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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon, Sean Aylmer.

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Speaker 2: Good afternoon, Michael.

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Speaker 1: Sean. Today's question comes from David and he shared it

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Speaker 1: via the website. He went along to Fearandgreed dot com

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Speaker 1: dot au and he sent in his question. You can

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Speaker 1: do that also via social media by LinkedIn, also Facebook

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Speaker 1: and Instagram. Basically anyway that you can possibly get a

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Speaker 1: message to us, use that and we will deal with

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Speaker 1: it on this show. David says, long time listener to

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Speaker 1: Fear and Greed, always a great and informative start to

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Speaker 1: my day. You don't even need to butter us up, David,

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Speaker 1: in order to get us to answer your question. We

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Speaker 1: would do it anyway, but it is still very much appreciated.

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Speaker 1: I have a question for Sean and the team. I'm

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Speaker 1: assuming the team is me here. Yes, that's okay, thanks David.

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Speaker 1: With the fight against inflation, are there not more innovative

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Speaker 1: ways to reduce consumer spending compared to simply lifting interest rates?

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Speaker 1: As you have discussed many times, raising interest rates generally

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Speaker 1: only negatively impacts the spending habits of particular demographics, and

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Speaker 1: often actually benefits older generations with large savings accounts. Could

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Speaker 1: we consider raising super contribution percentages instead of interest rates.

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Speaker 1: This would reduce the amount of money people had to

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Speaker 1: spend in their day to day lives without providing a

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Speaker 1: cash boost to those older demographics. This would also potentially

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Speaker 1: reduce future government pressure on funding retirees. I like how

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Speaker 1: much thought David has put into this.

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Speaker 2: Yeah, so the answer yes, yes, yes, yes, yes. The

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Speaker 2: problem with interest rates they built everyone, and often they

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Speaker 2: built the people who can at least afford it. You know,

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Speaker 2: the first home buyer, someone's got a massive mortgage. They

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Speaker 2: don't hurt the self funded retirees. In fact, they help

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Speaker 2: them because they can put their money into turn deposits. Big,

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Speaker 2: big problem with monetary policy. The other the main method

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Speaker 2: used by the government is fiscal policy. Tax policy that

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Speaker 2: actually is much more targeted. So David's talking about superannuation

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Speaker 2: and that is an option. We have seen the superannuation

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Speaker 2: guarantee go up on July one, so in a sense

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Speaker 2: that has happened. But where it should really really work

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Speaker 2: is in tax policy. We've had all these arguments in

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Speaker 2: recent weeks about the government's federal and states spending too

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Speaker 2: much money, meaning the reserve Bank has to keep interesstrates higher.

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Speaker 2: This is exactly what David's talking about. The stuff like

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Speaker 2: let's think the Stage three tax cuts, right, they were

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Speaker 2: changed by the Albanesi government, and in the end, people

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Speaker 2: on lower incomes actually got more money, and people on

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Speaker 2: hiring incomes they got more money, but not as much

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Speaker 2: more money as they were going to get under the

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Speaker 2: original plan. So in a sense, that's an example where

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Speaker 2: tax changes is doing is redistributing that income that David's

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Speaker 2: talking about. This thing's like gains tax that hits investors

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Speaker 2: harder than people without investment home. So that probably is good.

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Speaker 2: But the GST right, I pay as much GST on

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Speaker 2: an item as David does, as you do, as someone

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Speaker 2: on a pension does, as a billionaire does. Not sure

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Speaker 2: about that one? Is that fair? Don't a super contribution?

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Speaker 2: That's David's example, great idea. It depends who's paying it. Sometimes,

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Speaker 2: you know, on July one, some of us got less

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Speaker 2: money in our paypacket because whoever's looking after your pay

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Speaker 2: Adam Lang, I hope you're listening. Whoever's looking after your

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Speaker 2: pay ended up taking out more super other people. The

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Speaker 2: employer actually just paid it so he got no difference.

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Speaker 2: So all that stuff. You know, what David's talking about

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Speaker 2: is is government policy's tax policy? What can governments do

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Speaker 2: but in super and GST to make it fairer? And

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Speaker 2: I think you've hit the nail on the head. We've

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Speaker 2: got to stop relying on interest rates. We've got to

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Speaker 2: get governments more reason and sensible about it.

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Speaker 1: I really like how much thought though David put into

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Speaker 1: his proposal, Like it's just it does just show there

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Speaker 1: are many different ways to approach this. But is there

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Speaker 1: an appetite for that or is it really just kind

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Speaker 1: of by default? It interest rates? It is, it is

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Speaker 1: the instrument through which this is controlled. Is there an

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Speaker 1: appetite for other methods? Is there an appetite for reform?

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Speaker 2: Sean, It's a good question. Is I mean, the reserve

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Speaker 2: bank doesn't get voted in, does it? Governments do harder

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Speaker 2: for them to do fiscal policy. It is a reserve

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Speaker 2: bank monetary policy, but governments are spending too much at

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Speaker 2: the moment and they should take it off the rich

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Speaker 2: and give it to the poor. And mean, I absolutely

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Speaker 2: believe that, Well, look.

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Speaker 1: We got very political there at the end, didn't we.

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Speaker 2: Oh, I'd like to do that. It's true. Well, but

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Speaker 2: this actually isn't political. It's just about the role of government.

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Speaker 2: And I'm not saying this government's better or worse than

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Speaker 2: the previous government. I'm not side with any of the

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Speaker 2: state governments. I just think governments should be more responsible

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Speaker 2: with their money, with my money because it is my money.

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Speaker 1: Oh, bringing it home strong, Sean, Alma, Well done. Thank

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Speaker 1: you David for the question, and thank you Sean for

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Speaker 1: answering it.

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Speaker 2: Thanks Michael, Thank you David. Great question, indeed it was.

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Speaker 1: Remember if you have something that you would like to know,

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Speaker 1: then please send through your question on LinkedIn or Instagram,

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Speaker 1: Facebook or at Fearandgreed dot com dot au. There may

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Speaker 1: just be a mea mug in it for you. I

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Speaker 1: just now I've kind of turned into you and Adam now, Sean,

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Speaker 1: because you guys were just kind of giving the mea

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Speaker 1: mugs away willy nilly early on, and no, they need

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Speaker 1: to be kind of prestigious kind of things. Now, I'm

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Speaker 1: just like, you want a mug, have a mug, but

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Speaker 1: you got to ask us a question first. But send

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Speaker 1: it on through Fear and Greed dot com, dot a you,

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Speaker 1: and we will pop it on the list and answer

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Speaker 1: it very soon. I'm Michael Thompson and this is ask

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Speaker 1: Fear and Greed