: didn't want to make two trips into town to have 187 00:10:01,240 --> 00:10:05,760 Speaker 2: the dog put down. Chris, we're here now, and we're 188 00:10:05,760 --> 00:10:09,320 Speaker 2: here now. Negative gearing is baked into the Australian economy, 189 00:10:09,320 --> 00:10:12,080 Speaker 2: it is baked into the Australian housing market, and it 190 00:10:12,160 --> 00:10:17,400 Speaker 2: is baked into many normal, everyday people's aspirations. The people 191 00:10:17,480 --> 00:10:21,400 Speaker 2: I know who are most negatively geared, aren't, you know, 192 00:10:21,559 --> 00:10:25,600 Speaker 2: high flying lawyers or bankers or doctors or whatever, And 193 00:10:25,679 --> 00:10:27,400 Speaker 2: not me. I don't. I have one house and I'm 194 00:10:27,400 --> 00:10:29,600 Speaker 2: struggling to pay for that. I don't got no room, 195 00:10:29,720 --> 00:10:32,559 Speaker 2: no money, no nothing for another one. But the people 196 00:10:32,600 --> 00:10:36,560 Speaker 2: I know who have used this is basically their their 197 00:10:36,320 --> 00:10:41,240 Speaker 2: their future, their nest egg, their retirement strategy. They are 198 00:10:41,240 --> 00:10:44,720 Speaker 2: a couple, they're both cops. You don't get more blue 199 00:10:44,720 --> 00:10:50,040 Speaker 2: collar than that. Their collars are literally blue working class people, 200 00:10:50,960 --> 00:10:54,160 Speaker 2: few kids, and they're buying their leverage to the hilts. 201 00:10:54,160 --> 00:10:56,640 Speaker 2: They've got no money in the bank. They're negative and 202 00:10:56,679 --> 00:10:59,800 Speaker 2: they're using negative gear to provide security for themselves and 203 00:10:59,800 --> 00:11:03,520 Speaker 2: their kids down the track. Okay, so they're aspirational. They're 204 00:11:03,559 --> 00:11:08,080 Speaker 2: far from flush or rich, don't come from money. They're 205 00:11:08,160 --> 00:11:09,680 Speaker 2: using this to build their way up in the world. 206 00:11:09,720 --> 00:11:13,400 Speaker 2: So these are the sort of people that this, uh, 207 00:11:13,440 --> 00:11:17,520 Speaker 2: these changes that are being mooted could affect. So firstly, 208 00:11:17,559 --> 00:11:19,440 Speaker 2: what is negative gearing and what are the changes that 209 00:11:19,440 --> 00:11:21,960 Speaker 2: are being mooted. Well, negative gearing is a deal that 210 00:11:22,040 --> 00:11:24,640 Speaker 2: was put forward young ago to encourage investment in the 211 00:11:24,640 --> 00:11:28,320 Speaker 2: stock market. Basically, it was to encourage investment in stocks 212 00:11:28,320 --> 00:11:31,280 Speaker 2: and shares so that you know, everyone would become part 213 00:11:31,320 --> 00:11:33,760 Speaker 2: of the great sort of Australian economy and yay for 214 00:11:33,840 --> 00:11:36,360 Speaker 2: capitalism and usually get a better return than you would 215 00:11:36,360 --> 00:11:37,720 Speaker 2: if it was just sitting in the bank. And the 216 00:11:37,760 --> 00:11:40,680 Speaker 2: money's out there in the economy doing something. It's improving 217 00:11:40,720 --> 00:11:43,360 Speaker 2: GDP and that's going to grow the economy and that 218 00:11:43,440 --> 00:11:45,880 Speaker 2: means more stuff for all of us and wealthier Australia 219 00:11:45,920 --> 00:11:49,040 Speaker 2: and yah yah yah, yeah, yah yay, everybody hold hands 220 00:11:49,080 --> 00:11:52,160 Speaker 2: and sing Kumbai yah. Fantastic right. And so to encourage 221 00:11:52,160 --> 00:11:55,480 Speaker 2: this investment, the government said, look, any interest you pay 222 00:11:56,440 --> 00:11:59,720 Speaker 2: on money that you borrow to invest, you can write 223 00:11:59,720 --> 00:12:03,800 Speaker 2: off your tax. So you can just subtract whatever interest 224 00:12:03,840 --> 00:12:06,400 Speaker 2: you have to pay on whatever you borrow to invest, 225 00:12:06,720 --> 00:12:09,679 Speaker 2: you can subtract that from your taxable income. Okay, all 226 00:12:09,679 --> 00:12:11,400 Speaker 2: well and good, We're encouraging people to get into the 227 00:12:11,400 --> 00:12:13,600 Speaker 2: stock market, getting on the ground floor, and you know, 228 00:12:14,200 --> 00:12:17,000 Speaker 2: get the country moving, get the economy rolling around in 229 00:12:17,040 --> 00:12:20,199 Speaker 2: the hay. Fantastic. So people did that. But then one 230 00:12:20,240 --> 00:12:24,680 Speaker 2: little bright spark somewhere tragically will probably never know their name, 231 00:12:24,800 --> 00:12:28,160 Speaker 2: but an accountant said, hang on a minute, if we 232 00:12:28,240 --> 00:12:31,960 Speaker 2: can claim all the interest we pay on loans that 233 00:12:32,040 --> 00:12:35,280 Speaker 2: we borrow for an investment. That doesn't have to be 234 00:12:35,320 --> 00:12:37,560 Speaker 2: an investment in the share market. That could be an 235 00:12:37,559 --> 00:12:40,200 Speaker 2: investment anyway, couldn't it. It could be an investment property. 236 00:12:40,520 --> 00:12:42,720 Speaker 2: And so suddenly all these people start jumping on the 237 00:12:42,760 --> 00:12:46,040 Speaker 2: bandwagon and they're claiming the interest that they have to 238 00:12:46,080 --> 00:12:50,560 Speaker 2: pay on their loans against their tax for housing. And 239 00:12:50,600 --> 00:12:53,480 Speaker 2: this means it's suddenly very attractive to buy a second 240 00:12:53,559 --> 00:12:57,040 Speaker 2: or a third or fourth house. And of course, then 241 00:12:57,040 --> 00:12:59,360 Speaker 2: another very clever little accountant comes up with the idea 242 00:12:59,400 --> 00:13:02,960 Speaker 2: of the only loan. So instead of paying off a 243 00:13:03,000 --> 00:13:05,920 Speaker 2: bit of the capital of the loan and a bit 244 00:13:05,960 --> 00:13:08,599 Speaker 2: of interest, they just put all the interest up the 245 00:13:08,640 --> 00:13:10,360 Speaker 2: front and you make it all interest, which means you 246 00:13:10,400 --> 00:13:12,960 Speaker 2: can claim everything you pay against your tax, and it 247 00:13:13,040 --> 00:13:15,480 Speaker 2: means that you can build up your money or your 248 00:13:15,480 --> 00:13:18,560 Speaker 2: property portfolio pretty quick and often in many cases end 249 00:13:18,679 --> 00:13:21,840 Speaker 2: up paying little or no net tax to the good 250 00:13:21,880 --> 00:13:26,440 Speaker 2: citizens of Australia, at least initially when you're buying these properties. 251 00:13:26,440 --> 00:13:28,079 Speaker 2: And of course by the time you do get to 252 00:13:28,080 --> 00:13:29,520 Speaker 2: the bit where you're paying off the principle of the 253 00:13:29,520 --> 00:13:31,760 Speaker 2: loan which you can't claim on your tax, that property 254 00:13:31,800 --> 00:13:33,600 Speaker 2: is now rocket up in value and you can sell 255 00:13:33,640 --> 00:13:36,960 Speaker 2: it to some poor, unsuspecting twenty five year old just 256 00:13:37,000 --> 00:13:39,319 Speaker 2: trying to start out with his girlfriend life and little 257 00:13:39,320 --> 00:13:41,679 Speaker 2: dog called Spot and they're paying a billion bucks but 258 00:13:41,720 --> 00:13:44,120 Speaker 2: they've got twenty grand from John Howard. Anyway, point being, 259 00:13:44,480 --> 00:13:47,920 Speaker 2: it's not really what it was meant to do. This 260 00:13:48,040 --> 00:13:50,640 Speaker 2: is not what negative gearing was actually designed for, but 261 00:13:50,720 --> 00:13:52,880 Speaker 2: it's what it's being used for, and it's here now. 262 00:13:54,200 --> 00:13:57,560 Speaker 2: And so the Left has always had its eye on 263 00:13:57,600 --> 00:13:59,840 Speaker 2: seeing this is just bollocks. It's not rational, it doesn't 264 00:13:59,840 --> 00:14:01,760 Speaker 2: make sense. What the Left, of course has never really 265 00:14:01,800 --> 00:14:04,240 Speaker 2: been very good at understanding is that what is rational 266 00:14:04,440 --> 00:14:07,640 Speaker 2: and what is popular are two very very very different things. 267 00:14:08,000 --> 00:14:11,400 Speaker 2: They've also been pretty bad historically about understanding economic forces, 268 00:14:11,440 --> 00:14:14,720 Speaker 2: which is why, as Graham Richardson family said of Gough 269 00:14:14,720 --> 00:14:18,120 Speaker 2: Whitlam always got frustrated when the economy wouldn't do what 270 00:14:18,200 --> 00:14:22,800 Speaker 2: he told it to. Anyway, there's now a suggestion from 271 00:14:23,680 --> 00:14:27,320 Speaker 2: someone within the government, some weird unnamed official, which is 272 00:14:27,360 --> 00:14:30,720 Speaker 2: quite strange because officials are meant to be bureaucrats. They're 273 00:14:30,720 --> 00:14:33,240 Speaker 2: not meant to be sort of policy decision makers, the 274 00:14:33,400 --> 00:14:36,880 Speaker 2: people who designed the policy that the politicians asked them to. Anyway, 275 00:14:36,920 --> 00:14:39,240 Speaker 2: we do seem to know that there's some kind of 276 00:14:40,360 --> 00:14:43,520 Speaker 2: modeling that's been commissioned to find out what changes could 277 00:14:43,560 --> 00:14:46,360 Speaker 2: be made to negative gearing, and this is alarmed a 278 00:14:46,400 --> 00:14:48,080 Speaker 2: whole bunch of people who say, hang on a minute, 279 00:14:48,160 --> 00:14:51,200 Speaker 2: this is the policy that cost Bill Shorten the unlosable 280 00:14:51,200 --> 00:14:54,320 Speaker 2: election in twenty nineteen. There was absolutely no way that 281 00:14:54,360 --> 00:14:57,280 Speaker 2: Bill Shorton could have lost the election to Scott Morrison, 282 00:14:57,320 --> 00:15:00,400 Speaker 2: and yet somehow Labor managed to do just that. Very 283 00:15:00,440 --> 00:15:04,280 Speaker 2: big reason why, if not the biggest reason why, was 284 00:15:04,320 --> 00:15:08,080 Speaker 2: because of the proposed cuts or changes it was making 285 00:15:08,120 --> 00:15:11,280 Speaker 2: to negative gearing, which, although weren't the end of the 286 00:15:11,280 --> 00:15:13,000 Speaker 2: world and had a whole bunch of caveats, they were 287 00:15:13,000 --> 00:15:15,440 Speaker 2: going to grandfather some stuff and if you're buying new houses, 288 00:15:15,480 --> 00:15:17,600 Speaker 2: you'd still be able to do it, and that was 289 00:15:17,640 --> 00:15:20,680 Speaker 2: meant to increase supply, but still it was enough to 290 00:15:20,720 --> 00:15:24,000 Speaker 2: scare the horses and one of, if not the major 291 00:15:24,080 --> 00:15:27,600 Speaker 2: reason Bill Shorten is not Prime Minister today. And now 292 00:15:27,680 --> 00:15:30,080 Speaker 2: Labour has reached into the back of the cupboard, dusted 293 00:15:30,120 --> 00:15:31,480 Speaker 2: it off and said, oh, I wonder if this thing 294 00:15:31,520 --> 00:15:34,040 Speaker 2: still goes And that's what's got a lot of people 295 00:15:34,160 --> 00:15:38,440 Speaker 2: very very nervous again, not because the policy is irrational 296 00:15:38,920 --> 00:15:43,800 Speaker 2: or because it is bad, but because it looks bad. 297 00:15:44,120 --> 00:15:46,280 Speaker 2: It sends a bad signal. It makes it look like 298 00:15:46,360 --> 00:15:50,680 Speaker 2: the Labor Party is against aspiration, against middle class people 299 00:15:50,760 --> 00:15:53,160 Speaker 2: getting ahead. It makes it look like it's part of 300 00:15:53,200 --> 00:15:56,600 Speaker 2: class war that wants to tear down the rich. It's 301 00:15:56,720 --> 00:15:58,080 Speaker 2: just not a good look, and it's not a good 302 00:15:58,080 --> 00:16:01,800 Speaker 2: look when the business community and the government not exactly 303 00:16:01,840 --> 00:16:05,400 Speaker 2: the best of friends at the moment. So people I've 304 00:16:05,400 --> 00:16:07,400 Speaker 2: spoken to doing the government have been very ambivalent or 305 00:16:07,480 --> 00:16:10,040 Speaker 2: very coy about what they're doing. A lot of them 306 00:16:10,040 --> 00:16:12,720 Speaker 2: obviously will be thinking that it's just like the tax cuts. 307 00:16:12,760 --> 00:16:16,520 Speaker 2: We broke that promise and everyone loved it. But it's 308 00:16:16,600 --> 00:16:19,600 Speaker 2: not just like the tax cuts because the tax cuts 309 00:16:20,000 --> 00:16:22,840 Speaker 2: took a bit of money from people who were getting 310 00:16:22,920 --> 00:16:26,360 Speaker 2: a lot, and they still got some, and all that 311 00:16:26,440 --> 00:16:28,160 Speaker 2: money then went to people who weren't going to get 312 00:16:28,280 --> 00:16:31,280 Speaker 2: very much or any at all, And so instantly you 313 00:16:31,360 --> 00:16:34,920 Speaker 2: had about eighty to ninety percent of people instantly getting 314 00:16:34,960 --> 00:16:37,480 Speaker 2: money when they weren't going to get that money. They're going, hey, 315 00:16:38,120 --> 00:16:40,640 Speaker 2: that's a pretty good idea, thank you very much. And 316 00:16:40,680 --> 00:16:43,640 Speaker 2: the people who were losing that extra bit of tax 317 00:16:43,840 --> 00:16:46,320 Speaker 2: but were still getting a tax cut anyway, their voices 318 00:16:46,400 --> 00:16:48,240 Speaker 2: kind of got drowned out, and everyone on that side 319 00:16:48,240 --> 00:16:50,640 Speaker 2: of the ledger realized pretty quickly that it wasn't a 320 00:16:50,680 --> 00:16:52,200 Speaker 2: good look for them to be telling people who were 321 00:16:52,240 --> 00:16:53,880 Speaker 2: at a tenth of their income that they couldn't get 322 00:16:53,880 --> 00:16:55,960 Speaker 2: a tax cut because they'd been waiting so long for theirs. 323 00:16:56,480 --> 00:16:58,840 Speaker 2: The difference with the negative gearing changes is that even 324 00:16:58,920 --> 00:17:01,840 Speaker 2: if down the track they make it easier for a 325 00:17:01,880 --> 00:17:07,120 Speaker 2: first home buyer to buy their first home, that first 326 00:17:07,200 --> 00:17:09,840 Speaker 2: home buyer is not going to then jump in a 327 00:17:09,880 --> 00:17:14,399 Speaker 2: time machine travel back to twenty twenty five and vote 328 00:17:14,400 --> 00:17:18,560 Speaker 2: for the Albanese government at the next election. So you'll 329 00:17:18,600 --> 00:17:20,840 Speaker 2: be taking something away from a whole bunch of people 330 00:17:20,840 --> 00:17:23,360 Speaker 2: who are using it to secure their future. Making them very, 331 00:17:23,440 --> 00:17:25,480 Speaker 2: very angry. A lot of these people are probably quite 332 00:17:25,480 --> 00:17:28,320 Speaker 2: important people. They'd be captains of industry, they'd be dare 333 00:17:28,359 --> 00:17:32,119 Speaker 2: I say it, politicians, few of them with investment properties, 334 00:17:32,480 --> 00:17:35,440 Speaker 2: and you'd be making them all upset. Well. At the 335 00:17:35,480 --> 00:17:37,560 Speaker 2: same time, the people who would reap the benefits wouldn't 336 00:17:37,560 --> 00:17:41,000 Speaker 2: be reaping the benefits for months or years to come. 337 00:17:41,960 --> 00:17:51,560 Speaker 2: So pretty politically crazy. If you ask me. Speaking of crazy, 338 00:17:51,640 --> 00:17:54,359 Speaker 2: I want to take you just briefly to the beautiful 339 00:17:54,400 --> 00:17:58,119 Speaker 2: suburb of Unley in Adelaide. It's a great little place. 340 00:17:58,880 --> 00:18:01,919 Speaker 2: Julie Guide went to school there, incidentally, only High. Being 341 00:18:02,000 --> 00:18:05,840 Speaker 2: to only High. Myself walk through those hallowed halls, sadly 342 00:18:05,880 --> 00:18:08,679 Speaker 2: didn't get a scholarship, but I was in my thirties 343 00:18:08,720 --> 00:18:10,840 Speaker 2: at the time, so I guess they had their reasons. 344 00:18:11,080 --> 00:18:13,199 Speaker 2: But Unly Counsel has done a very strange thing. It's 345 00:18:13,240 --> 00:18:15,520 Speaker 2: done a couple of very strange things. Actually, only Council 346 00:18:15,800 --> 00:18:19,560 Speaker 2: decided to change the date of Australia Day from January 347 00:18:19,680 --> 00:18:25,479 Speaker 2: twenty sixth to January twenty fifth. It then held a 348 00:18:25,640 --> 00:18:30,920 Speaker 2: survey of its residents, and that survey found that sixty 349 00:18:30,960 --> 00:18:34,399 Speaker 2: percent of said residents, perhaps even a bit more I 350 00:18:34,440 --> 00:18:40,159 Speaker 2: believe wanted it changed back, so just to get the 351 00:18:40,760 --> 00:18:46,240 Speaker 2: order of services correct. Only Council makes the decision to 352 00:18:46,359 --> 00:18:49,120 Speaker 2: change the date of Australia Day or the Citizenship ceremonies 353 00:18:49,119 --> 00:18:52,359 Speaker 2: and all the stuff they do on that day, then 354 00:18:52,760 --> 00:18:56,600 Speaker 2: seeks consultation about it. So it first does the thing, 355 00:18:57,920 --> 00:19:04,040 Speaker 2: then it asks its reidens, it's ratepayers whether they should 356 00:19:04,119 --> 00:19:07,760 Speaker 2: have done the thing, and then finds out that the 357 00:19:07,840 --> 00:19:09,720 Speaker 2: vast majority of them say no, we didn't want you 358 00:19:09,760 --> 00:19:12,480 Speaker 2: to do that, And now they're considering changing it back, 359 00:19:14,320 --> 00:19:16,720 Speaker 2: and you imagine how that's going to go down. These 360 00:19:16,840 --> 00:19:22,240 Speaker 2: are the sort of ridiculous debates decisions that are being 361 00:19:22,320 --> 00:19:26,560 Speaker 2: made and debated all over the country every year, like clockwork, 362 00:19:26,600 --> 00:19:30,359 Speaker 2: there's a debate over Australia. But anyway, whatever, it doesn't matter. 363 00:19:30,560 --> 00:19:33,800 Speaker 2: I don't care. What I do care about is the 364 00:19:33,800 --> 00:19:36,480 Speaker 2: fact that there are two Australias. There is an indigenous 365 00:19:36,480 --> 00:19:39,719 Speaker 2: Australia and a non indigenous Australia. Not as in, there 366 00:19:39,760 --> 00:19:43,760 Speaker 2: was an indigenous Australia before January twenty sixth, seventeen eighty eight, 367 00:19:43,760 --> 00:19:45,800 Speaker 2: and then a non indigenous one afterwards. Note right here, 368 00:19:45,880 --> 00:19:48,639 Speaker 2: right now, there is a white and black Australia that 369 00:19:48,880 --> 00:19:52,680 Speaker 2: for the most part, when you're looking at Indigenous communities 370 00:19:52,680 --> 00:19:56,040 Speaker 2: in remote areas are living completely different lives. You would 371 00:19:56,040 --> 00:19:58,560 Speaker 2: not even know you're on the same planet, let alone 372 00:19:58,560 --> 00:20:02,119 Speaker 2: in the same country. And one of those places is 373 00:20:02,160 --> 00:20:04,639 Speaker 2: in itself almost on another planet. The Northern Territory is 374 00:20:04,640 --> 00:20:06,440 Speaker 2: an awesome place. I go there where nob I can, 375 00:20:06,600 --> 00:20:10,280 Speaker 2: and we now find from Stephen Rice in the Australian 376 00:20:10,440 --> 00:20:14,720 Speaker 2: Great Reporter, Absolute Legend, he has been speaking to some 377 00:20:14,840 --> 00:20:19,760 Speaker 2: Indigenous Northern Territory police officers and community ais and officers 378 00:20:20,160 --> 00:20:23,639 Speaker 2: who are blowing the whistle on the culture in the 379 00:20:23,640 --> 00:20:25,480 Speaker 2: Northern Territory Police Force. And there's been a bit of 380 00:20:25,480 --> 00:20:27,800 Speaker 2: that in the media you would have seen. But they're 381 00:20:27,840 --> 00:20:32,560 Speaker 2: saying that it's a times very racist organization. We'll see 382 00:20:32,560 --> 00:20:34,800 Speaker 2: how that plays out and if all those claims are true. 383 00:20:34,920 --> 00:20:39,240 Speaker 2: But what he has managed to extract from these whistleblowers 384 00:20:39,320 --> 00:20:41,119 Speaker 2: is that is what a lot of people in the 385 00:20:41,240 --> 00:20:44,399 Speaker 2: Territory are always suspected, which is that any time a 386 00:20:44,520 --> 00:20:48,640 Speaker 2: VP comes to town, the police will actually sweep all 387 00:20:48,840 --> 00:20:53,160 Speaker 2: the Indigenous people. Itinerant Indigenous people gets them off the streets, 388 00:20:53,200 --> 00:20:55,000 Speaker 2: so the streets look nice and clean for the VIP, 389 00:20:55,200 --> 00:20:56,879 Speaker 2: so that when they come to town, wherever it is 390 00:20:56,880 --> 00:21:00,240 Speaker 2: an Alice or dah And or Catherine, wherever everything looks nice. Look, 391 00:21:00,240 --> 00:21:03,080 Speaker 2: there's no Indigenous disadvantage here, there's no problem. Everything's great. 392 00:21:03,119 --> 00:21:06,959 Speaker 2: Look here, here's a designated delegate to say hi, and 393 00:21:06,960 --> 00:21:09,160 Speaker 2: how happy everybody is there? You go, thank you very much, 394 00:21:09,200 --> 00:21:11,640 Speaker 2: Prime Minister or your excellency or whoever it may be. 395 00:21:12,960 --> 00:21:19,880 Speaker 2: And they are literally literally sweeping this problem under the carpet. 396 00:21:20,000 --> 00:21:23,120 Speaker 2: They're hiding it from view, saying look, there's nothing to see. 397 00:21:23,160 --> 00:21:25,760 Speaker 2: And then of course everyone acts surprised when something blows 398 00:21:25,800 --> 00:21:28,800 Speaker 2: up in our screens. Oh where did that come from? Well, 399 00:21:28,800 --> 00:21:31,320 Speaker 2: anyone who knows the territory, anyone who's stuck their head 400 00:21:31,320 --> 00:21:35,679 Speaker 2: into what really happens in indigenous politics and communities, knows 401 00:21:35,720 --> 00:21:39,080 Speaker 2: where it came from. Chronic disadvantage. But instead of actually 402 00:21:39,119 --> 00:21:41,680 Speaker 2: finding ways to tackle it, instead of even acknowledging it, 403 00:21:42,080 --> 00:21:46,119 Speaker 2: we're having stupid debates about Australia Day and you wonder 404 00:21:46,160 --> 00:21:55,000 Speaker 2: why the Voice Department didn't get up. One of the 405 00:21:55,040 --> 00:21:58,240 Speaker 2: biggest stories of the week has been this revelation by 406 00:21:58,400 --> 00:22:02,200 Speaker 2: the a Triple C or allegation at least they're investigating, 407 00:22:02,240 --> 00:22:04,200 Speaker 2: and it remains to be seen whether it can be proven. 408 00:22:04,240 --> 00:22:08,679 Speaker 2: But that the big two supermarkets, Coals and Woolies, of 409 00:22:08,720 --> 00:22:12,520 Speaker 2: whom I am a loyal devotee, I'm actually a card 410 00:22:12,600 --> 00:22:16,480 Speaker 2: carrying Coals Flybys member. Let's face it, I'm there every 411 00:22:16,560 --> 00:22:19,840 Speaker 2: day just trying to ratchet up those points. Get that 412 00:22:19,920 --> 00:22:22,960 Speaker 2: cook where went to, Woolies got the Disney cards, got 413 00:22:23,000 --> 00:22:27,320 Speaker 2: the whole set. I'm all in. I'm emotionally invested. Anyway, 414 00:22:27,640 --> 00:22:30,960 Speaker 2: back to the actual story, they've been found to have 415 00:22:31,080 --> 00:22:34,000 Speaker 2: been fiddling with their prices so that when you see 416 00:22:34,040 --> 00:22:36,399 Speaker 2: a price that says, you know, locked and dropped or 417 00:22:36,600 --> 00:22:39,320 Speaker 2: down down, that it's actually a price that they have 418 00:22:39,560 --> 00:22:43,200 Speaker 2: artificially inflated or maybe inflated for very good reasons because 419 00:22:43,200 --> 00:22:46,680 Speaker 2: of supply chain shortages and consumer demand for about I 420 00:22:46,720 --> 00:22:49,240 Speaker 2: don't know, three weeks or so, and then suddenly cut 421 00:22:49,280 --> 00:22:52,960 Speaker 2: it to less than the upper level that they'd inflated 422 00:22:52,960 --> 00:22:55,160 Speaker 2: it to, but more than it was in the first place. 423 00:22:55,280 --> 00:22:58,439 Speaker 2: You're following me here, we're going through the looking glass people, 424 00:22:58,880 --> 00:23:03,080 Speaker 2: And so they actually present a higher price as being 425 00:23:03,240 --> 00:23:05,560 Speaker 2: a lower price, because even though it's lower than the 426 00:23:05,560 --> 00:23:10,080 Speaker 2: temporary spike. It's higher than what the product used to be. Now, 427 00:23:10,080 --> 00:23:12,280 Speaker 2: if you are still scratching your head and going what 428 00:23:12,320 --> 00:23:14,400 Speaker 2: the hell is going on here, don't worry. You're not alone. 429 00:23:14,440 --> 00:23:16,760 Speaker 2: I've got an expert with me to talk us through it. 430 00:23:17,040 --> 00:23:19,440 Speaker 2: Her name is Jean Marie Patterson. She's a law professor 431 00:23:19,480 --> 00:23:22,160 Speaker 2: from the University of Melbourne, and she joins me right 432 00:23:22,200 --> 00:23:24,199 Speaker 2: now on the Real Story today. Jennie, how are you. 433 00:23:24,480 --> 00:23:26,040 Speaker 3: I'm well, Thank you now. 434 00:23:26,480 --> 00:23:30,000 Speaker 2: Apologies for my emotional breakdown. But I love supermarkets. There's 435 00:23:30,000 --> 00:23:31,719 Speaker 2: something in my blood about it. I end up at 436 00:23:31,720 --> 00:23:34,639 Speaker 2: them pretty much every day. I'm always buying something, I've 437 00:23:34,680 --> 00:23:37,600 Speaker 2: always forgotten something, I'm always going back. I've since become 438 00:23:37,640 --> 00:23:42,200 Speaker 2: obsessed with especially the Col's Flybys program, because someone gave 439 00:23:42,280 --> 00:23:46,040 Speaker 2: me a Virgin Velocity card and now I'm desperately scared. 440 00:23:46,080 --> 00:23:49,919 Speaker 2: I have status anxiety. I'm worried about losing my points. 441 00:23:49,960 --> 00:23:52,080 Speaker 2: I'm already gone from gold to silver. I can't go 442 00:23:52,160 --> 00:23:55,520 Speaker 2: back to bronze. I can't, I won't. And this seems 443 00:23:55,520 --> 00:23:59,119 Speaker 2: to me like it's quite a I don't know, is 444 00:23:59,119 --> 00:24:01,440 Speaker 2: it too strong to say, say betrayal of trust? 445 00:24:01,920 --> 00:24:04,000 Speaker 3: Oh? I think it's a betrayal of trust. 446 00:24:04,920 --> 00:24:09,560 Speaker 1: Actually, for precisely the reasons you say, I'm a busy mother. 447 00:24:09,760 --> 00:24:11,919 Speaker 3: I go to the supermarket. I shop quickly. 448 00:24:12,080 --> 00:24:15,280 Speaker 1: I look at the tags, so if I see something 449 00:24:15,280 --> 00:24:18,919 Speaker 1: that says discount, I don't get my calculator out and 450 00:24:19,040 --> 00:24:21,080 Speaker 1: think back to what I paid three weeks ago. 451 00:24:21,240 --> 00:24:23,600 Speaker 3: I suppose I don't get out my laptop computer and 452 00:24:23,600 --> 00:24:24,200 Speaker 3: think about what. 453 00:24:24,160 --> 00:24:27,480 Speaker 1: I paid three weeks ago and then compare the discount. 454 00:24:27,560 --> 00:24:29,280 Speaker 3: I assume it's a real discount. 455 00:24:29,800 --> 00:24:33,000 Speaker 2: And I'm also one of those people who and I'm 456 00:24:33,280 --> 00:24:36,360 Speaker 2: very lucky now, but I'm not pretending I'm crying poor now. 457 00:24:36,400 --> 00:24:37,919 Speaker 2: But I did grow up poor. I grew up in 458 00:24:38,080 --> 00:24:41,760 Speaker 2: dan and On. And you know, my mum once made 459 00:24:41,760 --> 00:24:44,560 Speaker 2: me take a bag of lemons back to the supermarket 460 00:24:44,720 --> 00:24:46,800 Speaker 2: just because I'd paid too much money for them. She 461 00:24:46,840 --> 00:24:49,040 Speaker 2: just didn't like the stick a price. So now I've 462 00:24:49,040 --> 00:24:51,760 Speaker 2: got all my sort of emotional childhood baggage out of 463 00:24:51,760 --> 00:24:54,359 Speaker 2: the way. Let's just get into the sort of the 464 00:24:54,440 --> 00:24:59,359 Speaker 2: nuts and bolts of what of where it stands, and 465 00:24:59,400 --> 00:25:02,040 Speaker 2: perhaps even how this came about. Firstly, is there in 466 00:25:02,080 --> 00:25:07,760 Speaker 2: your mind any plausible explanation for all these products going 467 00:25:07,880 --> 00:25:12,040 Speaker 2: up in price? Very suddenly, and by quite a lot 468 00:25:12,280 --> 00:25:14,600 Speaker 2: for a very short period of time. Is it possible 469 00:25:14,600 --> 00:25:18,520 Speaker 2: that this all these different spikes were caused by you know, 470 00:25:18,800 --> 00:25:22,720 Speaker 2: one off, one off events or supply chain problems and 471 00:25:22,760 --> 00:25:26,360 Speaker 2: the supermarkets are actually being perfectly honest. 472 00:25:26,840 --> 00:25:30,000 Speaker 1: Of course, it's possible, And I haven't seen all the 473 00:25:30,080 --> 00:25:34,560 Speaker 1: data that the A troop will seek collected that, but 474 00:25:35,000 --> 00:25:37,679 Speaker 1: the A troop will sees alleging this conduct occurred in 475 00:25:37,720 --> 00:25:40,159 Speaker 1: the case of wus so across two hundred and sixty 476 00:25:40,160 --> 00:25:44,159 Speaker 1: six products across twenty months and two hundred and forty 477 00:25:44,200 --> 00:25:48,119 Speaker 1: five products for coals across fifteen months, So it's not 478 00:25:48,560 --> 00:25:51,919 Speaker 1: a couple of products now and then it's a fairly 479 00:25:52,080 --> 00:25:54,639 Speaker 1: sustained pattern of events. 480 00:25:55,040 --> 00:25:57,240 Speaker 2: It was Oscar will as Lady Bracknell said, to lose 481 00:25:57,280 --> 00:26:00,400 Speaker 2: one parent as a misfortune, to lose two looks like carelessness. 482 00:26:00,720 --> 00:26:04,800 Speaker 2: And we are dealing with approximately five hundred products across 483 00:26:05,000 --> 00:26:09,159 Speaker 2: the two main supermarket companies, so it would be a 484 00:26:09,160 --> 00:26:13,199 Speaker 2: lot of I suppose one off incidental price spikes in 485 00:26:13,280 --> 00:26:16,840 Speaker 2: the supply chain. We're talking about Coles and Woolies here. 486 00:26:16,880 --> 00:26:19,840 Speaker 2: Now we know that these guys aren't necessarily the best 487 00:26:19,840 --> 00:26:21,840 Speaker 2: of friends. Although some people might accuse them of being 488 00:26:21,840 --> 00:26:26,240 Speaker 2: a duopoly. But it's passing strange that the two bigger 489 00:26:26,320 --> 00:26:32,320 Speaker 2: supermarket chains, if the Triple C's allegations are to be believed, 490 00:26:32,920 --> 00:26:36,320 Speaker 2: have been doing the exact same thing in the exact 491 00:26:36,320 --> 00:26:41,000 Speaker 2: same way, on the exact same type of products, which 492 00:26:41,240 --> 00:26:45,080 Speaker 2: seems again to suggest dare I say it far be 493 00:26:45,160 --> 00:26:47,920 Speaker 2: it from me to spout a conspiracy theory that perhaps 494 00:26:47,960 --> 00:26:51,159 Speaker 2: these are not kind of organic market forces at play. 495 00:26:52,119 --> 00:26:56,000 Speaker 1: Well, yeah, I mean they're different products in both case, 496 00:26:56,440 --> 00:26:59,000 Speaker 1: but both supermarkets seem to have been doing it. Now, 497 00:26:59,040 --> 00:27:02,040 Speaker 1: the atri Will C has clear that they're not alleging 498 00:27:02,080 --> 00:27:03,720 Speaker 1: collusion between the supermarkets. 499 00:27:03,720 --> 00:27:05,040 Speaker 3: They're not saying that. 500 00:27:05,359 --> 00:27:08,760 Speaker 1: But we do know that the supermarkets watch each other's prices, 501 00:27:08,800 --> 00:27:13,000 Speaker 1: and we do know that Coles had this very successful 502 00:27:13,600 --> 00:27:17,520 Speaker 1: down down campaign, so Woolworths came up with prices dropped. 503 00:27:17,760 --> 00:27:19,880 Speaker 3: So we know that they watch each other. 504 00:27:20,280 --> 00:27:21,760 Speaker 2: So you know the. 505 00:27:21,720 --> 00:27:24,240 Speaker 1: Fact that they go up and then write down, that 506 00:27:24,359 --> 00:27:26,600 Speaker 1: could well be supermarkets watching each other. 507 00:27:26,760 --> 00:27:28,600 Speaker 3: But that's not what the case is brought on. 508 00:27:28,680 --> 00:27:32,680 Speaker 1: The case is brought on both supermarkets who have engaged 509 00:27:32,720 --> 00:27:35,600 Speaker 1: in what the hble SEE says is misleading conduct. Across 510 00:27:35,600 --> 00:27:39,639 Speaker 1: this large range of products over a sustained period of time, 511 00:27:40,240 --> 00:27:44,000 Speaker 1: and Coles has come out and said, oh, well, that's 512 00:27:44,040 --> 00:27:47,320 Speaker 1: the pressure of supplier costs. Woolworst hasn't really made a 513 00:27:47,359 --> 00:27:50,000 Speaker 1: statement on that. It will be interesting to see where 514 00:27:50,040 --> 00:27:53,440 Speaker 1: both supermarkets choose to go and whether one will continue 515 00:27:53,480 --> 00:27:55,959 Speaker 1: and one will concede, or whether they'll both take this 516 00:27:55,960 --> 00:27:58,280 Speaker 1: to litigation, in which case it will take a couple 517 00:27:58,280 --> 00:28:00,000 Speaker 1: of years. 518 00:27:59,160 --> 00:28:02,280 Speaker 2: The other thing I want to ask this is, obviously, 519 00:28:02,359 --> 00:28:04,760 Speaker 2: you know, in some ways an ingenious piece of marketing, 520 00:28:05,080 --> 00:28:07,919 Speaker 2: can you talk us through, as a law professor, what 521 00:28:08,119 --> 00:28:11,200 Speaker 2: is actually illegal about it? I mean, they're saying that 522 00:28:11,320 --> 00:28:13,800 Speaker 2: the price is lower than it was on this other date, 523 00:28:14,280 --> 00:28:16,919 Speaker 2: even if that might not exactly be the sort of 524 00:28:16,920 --> 00:28:20,640 Speaker 2: spirit of the law. Technically, according to the letter of law, 525 00:28:20,720 --> 00:28:24,160 Speaker 2: they are being absolutely truthful. The prices are lower today 526 00:28:24,200 --> 00:28:26,400 Speaker 2: than they were on the date that they are specifying, 527 00:28:26,440 --> 00:28:29,200 Speaker 2: when admittedly they were higher than usual. 528 00:28:29,560 --> 00:28:32,680 Speaker 1: Yeah. So I think that's a really really important point 529 00:28:32,920 --> 00:28:38,560 Speaker 1: because technically a person who read the ticket got in 530 00:28:38,640 --> 00:28:39,560 Speaker 1: the right information. 531 00:28:39,640 --> 00:28:42,760 Speaker 3: They've got the starting price was here. 532 00:28:42,640 --> 00:28:46,320 Speaker 1: And the discounted price was there, so that the price 533 00:28:46,400 --> 00:28:49,440 Speaker 1: had started at one point gone to another the rules 534 00:28:50,040 --> 00:28:52,920 Speaker 1: or coals didn't advise that two weeks ago or twenty 535 00:28:52,920 --> 00:28:54,840 Speaker 1: weeks ago, twenty days ago the price. 536 00:28:54,600 --> 00:28:57,400 Speaker 3: Had been different. But technically, you know, they don't have to. 537 00:28:58,560 --> 00:29:02,480 Speaker 1: But our law doesn't work on a really lawyer's tricky 538 00:29:02,840 --> 00:29:06,160 Speaker 1: fine print approach, which is what we're really talking about here. 539 00:29:06,200 --> 00:29:09,680 Speaker 1: The interesting thing about the law in Australia, the Australian 540 00:29:09,720 --> 00:29:13,560 Speaker 1: consumer law, is that it has a prohibition on misleading conduct, 541 00:29:13,600 --> 00:29:18,720 Speaker 1: and misleading conduct isn't limited to was the fine print right, 542 00:29:19,240 --> 00:29:23,600 Speaker 1: It's about the impression that is created in the ordinary 543 00:29:23,720 --> 00:29:27,600 Speaker 1: and reasonable member of a target audience. So here the 544 00:29:27,640 --> 00:29:31,560 Speaker 1: target audience is supermarket shoppers. And we've got lots of 545 00:29:31,600 --> 00:29:35,120 Speaker 1: cases on supermarkets, and we've got lots of cases on advertising, 546 00:29:35,520 --> 00:29:38,160 Speaker 1: and what the courts have said is that when a 547 00:29:38,200 --> 00:29:42,120 Speaker 1: person is shopping or listening to advertising, they're not applying 548 00:29:42,160 --> 00:29:44,360 Speaker 1: the same attention to it that they would apply to 549 00:29:44,480 --> 00:29:47,320 Speaker 1: say a contract. So if you're entering into a contract 550 00:29:47,320 --> 00:29:49,440 Speaker 1: with a bank, or you're buying a house, or you're 551 00:29:49,440 --> 00:29:52,840 Speaker 1: buying a car, you know those terms and conditions that 552 00:29:52,880 --> 00:29:56,880 Speaker 1: you're presented with a really important and you probably read them, 553 00:29:56,960 --> 00:29:59,320 Speaker 1: or at least look at them carefully, but when we're 554 00:29:59,360 --> 00:30:02,640 Speaker 1: shopping or looking at advertising or marketing. 555 00:30:02,280 --> 00:30:06,240 Speaker 3: We're giving it a fleeting fleeting attention is the words 556 00:30:06,280 --> 00:30:08,400 Speaker 3: the court use, and in the. 557 00:30:08,360 --> 00:30:12,640 Speaker 1: Case of marketing, we're often caught in what the court 558 00:30:12,680 --> 00:30:15,880 Speaker 1: calls the web of deception of marketing, so we don't 559 00:30:15,920 --> 00:30:20,320 Speaker 1: have to apply the same care and the impression created 560 00:30:21,000 --> 00:30:25,840 Speaker 1: by this marking of the products as reduced at least 561 00:30:25,880 --> 00:30:29,400 Speaker 1: this is the Agriplec's argument is that it conveyed to 562 00:30:29,560 --> 00:30:31,520 Speaker 1: customers that we're getting a good deal. 563 00:30:31,720 --> 00:30:35,680 Speaker 3: This is a good deal for you, not hey, guys. 564 00:30:35,760 --> 00:30:39,200 Speaker 1: The cost of living and the cost of supply means 565 00:30:39,240 --> 00:30:44,000 Speaker 1: this product is more expensive, so consumers have led in 566 00:30:44,080 --> 00:30:46,680 Speaker 1: their impression of what they were getting and that can 567 00:30:46,720 --> 00:30:48,960 Speaker 1: be enough in Australia. 568 00:30:48,240 --> 00:30:51,640 Speaker 2: And this has prompted the Albanese government to fast track 569 00:30:52,440 --> 00:30:55,840 Speaker 2: new laws regulating the behavior about submarkets. Talk us through 570 00:30:56,200 --> 00:31:00,400 Speaker 2: how that do you think they will effectively stop this 571 00:31:00,440 --> 00:31:03,040 Speaker 2: sort of thing from happening again? Or if the laws 572 00:31:03,040 --> 00:31:05,560 Speaker 2: are already there that the HBC is using, why do 573 00:31:05,640 --> 00:31:07,680 Speaker 2: we need these new new restrictions. 574 00:31:08,120 --> 00:31:12,080 Speaker 1: Well, ideally we'd have law in place that stops this 575 00:31:12,200 --> 00:31:16,520 Speaker 1: happening rather than happening than the courts or the ablec 576 00:31:16,680 --> 00:31:18,960 Speaker 1: having to come in after the fact. There's been a 577 00:31:19,000 --> 00:31:23,560 Speaker 1: lot of concern about the duopoly of supermarkets in Australia 578 00:31:23,600 --> 00:31:26,760 Speaker 1: for a while, and many people will remember the concern 579 00:31:26,800 --> 00:31:30,720 Speaker 1: about the treatment of dairy farmers with one dollar milk 580 00:31:31,080 --> 00:31:34,000 Speaker 1: that in fact dairy farmers were being squeezed really hard 581 00:31:34,080 --> 00:31:39,120 Speaker 1: by the supermarkets. So the reforms to supermarkets are not 582 00:31:39,280 --> 00:31:43,680 Speaker 1: just about customers. They're actually also about Australian farmers and 583 00:31:43,840 --> 00:31:48,400 Speaker 1: small suppliers that don't have the bargaining power to push price, 584 00:31:48,760 --> 00:31:52,440 Speaker 1: to push for a reasonable price for their products. So 585 00:31:52,720 --> 00:31:56,520 Speaker 1: suppliers need a reasonable price for their products and consumers 586 00:31:57,000 --> 00:32:02,720 Speaker 1: need to not have price gouging, which is where the 587 00:32:02,760 --> 00:32:06,480 Speaker 1: price of the product goes up more than the increase 588 00:32:06,560 --> 00:32:08,600 Speaker 1: in the cost of supply. And that's a question that 589 00:32:08,640 --> 00:32:10,760 Speaker 1: this case actually doesn't address. 590 00:32:10,760 --> 00:32:13,360 Speaker 2: Great Jean Marie Patterson, thank you very much for joining 591 00:32:13,440 --> 00:32:14,280 Speaker 2: us on the real story. 592 00:32:14,640 --> 00:32:15,280 Speaker 3: You're welcome. 593 00:32:16,520 --> 00:32:18,840 Speaker 2: Well, that's all we have time for today. In fact, 594 00:32:18,920 --> 00:32:21,120 Speaker 2: it's far more than we actually had time for today, 595 00:32:21,160 --> 00:32:24,800 Speaker 2: which is why my lovely producer Anna is now staring 596 00:32:24,840 --> 00:32:28,720 Speaker 2: at me with the fire of a thousand suns. Thanks 597 00:32:28,760 --> 00:32:30,600 Speaker 2: for listening, and if you love what you're here, leave 598 00:32:30,600 --> 00:32:32,840 Speaker 2: at rating and review, not you anna, And if you 599 00:32:32,840 --> 00:32:34,920 Speaker 2: wanted us to cover anything on the pod, can we 600 00:32:34,920 --> 00:32:37,280 Speaker 2: please put the word cast after that, because when I 601 00:32:37,280 --> 00:32:39,280 Speaker 2: say pod, I feel like Ricardo having you with the 602 00:32:39,360 --> 00:32:42,560 Speaker 2: mid life crisis down the corridor. Okay, not wearing any 603 00:32:42,600 --> 00:32:47,120 Speaker 2: socks today. Reach out via socials, via email It's the 604 00:32:47,160 --> 00:32:50,360 Speaker 2: Real Story at novapodcast dot com dot au or you 605 00:32:50,360 --> 00:32:53,040 Speaker 2: can just anybody DM got the grand my hands at 606 00:32:53,120 --> 00:32:55,480 Speaker 2: show on the Screful brand and affortunately if you want 607 00:32:55,480 --> 00:32:57,080 Speaker 2: to view more from me and find out what's really 608 00:32:57,080 --> 00:32:58,920 Speaker 2: going on in the world. You've always reading my columns 609 00:32:59,280 --> 00:33:03,600 Speaker 2: Daily Telegram every Monday and Saturday. Thanks you coming me. 610 00:33:03,640 --> 00:33:04,440 Speaker 2: I'll see you next week.