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Speaker 1: Cookie a good thanks mate, So I just quickly give

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Speaker 1: you a little bit of background.

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Speaker 2: Cooogie.

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Speaker 1: So Joel just did a good job.

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Speaker 3: But Koki and I go back, like to the days

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Speaker 3: when I think you were like economics editor or something

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Speaker 3: like that. Afar the Fin Review, Yes, and I used

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Speaker 3: to call the Fin Review in those days now the AFR,

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Speaker 3: and I'd say that's probably about two thousand and two,

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Speaker 3: two thousands of territory. I was a wizard of in those days.

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Speaker 3: And Stephen I'd call him Kokie. But Kookie then got

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Speaker 3: me somehow to. I did it a couple of Australian

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Speaker 3: Economic Forum debates. I remember I did one with what's

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Speaker 3: his name from Herald ros Gittens, Ross Gitten's and I

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Speaker 3: turn up and I was I was arguing something. I

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Speaker 3: think I was in the affirmative about house prices or

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Speaker 3: something of that, and Ross, of course is always in

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Speaker 3: the negative. So and Ross I turn up and like

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Speaker 3: a suit. In those days, every wore a suit. It's

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Speaker 3: quite a big economic a form full of economists and

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Speaker 3: Ross Kitten's turn up in a.

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Speaker 1: Suit with pair of san shows up bollies.

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Speaker 3: Yeah, what the hell? So we go back a long

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Speaker 3: way we've we're known some pretty weird economists and pretty

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Speaker 3: weird views out there.

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Speaker 1: He's mad on X.

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Speaker 3: Follow him on X, but don't don't hold into his

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Speaker 3: political views on X, because on X is different.

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Speaker 1: He's quite quite nearly militant labor on X.

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Speaker 2: I'm out there to make a point.

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Speaker 3: He does, but he does distir reactions. So he's not

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Speaker 3: He's not on X to me, and he's not. The

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Speaker 3: way we do our monthly or six weekly podcasts for

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Speaker 3: YBr on the Australian economy and what's going to happen

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Speaker 3: with interest rates, and today is going to be effectively

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Speaker 3: a live podcast.

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Speaker 1: We got it.

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Speaker 3: This is one of our live podcasts we're going to

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Speaker 3: put up on our on our usual platforms, and and

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Speaker 3: we've been doing that probably for about two years now.

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Speaker 1: I'd say normally we do.

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Speaker 3: It in the studio, but we just I do a

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Speaker 3: live one today because you know, there's a rate meeting

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Speaker 3: coming up and that's what we're going to talk about.

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Speaker 3: But just before we do, cookie, I just wanted to

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Speaker 3: say two things. We saw Scott McLean up here a

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Speaker 3: moment ago, and Scott told about how it's paraplegic. Scott

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Speaker 3: used to work for me many years ago and more

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Speaker 3: recently came back, which we're very happy about.

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Speaker 1: And I got a surprise.

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Speaker 3: When, you know, the guy has told me that Scott

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Speaker 3: had said he's coming back. That's one two. You see,

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Speaker 3: he's got to looks like a broken nose. It is

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Speaker 3: a broken nose. He face planted a couple of days ago,

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Speaker 3: which is, I don't think you're drunk, you deydrated and

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Speaker 3: I and I think, and I think, I have to

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Speaker 3: say that it's quite a valiant effort for him to

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Speaker 3: come to the event because his father died this week

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Speaker 3: that day, so but he still found it in himself

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Speaker 3: to come up here and do what he does. And

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Speaker 3: then I also wanted just a shout out to Jim

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Speaker 3: Ahern from JUDO because Jim also had a family member.

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Speaker 3: I think it was his sister. Where's Jim. Jim's not

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Speaker 3: in the room, maybe he's but nonetheless, Jim came anyway,

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Speaker 3: because I saw him on Tuesday. I'm pretty sure his

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Speaker 3: sister passed away literally about a couple of days after that.

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Speaker 1: So you know, we talked about Mike last night.

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Speaker 3: So you know, like this is an important family cookie

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Speaker 3: and you're part of it and having for a while. Now,

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Speaker 3: this is an important family. It's family members. We all

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Speaker 3: get together, we all rally around each other when it's important,

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Speaker 3: and we like to help each other and we like

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Speaker 3: to But also what's really important for us as the

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Speaker 3: family members is to see the resilience of individuals like

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Speaker 3: Scottie and Michael and everyone else. How you all, and

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Speaker 3: I'm sure there's a million other stories out there sitting

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Speaker 3: in this room, how you always back up. So that's

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Speaker 3: really important. I just want to say that because I

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Speaker 3: didn't a chance say that last night, so I appreciate

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Speaker 3: it a lot. So give you allselves around the courts.

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Speaker 2: And Gus put in their marks one second. But those

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Speaker 2: words are really powerful and they mean a lot to me.

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Speaker 2: And you know, before we get into the nitty gritty

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Speaker 2: of you know, economics and all the rest of it

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Speaker 2: and interest rates, you know, and sort of being regardless

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Speaker 2: of the election result, you know, you've got to take

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Speaker 2: a step back sometimes think, isn't Australia great. We can

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Speaker 2: have an election and you know, maybe your side didn't win,

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Speaker 2: or they did win, so and we're sort of still

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Speaker 2: here functioning normally. And you know, I feel a little

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Speaker 2: bit like the foota team. You know, so you support Sour,

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Speaker 2: I support South, you support the Roosters, you believe so

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Speaker 2: and so just because your team wins and lose, it

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Speaker 2: doesn't mean your enemies. So you can disagree on really

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Speaker 2: important things and they do matter to You're not saying

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Speaker 2: that you don't have a passion about the politics and

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Speaker 2: economics and all these other things. But at the end

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Speaker 2: of the day, we're all in this together. Australia's are

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Speaker 2: pretty bloody too. The place and mybrs are pretty a

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Speaker 2: really good place to be to be.

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Speaker 3: Part of, Thanks goods, and that probably is a good

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Speaker 3: place to start. So, you know, I was talking to

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Speaker 3: someone the other day and this particular individual, like you're,

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Speaker 3: super wealthy guy, you know, very liberal like his is

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Speaker 3: like he just can't get of his head that labor

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Speaker 3: won and won so well. And I said to him, yes,

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Speaker 3: I said, mate, you've got to get over it because

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Speaker 3: irrespective of what your view on the world, is labor

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Speaker 3: one and not only that, that one with a mandate. So

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Speaker 3: you've got to work within that environment. You're not going

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Speaker 3: to change anything. You can carry on a bitch and

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Speaker 3: moan whatever, but it's not going to do anything, and

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Speaker 3: all you're going to do is sort of put a

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Speaker 3: burden on yourself. So we all need to understand what

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Speaker 3: does it mean for our business? House prices largely demand

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Speaker 3: for houses, secondly, and affordability, which is interest rates. So

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Speaker 3: I'm gonna kick it off there, kookie, what do you

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Speaker 3: think Labor's win means.

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Speaker 1: For our market?

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Speaker 3: House prices, demand for houses, let's call it supply of

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Speaker 3: houses too, and just to be economic and also interest rates.

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Speaker 1: Yeah.

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Speaker 2: Look, there's a couple of things that in a way

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Speaker 2: later being reelected as business as usual.

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Speaker 1: We knew what they did.

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Speaker 2: And again, even if you disagreed with a few little things,

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Speaker 2: it's not catastrophic, if you know what I mean. And

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Speaker 2: in terms of the economy, and a lot of what

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Speaker 2: they're proposing in economic terms, but certainly for the housing

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Speaker 2: market is all dare I say it, and I don't

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Speaker 2: mean to be too much like an economist, but long

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Speaker 2: run issues like if they've got this plan to build

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Speaker 2: more houses, they've got a plan to allow people to

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Speaker 2: use only have a five percent deposit before they tap

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Speaker 2: into the market for the first.

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Speaker 3: Time, without loan mortgage insurance, without loan mortgage insurance, correct.

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Speaker 2: So they're effectively funding the loan mortgage.

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Speaker 1: Yeah, it's effect they're guaranteeing it. Correct.

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Speaker 2: So there's a few things like that that are happening.

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Speaker 2: And you know, when we heard Jim Charms and by

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Speaker 2: the way, that was a great interview with both Charmers

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Speaker 2: and Angus Taylor the Shadow Treasure that you did in

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Speaker 2: your podcast.

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Speaker 1: I think Jim mount shining though, but they're.

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Speaker 2: Still good to hear of. You know, some of those

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Speaker 2: things to hear about the person is really important. But

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Speaker 2: Jim sort of when he had an interview on whatever

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Speaker 2: Monday after the election, was pretty sober, if you know

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Speaker 2: what I mean. And by that I mean he said, look,

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Speaker 2: yeah we won. We're happy about that, but now we're

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Speaker 2: getting on with the job. And one of the critical

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Speaker 2: things that he's going to focus on and look, whether

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Speaker 2: he's true to his word will wait and see. I

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Speaker 2: suspect he will be. But one of the issues that's

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Speaker 2: dogged our economy for a decade, maybe even longer is

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Speaker 2: our absolutely appalling productivity.

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Speaker 1: Can you explain what we mean by products spectivity?

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Speaker 2: Yes? Yeah, because productivity sort of goes over most people said,

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Speaker 2: including mind by the way, but it's basically producing more output,

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Speaker 2: growing your economy faster with the same number of people working.

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Speaker 2: So one example can be you use machinery to do something.

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Speaker 1: You know.

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Speaker 2: So if you think about, oh, I don't know, someone

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Speaker 2: digging a hole. The foundations for a house with a

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Speaker 2: pick and shovel take you a long time. Productivity is

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Speaker 2: pretty bad. You give them a bigger you know, a

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Speaker 2: big digger machine, they can do it in a day.

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Speaker 2: So productivity is linked to sort of capital investment. It's

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Speaker 2: linked to things like the government getting the right infrastructure

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Speaker 2: so we don't run into these, oh your congestion and

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Speaker 2: all these other things which are really a drain on

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Speaker 2: the economy sitting there and it's bloody traffic, or sitting

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Speaker 2: on a train that's so and all these other things.

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Speaker 2: So enhancing that sort of infrastructure is really really important

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Speaker 2: part of it.

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Speaker 1: Skills and training.

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Speaker 2: I think that in all the conversations I've had in

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Speaker 2: recent years for any business, not just this type of business,

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Speaker 2: but whether but other retailers or it businesses, whatever, it

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Speaker 2: always comes up skilled shortages. I've got a great business idea,

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Speaker 2: I want to invest some money. I need to hire

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Speaker 2: more people. Damn it, I can't find them, so that

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Speaker 2: business thing is shelved, and so productivity, the output of

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Speaker 2: the economy is LOWD and for an economist that's really bad.

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Speaker 2: I want the economy to grow. I want everybody to

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Speaker 2: be better off in two years time than they are today.

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Speaker 2: And you do that through that point.

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Speaker 3: Where can people access how productivity is measured?

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Speaker 2: It's in the Bureau Statistics out good mats who produce

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Speaker 2: all of the almost all the data on the Australian

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Speaker 2: economy abs dot dot AU. You can see its output

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Speaker 2: per person working. And so if we've got a one

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Speaker 2: percent increase in employment in a particular year, just normal

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Speaker 2: growth and GDP the output of the economy is two percent,

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Speaker 2: then we've got a one percent lift in productivity by

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Speaker 2: that measure. And that's sort of been negative, not just flat,

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Speaker 2: but it's negative. So we're actually being less efficient and

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Speaker 2: that's what's causing This might be a way to talk

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Speaker 2: about the RBA in a sense. I know, we'll talk

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Speaker 2: about it a whole lot more a bit later, but

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Speaker 2: that's one thing that the RBA has been reluctant to

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Speaker 2: cut interest rates as aggressively as most other countries because

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Speaker 2: they're thinking that well, if our productivity is bad. What

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Speaker 2: that means is how businesses maintain their profits is putting

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Speaker 2: up their prices. What's up your prices? It's inflation because

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Speaker 2: they're not getting that. And the benefit beneficiaries of productivity

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Speaker 2: are both the business and the worker. So the business

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Speaker 2: gets bigger profits, great, the worker gets a reasonable pay rise,

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Speaker 2: so they're happy. And so that's what productivity is all about.

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Speaker 3: So let's can we just pick it apart of that

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Speaker 3: a little bit. So on an example we just gave

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Speaker 3: yep and and you did make the point that productivity

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Speaker 3: in Australia has been at its slowest for probably like

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Speaker 3: twenty odd years.

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Speaker 1: Even longer.

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Speaker 2: Mark, I think I've got to go back to eight

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Speaker 2: fifty fifty years or something.

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Speaker 3: Okay, okay, So you mentioned that if employment grows by

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Speaker 3: one percent, then GDP grows by two percent, then.

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Speaker 1: Productivity effect one percent.

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Speaker 3: So what would be considered a good productivity level? What's

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Speaker 3: a fair reasonable amount and more? And importantly, what is

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Speaker 3: the budget process when they build a budgets, what are

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Speaker 3: they looking for in terms of productivity?

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Speaker 1: In their assumptions they put.

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Speaker 2: It sounds like a really minute little change, but they

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Speaker 2: look for about one point twenty five percent annual productivity growth.

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Speaker 2: The difference between one and one point twenty five, I think, dude,

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Speaker 2: that's pretty mickey mouse, it's pretty chicken feed. But it

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Speaker 2: is actually when you compound that over the course of

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Speaker 2: five years, productivity one year can go up or down.

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Speaker 2: So don't worry about one year. It's that it's that

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Speaker 2: long run trend that's important. The budget numbers which came

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Speaker 2: out in March, when Charmers deliberedy is budget before the

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Speaker 2: election assume productivity one point twenty five and a number

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Speaker 2: of people noted that might be heroic assumption because for

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Speaker 2: the last ten years it's been basically zero. So the Treasury,

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Speaker 2: in preparing the budget numbers, are looking forward to a

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Speaker 2: rebound in that productivity. So employments, you know, we want

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Speaker 2: people to get a job. Great low and employment love it,

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Speaker 2: but we need the economy to grow faster. We need

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Speaker 2: to take away the impediments. The other thing about productivity

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Speaker 2: is tax policy, and that fawny issue because we've just

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Speaker 2: had an election campaign and the tax debate, to be blunt,

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Speaker 2: well it didn't even exist.

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Speaker 1: You know.

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Speaker 2: The Labor Party is giving two little, tiny, little tax

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Speaker 2: cuts in a year or two. The Libs are promising

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Speaker 2: a twenty five cents off a lead of petrol. You know,

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Speaker 2: you know that's not tax reform. Neither of those. We

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Speaker 2: need to actually have a few of us last night

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Speaker 2: over Abera having a chat a bit about what we do.

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Speaker 2: But the tax reform issue is really about collecting money

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Speaker 2: from taxpayers at a level that's not really an impediment

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Speaker 2: to them doing business and hiring workers to collect enough revenue.

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Speaker 2: Because the other thing about tax policy, so what does

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Speaker 2: the government want to collect tax We the electorate, you

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Speaker 2: and me, all of us who voted last weekend. We

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Speaker 2: want the government to give a decent healthcare system. We

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Speaker 2: want them to look after our aging parents and an

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Speaker 2: age care facility.

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Speaker 1: We want to drive on good roads.

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Speaker 2: We want to make sure our defense departments equipped to

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Speaker 2: protect us. You know, So the government does have a

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Speaker 2: lot of spending. It sure, they can be trimmed and

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Speaker 2: they can be spent more efficiently. Don't get me wrong,

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Speaker 2: I'm not saying that every dollar that the governments means

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Speaker 2: is perfectly spent. Far from it. But there's a core

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Speaker 2: element of what the government provides us that the private

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Speaker 2: sector wouldn't provide like the private sector can't give us

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Speaker 2: a defense force. We need the government to fund that.

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Speaker 2: So the tax has got to come from somewhere. But

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Speaker 2: the tax system right now with the GST only at

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Speaker 2: ten percent, Yeah, what have we got? The company tax

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Speaker 2: rate and you're thirty or twenty five depending how big

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Speaker 2: you are. The top marginal income tax rate with forty

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Speaker 2: seven seven forty seven, you know they're high. It'd be

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Speaker 2: nice to lower them to get a bit more competitiveness

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Speaker 2: in the economy. But if you're giving those tax cuts,

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Speaker 2: where's the money coming from, so you don't run a

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Speaker 2: massive budget deficit, so you can fund stumm services.

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Speaker 3: Seeing more productivity.

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Speaker 2: Productif it gives you that yield, it gives you, Yes,

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Speaker 2: it gives you that I call it a windfall game.

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Speaker 2: It gives you that extra cream on the cake sort

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Speaker 2: of thing.

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Speaker 3: So if you look at our productivity in one of

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Speaker 3: the resist been so low, is largely not so much

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Speaker 3: because of the unemployment number or the employment or should

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Speaker 3: say it's largely because of the DUDP number.

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Speaker 2: Yes, because denomination good employments actually quite I'm saying employee,

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Speaker 2: but we haven't we're not producing that.

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Speaker 1: Yes, yes, So if.

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Speaker 3: If you know employment's good. In other words, unemployment's quite low.

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Speaker 3: Therefore employment by definitely's pretty good. Everybody's sort of employed.

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Speaker 3: Irrespect the fact that we had a massive amount of

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Speaker 3: people coming into the country, so like something good has

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Speaker 3: happened there. That's a good thing. But therefore our GDP

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Speaker 3: is low. Maybe you could explain why do you think

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Speaker 3: GDP is low?

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Speaker 1: Then, so what is it?

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Speaker 3: That's because we know that X and M would look

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Speaker 3: quickly just dudyp is the addition. We use the expandition method.

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Speaker 3: So GDP's edition of just take through.

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Speaker 2: The output and economy in any given year. GDP economic growth.

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Speaker 2: It's consumption. So you and me when we go to

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Speaker 2: the shops, when we household consumption, household consumption, buying groceries,

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Speaker 2: buying insurance policies and whatever. Government consumption, but plass plus

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Speaker 2: plus government consumption plus investment. So when you buy a computer,

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Speaker 2: a new laptop, a machine, when BHP or RIO buy

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Speaker 2: these massive mining plant and equipment, that's I for investment,

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Speaker 2: I plus X exports because if we export stuff minus

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Speaker 2: imports because we're paying someone else because they made it.

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Speaker 2: So that's basically what GDP.

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Speaker 3: So we've been going all right on the X minus M.

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Speaker 2: Exports, we're doing pint. Yes, we're exporting a lot, importing

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Speaker 2: not so much. So we're doing really well on that correct.

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Speaker 2: And the g government spending is where there's been strength.

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Speaker 2: It is the private sector.

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Speaker 3: We just go back on government though we're talking about federal,

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Speaker 3: State and Council with all the dartment spanishes, so every

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Speaker 3: state government. So what they do they actually don't do this,

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Speaker 3: but they sort of mathematic in a quantitative sense. They

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Speaker 3: have a process that gives them a confidence level, governance

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Speaker 3: level that they're the data that they do gather every month,

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Speaker 3: every week, every day. They do it a whole lot

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Speaker 3: of different ways. But it's not actual data. Well it

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Speaker 3: is actual data, but it's sort of representative data of

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Speaker 3: the total population. So they include all government expenditure, so

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Speaker 3: gument expandages as is. Coup you just said, has been

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Speaker 3: quite high, very strong.

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Speaker 1: Extremely high, very strong.

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Speaker 2: It rose during the pandemic and for obvious reasons and

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Speaker 2: good reasons, you know, it kept our economy going well.

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Speaker 1: So good old Josh.

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Speaker 2: I've mentioned to him, well done on how he managed

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Speaker 2: the COVID pandemic. There was a bit of a pullback

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Speaker 2: because job keeper and job seeker did end, you know,

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Speaker 2: they weren't there forever. So we had that big pullback

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Speaker 2: in spinning and it came back down, and in the

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Speaker 2: last couple of years it's gone back up, not quite

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Speaker 2: to the peak that we were during the pandemic, but

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Speaker 2: it's gone back up. And a couple of things have

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Speaker 2: driven that. At the state and local level, they've felt

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Speaker 2: a need to ramp up infrastructure, which is not necessarily

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Speaker 2: a bad thing. As I said before, infrastructure is really good.

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Speaker 2: I want good transport systems good, you know, the whole

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Speaker 2: economy needs to function well. But they're doing it and

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Speaker 2: it's really really expensive. So that component's been part of

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Speaker 2: that increase. And the federal government as part of well,

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Speaker 2: as you know, they kept their promise from the twenty

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Speaker 2: twenty two election. They said they're going to provide a

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Speaker 2: nurse in every age care facility twenty four hours day,

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Speaker 2: seven days a week. That required a lot of lot

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Speaker 2: of government spending age care, healthcare, education, things like that,

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Speaker 2: which a public service job or public service jobs. Yeah,

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Speaker 2: even police force, you know, things that we think, Yeah,

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Speaker 2: I'm glad the government spending a bit of money on

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Speaker 2: those things. I am now again should what do you

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Speaker 2: want to cut if you want to get that down.

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Speaker 2: But for the moment, the government spending is quite high.

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Speaker 2: So I think we're going to be looking at, you know,

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Speaker 2: again the new government, let's talk about them. Yeah, whether

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Speaker 2: you like it or not, there the government for the

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Speaker 2: next three years. I think genuinely they're going to be

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Speaker 2: apart from that productivity idea, they're going to be looking

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Speaker 2: at these numbers. They know that what's happening, they're not silly,

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Speaker 2: and they're going to say, well, hang on and stand

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Speaker 2: and pause. The credit rating agencies came out a week

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Speaker 2: or two ago and said, oh, look we might have

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Speaker 2: to downgrade Australia's triple A credit rating, which does matter,

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Speaker 2: by the way, we can talk about that later. And

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Speaker 2: they said, oh, look, the budget position in Australia is

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Speaker 2: a little it's okay, but just watch out.

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Speaker 1: It's one of these ones.

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Speaker 2: It's a little bit of an amber light flashing. So

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Speaker 2: I think in given them mandate that the Labor Party got,

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Speaker 2: if I was advising them, i'd be saying, look, in

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Speaker 2: the next couple of months, I have a little bit

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Speaker 2: of a look at how you can trim a few

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Speaker 2: bucks here, and maybe you just dust a few policies

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Speaker 2: to make sure the budget deficit, which I think in

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Speaker 2: current estimates about thirty five billion something like that, just

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Speaker 2: trim a bit.

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Speaker 1: Of it off.

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Speaker 2: So again that's going to where they trim just to

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Speaker 2: make sure that government's spending trajectory, just tape us back.

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Speaker 1: A little bit, because if we just pull it back to.

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Speaker 2: It takes a pressure off the economy because we.

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Speaker 3: Actually have conflict here.

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Speaker 1: So on the one hand, we're trying.

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Speaker 3: To increase GDP, governments would like to see the measurement

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Speaker 3: of output and our productivity in the country to be

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Speaker 3: increased so that we can look like.

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Speaker 1: We've been so that we can sort of prove to

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Speaker 1: ourselves we're being.

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Speaker 3: More productive when based on what Stephen just said, product

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Speaker 3: productivity minus a GDP minus employment growth because cabin is

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Speaker 3: like to get a goal ticked like everybody.

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Speaker 1: They all want to be light like everybody in the world,

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Speaker 1: I guess these days.

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Speaker 3: But on the other hand, and so the reason for

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Speaker 3: that they want that government expended to increase is because

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Speaker 3: at the moment they can't rely on household consumption because

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Speaker 3: household consumption is down. And the reason you will know

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Speaker 3: the reason household consumtion is down because interest rates are up.

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Speaker 3: So and we've got the Reserve Bank saying I'm going

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Speaker 3: to keep it just rates up because I don't want

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Speaker 3: people to spend too much, because when they spend too much,

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Speaker 3: they tend to encourage vendors to put prices up. So

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Speaker 3: we've got the Reserve Bank sort of in conflict a

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Speaker 3: little bit here. But at the same time, the Reserve

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Speaker 3: Bank like to see productivity up as well, or the

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Speaker 3: measurement productivity up, And the government's saying, well, the way

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Speaker 3: we can the only way we can do it, because

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Speaker 3: you're putting interest rates up and you're keeping household consumption down.

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Speaker 3: Tell me if I'm right or wrong here. Therefore, we

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Speaker 3: the government have to push and government expandits are up

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Speaker 3: to make sure we build a nice platform for everybody

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Speaker 3: to be more efficient and have a better outcome, be

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Speaker 3: much more productive.

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Speaker 2: That's that's a lovely summary. You know, that's that is

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Speaker 2: the not a dilemma, but that is the fact.

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Speaker 3: But it's an technology.

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Speaker 2: Just look at the numbers again. You know, my job

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Speaker 2: is looking at numbers. And yeah, government demands up and

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Speaker 2: it's private sector in US householders, you and me in

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Speaker 2: the household budgets that we do every day when we

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Speaker 2: earn our pay and then go and spend a bit

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Speaker 2: of it. That's been the drag on the economy that, yeah,

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Speaker 2: we consumers, we're not done.

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Speaker 1: We're smart.

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Speaker 2: We know when our finances are under pressure.

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Speaker 1: We know that.

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Speaker 2: Well, when the inflation rate hit eight percent two years ago,

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Speaker 2: that the cost of living issues and our wages are

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Speaker 2: only going up at two percent or thereabouts, you're thinking, oh,

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Speaker 2: my god, that's a real stretch on the budget. Then

439
00:21:02,440 --> 00:21:05,879
Speaker 2: along came these interest rate hikes from twenty twenty two

440
00:21:05,960 --> 00:21:08,880
Speaker 2: through the twenty end of twenty twenty three. My god,

441
00:21:08,960 --> 00:21:11,600
Speaker 2: So even if you had a relatively modest mortgage, let

442
00:21:11,640 --> 00:21:14,280
Speaker 2: alone the folks who had a really big mortgage, we

443
00:21:14,320 --> 00:21:15,840
Speaker 2: had what was a three hundred and fifty one hundred

444
00:21:15,840 --> 00:21:18,479
Speaker 2: basis points of rate hikes passed on to mortgage holders.

445
00:21:19,000 --> 00:21:20,879
Speaker 2: So not only every day that you pay.

446
00:21:20,760 --> 00:21:24,200
Speaker 3: Your ensues one third of economy, one third of individuals

447
00:21:24,240 --> 00:21:25,320
Speaker 3: illustrati correct.

448
00:21:25,840 --> 00:21:28,040
Speaker 2: So not only were you paying more for your week

449
00:21:28,080 --> 00:21:31,560
Speaker 2: bis and your insurance premiums and you know, all of

450
00:21:31,560 --> 00:21:34,080
Speaker 2: that stuff that you buy every essential. So they're not

451
00:21:34,080 --> 00:21:37,280
Speaker 2: really luxury because you're not buying graine or dom paying on.

452
00:21:37,320 --> 00:21:39,200
Speaker 2: You know, you're just buying the essentials that you need.

453
00:21:39,880 --> 00:21:42,840
Speaker 2: Then your mortgage ry payments go up by many instance,

454
00:21:42,960 --> 00:21:45,520
Speaker 2: a couple of thousand bucks a month. Some are more,

455
00:21:45,560 --> 00:21:48,119
Speaker 2: but you know, going up by a lot of money.

456
00:21:48,119 --> 00:21:50,639
Speaker 2: And if you've got a constraint on your income, like

457
00:21:50,680 --> 00:21:54,280
Speaker 2: you've just got a regular job, two percent pay rise, whatever,

458
00:21:54,840 --> 00:21:57,719
Speaker 2: what do you do? You cut your spending elsewhere so

459
00:21:58,280 --> 00:22:00,720
Speaker 2: you maybe don't have the holiday neither you can't, but

460
00:22:00,760 --> 00:22:02,400
Speaker 2: I'll wait aye or two before I buy one.

461
00:22:02,440 --> 00:22:03,280
Speaker 1: This will do so.

462
00:22:03,560 --> 00:22:07,920
Speaker 2: And so that caused the sea consumption spending from from

463
00:22:07,960 --> 00:22:10,520
Speaker 2: the household sector to go down. And that's where the

464
00:22:10,600 --> 00:22:12,960
Speaker 2: dragon in the economy has been for the last couple

465
00:22:13,000 --> 00:22:13,800
Speaker 2: of years.

466
00:22:13,480 --> 00:22:17,000
Speaker 3: So, given that there's a conflict between sort of a

467
00:22:17,000 --> 00:22:20,520
Speaker 3: conflict between the r b A and what and what

468
00:22:20,560 --> 00:22:24,359
Speaker 3: governments are doing. And I'm not saying labor liver, just

469
00:22:24,440 --> 00:22:26,840
Speaker 3: what governments are doing, it doesn't really matter because it's

470
00:22:26,840 --> 00:22:28,920
Speaker 3: happening at state levels, et cetera. It's not just at

471
00:22:28,960 --> 00:22:32,200
Speaker 3: the federal level. It's all government expenditure. Given there is

472
00:22:32,240 --> 00:22:36,720
Speaker 3: this conflict, does Jim Chalmers go on to the OB say, listen,

473
00:22:36,800 --> 00:22:39,040
Speaker 3: let's just see I don't even have a chat. Look,

474
00:22:39,920 --> 00:22:43,920
Speaker 3: on one hand, we want to get a good dutyper outcome.

475
00:22:44,400 --> 00:22:46,760
Speaker 3: We want to see a good right now, you're killing

476
00:22:46,800 --> 00:22:49,400
Speaker 3: the economy with a high interest rates. This is sort

477
00:22:49,440 --> 00:22:51,080
Speaker 3: of the Donald Trump argument when he has a go

478
00:22:51,359 --> 00:22:54,680
Speaker 3: your own power that this is why, you know, because

479
00:22:54,680 --> 00:22:57,800
Speaker 3: people think Trump's mad, you know, they think, you know,

480
00:22:57,840 --> 00:22:59,240
Speaker 3: you can't be saying I'm going to sack your own

481
00:22:59,240 --> 00:23:02,720
Speaker 3: power and you know, rip into the federal reserve guy

482
00:23:02,920 --> 00:23:03,520
Speaker 3: in America.

483
00:23:03,760 --> 00:23:05,440
Speaker 1: It would never happen anywhere else in the world.

484
00:23:06,400 --> 00:23:10,240
Speaker 3: But Trump's point is, look, dude, we need to work

485
00:23:10,280 --> 00:23:13,560
Speaker 3: together on this stuff. Now, would Jim Charmers go and

486
00:23:13,600 --> 00:23:17,240
Speaker 3: sit and have a couple of teena Leamington with you know,

487
00:23:20,320 --> 00:23:23,560
Speaker 3: and and and sit down there with the governor, the

488
00:23:23,600 --> 00:23:26,120
Speaker 3: reservand governors just say how do we work this? Maybe

489
00:23:26,520 --> 00:23:28,320
Speaker 3: because because where I want to take this cookie too

490
00:23:28,440 --> 00:23:30,520
Speaker 3: is another level. And you and I've discussed a million

491
00:23:30,520 --> 00:23:36,000
Speaker 3: times over. We're talking about tax reform. So instead of

492
00:23:36,359 --> 00:23:42,400
Speaker 3: the reserving ripping into the borrowers and putting interest rates up,

493
00:23:44,240 --> 00:23:47,399
Speaker 3: maybe if they said, look, reserving, you don't need to

494
00:23:47,400 --> 00:23:48,239
Speaker 3: put intraates on the matter.

495
00:23:48,240 --> 00:23:49,119
Speaker 1: In fact, you can reduce them.

496
00:23:49,160 --> 00:23:51,959
Speaker 3: But what I'm going to do is the treasure I'm

497
00:23:51,960 --> 00:23:56,640
Speaker 3: going to increase juice team so that everyone's affected. Yea, Now,

498
00:23:57,320 --> 00:23:59,119
Speaker 3: can we just talk about that for a second, like

499
00:23:59,600 --> 00:24:01,239
Speaker 3: how do they do this shit or do they just

500
00:24:01,480 --> 00:24:02,800
Speaker 3: stay apart and don't talk.

501
00:24:04,520 --> 00:24:05,119
Speaker 2: They talk?

502
00:24:05,359 --> 00:24:06,040
Speaker 1: They do talk.

503
00:24:06,760 --> 00:24:08,919
Speaker 2: And the interesting thing, and I think it's actually not

504
00:24:09,000 --> 00:24:11,239
Speaker 2: a bad idea that the Treasury Secretary, the guy who

505
00:24:11,280 --> 00:24:14,840
Speaker 2: advises Jim Chalmers, Treasurer, Stephen Keen Kennedy is on the

506
00:24:14,920 --> 00:24:18,960
Speaker 2: RBA board and there are nine board members and this

507
00:24:19,119 --> 00:24:21,359
Speaker 2: new board, the new board, the Governor, the Deputy Governor,

508
00:24:21,640 --> 00:24:24,240
Speaker 2: Stephen Kennedy, and the whole lot of other academics, business people,

509
00:24:24,240 --> 00:24:29,080
Speaker 2: and a whole lot of other union people. So they

510
00:24:29,200 --> 00:24:33,120
Speaker 2: do talk. And I think that it's not quite as

511
00:24:33,480 --> 00:24:34,520
Speaker 2: direct as you said.

512
00:24:35,359 --> 00:24:37,520
Speaker 1: It's not Trumpians as much as.

513
00:24:37,400 --> 00:24:40,760
Speaker 2: It possibly could be. But if Stephen Kennedy or the

514
00:24:40,800 --> 00:24:43,639
Speaker 2: treasure on the phone to Michelle Bullock, RB Governor, Hey, Michelle,

515
00:24:43,680 --> 00:24:46,520
Speaker 2: you know, I'm about to have a budget that's going

516
00:24:46,520 --> 00:24:48,320
Speaker 2: to be trimming some spending. I'm going to take a

517
00:24:48,359 --> 00:24:52,040
Speaker 2: bit of pressure off that growth in public sector spending

518
00:24:52,040 --> 00:24:54,560
Speaker 2: that we've been talking about, and she's been talking about

519
00:24:55,440 --> 00:24:58,520
Speaker 2: which will drop GDP, will which will yeh, which will

520
00:24:58,800 --> 00:25:01,520
Speaker 2: take half a percent whatever off GDP quarter a half

521
00:25:01,600 --> 00:25:04,320
Speaker 2: percent or something like that. He won't then say, I

522
00:25:04,359 --> 00:25:09,000
Speaker 2: think you'd cut instraates because they're independent. But the messages, well,

523
00:25:09,040 --> 00:25:11,560
Speaker 2: if the government sector is pulling back from the economy

524
00:25:12,480 --> 00:25:15,520
Speaker 2: and the problem of economic growth the last couple of

525
00:25:15,600 --> 00:25:19,760
Speaker 2: years has been private sector households who are hurting under

526
00:25:19,760 --> 00:25:21,919
Speaker 2: the interest rate burden, if we can call it that.

527
00:25:23,119 --> 00:25:26,320
Speaker 2: She'll put two and two together pretty obviously and say, well, yeah,

528
00:25:26,440 --> 00:25:29,960
Speaker 2: I can with inflation in the target band, hooray, that's

529
00:25:30,000 --> 00:25:33,760
Speaker 2: good news. With the economy pretty soft, government sector pulling back,

530
00:25:34,240 --> 00:25:36,600
Speaker 2: I can afford to trim rates to get the private

531
00:25:36,640 --> 00:25:40,720
Speaker 2: sector spending again, investing again, and continuing to hire people

532
00:25:40,720 --> 00:25:42,440
Speaker 2: so the unemployment rate doesn't go up too much.

533
00:25:42,600 --> 00:25:48,480
Speaker 3: So let's talk about the next interest rate moves.

534
00:25:48,760 --> 00:25:49,960
Speaker 1: Yeah.

535
00:25:50,080 --> 00:25:53,720
Speaker 3: So Steve used to have this back in the A

536
00:25:53,840 --> 00:25:55,879
Speaker 3: five days my eyes. I love it, Like he just

537
00:25:55,960 --> 00:25:59,560
Speaker 3: had this graph and he would every month before the

538
00:25:59,640 --> 00:26:02,440
Speaker 3: RBA met, like literally a few days before probably I

539
00:26:02,520 --> 00:26:04,600
Speaker 3: coming as a Friday before the Tuesday or something like that.

540
00:26:04,920 --> 00:26:05,159
Speaker 1: I don't know.

541
00:26:05,200 --> 00:26:07,000
Speaker 3: If you remember, but I can't remember, no, but I

542
00:26:07,040 --> 00:26:09,520
Speaker 3: remember it really well because I used to text him

543
00:26:09,520 --> 00:26:11,720
Speaker 3: and stuff about it. But he would have a little

544
00:26:11,720 --> 00:26:15,719
Speaker 3: predictor and so it sounds really commonplace and trite lit

545
00:26:16,000 --> 00:26:18,560
Speaker 3: the little graft, but actually the sort of things they're

546
00:26:18,600 --> 00:26:21,879
Speaker 3: looking for, so maybe you can just let's just do

547
00:26:21,920 --> 00:26:25,120
Speaker 3: the top three, yeah, of them, So let's just look

548
00:26:25,119 --> 00:26:26,479
Speaker 3: at inflation first.

549
00:26:26,840 --> 00:26:29,600
Speaker 2: It's a checklist of what the RBA board look at.

550
00:26:29,960 --> 00:26:32,159
Speaker 2: So you're at the on the RBA board and you

551
00:26:32,240 --> 00:26:33,800
Speaker 2: might think of what do they look at when they're

552
00:26:33,800 --> 00:26:35,840
Speaker 2: considering whether they put rates up, down or even steady

553
00:26:35,840 --> 00:26:38,080
Speaker 2: because they're the only three options, or whether it's twenty

554
00:26:38,080 --> 00:26:41,600
Speaker 2: five or fifty. We'll see what happens there. But basically

555
00:26:41,640 --> 00:26:44,240
Speaker 2: there are three kires. There's a couple of other little

556
00:26:44,240 --> 00:26:46,720
Speaker 2: areas that they look at too, and other areas, but

557
00:26:47,200 --> 00:26:52,119
Speaker 2: inflation is the is the premium one. Their mandate, the

558
00:26:52,200 --> 00:26:57,760
Speaker 2: RBA Governor and the RBA Board for more than thirty years,

559
00:26:58,680 --> 00:27:04,480
Speaker 2: that was nine years Castello implemented the inflation target between

560
00:27:04,480 --> 00:27:09,000
Speaker 2: two and three percent, and they do allow for a

561
00:27:09,000 --> 00:27:10,960
Speaker 2: little bit of variation. So if there's a flood and

562
00:27:11,040 --> 00:27:13,080
Speaker 2: it causes let US prices to go up. Look, we're

563
00:27:13,080 --> 00:27:14,760
Speaker 2: not going to hike interstrates because let us prices went

564
00:27:14,800 --> 00:27:16,520
Speaker 2: up because of the flood, you know. So there's a

565
00:27:16,520 --> 00:27:19,440
Speaker 2: little deviation that they can have. But in a broad sense,

566
00:27:19,480 --> 00:27:23,400
Speaker 2: if inflation is between two and three, we're happy. Put

567
00:27:23,400 --> 00:27:26,080
Speaker 2: it this way. If it's above three, we need to hike.

568
00:27:26,880 --> 00:27:30,600
Speaker 2: It was below two, we need to cut. And so

569
00:27:30,760 --> 00:27:32,359
Speaker 2: that's where all the rate hikes from the last two

570
00:27:32,400 --> 00:27:35,480
Speaker 2: years agen because inflation was well putting aside the pandemic.

571
00:27:35,480 --> 00:27:37,800
Speaker 2: Inflation was about one and a half or two percent

572
00:27:37,880 --> 00:27:40,480
Speaker 2: just before the pandemic. Okay, all bets off during the

573
00:27:40,480 --> 00:27:43,639
Speaker 2: pandemic for obvious reasons. Post pandemic, Oh my god, inflation

574
00:27:43,680 --> 00:27:45,719
Speaker 2: went to eight percent. Hike, hike, kik And so they

575
00:27:45,960 --> 00:27:48,480
Speaker 2: kept hiking until now we've got inflation back in target.

576
00:27:48,520 --> 00:27:51,720
Speaker 2: So inflation is the critical issue for them. The other

577
00:27:51,760 --> 00:27:54,879
Speaker 2: one is unemployment, and well, to his credit, I think

578
00:27:54,920 --> 00:27:57,920
Speaker 2: it was a good reform. Jim Charms reformed the RBA

579
00:27:58,359 --> 00:28:02,479
Speaker 2: about eighteen months ago and put unemployment or the labor

580
00:28:02,520 --> 00:28:04,480
Speaker 2: market as one of their other mandates. So it's a

581
00:28:04,560 --> 00:28:08,240
Speaker 2: dual mandate. So inflation is still clearly the most important one.

582
00:28:08,480 --> 00:28:09,840
Speaker 2: But don't forget unemployment.

583
00:28:10,640 --> 00:28:12,440
Speaker 3: And that, by the way, that probably is one of

584
00:28:12,520 --> 00:28:18,400
Speaker 3: the biggest structural changes that the RBA has to deal with,

585
00:28:18,520 --> 00:28:21,000
Speaker 3: apart from having a new RBA aable, but that they've

586
00:28:21,000 --> 00:28:23,080
Speaker 3: had to deal with since the nineties.

587
00:28:24,680 --> 00:28:27,040
Speaker 2: Big reform was huge.

588
00:28:27,080 --> 00:28:28,240
Speaker 1: Yeah, that's the big deal.

589
00:28:28,760 --> 00:28:33,600
Speaker 3: But the next big deal with Jim Charmers, he got

590
00:28:33,600 --> 00:28:36,760
Speaker 3: an independent report. If you guys, remember reviewers should serve

591
00:28:36,800 --> 00:28:39,400
Speaker 3: the RBA, and you know we call it an independent,

592
00:28:39,440 --> 00:28:41,800
Speaker 3: but these things are independent. You already get told what

593
00:28:42,120 --> 00:28:43,640
Speaker 3: our company needs to be before you started.

594
00:28:44,240 --> 00:28:44,840
Speaker 1: This is what the ads.

595
00:28:44,960 --> 00:28:47,080
Speaker 3: I've done two reviews of different things and I was

596
00:28:47,120 --> 00:28:49,960
Speaker 3: told by the Prime Minister both times. One was Joe

597
00:28:49,960 --> 00:28:52,000
Speaker 3: Hockey as a treasurer and the next time was Morrison.

598
00:28:52,360 --> 00:28:54,760
Speaker 3: What outcome they wanted me to deliver before I started

599
00:28:54,760 --> 00:28:58,080
Speaker 3: my review, and I chose my panel. My task was

600
00:28:58,120 --> 00:29:01,600
Speaker 3: so and that's pretty normal. But it doesn't matter the review.

601
00:29:02,040 --> 00:29:04,560
Speaker 3: The big structure and most of us forgotten. But the

602
00:29:04,560 --> 00:29:08,200
Speaker 3: big structural reform last year in August September I think

603
00:29:08,240 --> 00:29:13,120
Speaker 3: it was was was announced August I think maybe my

604
00:29:13,200 --> 00:29:16,600
Speaker 3: dates yeah, plus, but it was from now on, RBA Governor,

605
00:29:16,640 --> 00:29:19,760
Speaker 3: you've got to consider any CPI, which was implemented by

606
00:29:19,800 --> 00:29:24,280
Speaker 3: Costella ninety six. But you now have to look at unemployment.

607
00:29:24,040 --> 00:29:28,960
Speaker 2: Correct, and don't ignore the labor market the unemployment rate

608
00:29:29,240 --> 00:29:30,800
Speaker 2: when you're deliberating on interest rate.

609
00:29:30,840 --> 00:29:33,960
Speaker 3: But it's not an employment, it's it's full employment.

610
00:29:34,040 --> 00:29:35,480
Speaker 1: So different work.

611
00:29:37,040 --> 00:29:39,120
Speaker 3: But we won't we won't talk about not really, but

612
00:29:39,720 --> 00:29:44,200
Speaker 3: it's what they have to consider. The country is fully employed.

613
00:29:44,520 --> 00:29:47,200
Speaker 3: Now the question is, we don't know how did we

614
00:29:47,240 --> 00:29:49,000
Speaker 3: work that out, because there's some people don't want a job,

615
00:29:49,040 --> 00:29:51,160
Speaker 3: some people between jobs, some people only one part times.

616
00:29:51,280 --> 00:29:52,280
Speaker 1: It's is pretty crazy.

617
00:29:52,320 --> 00:29:55,400
Speaker 3: So so the way you measure that is you're looking

618
00:29:55,400 --> 00:29:57,040
Speaker 3: at unemployment, you.

619
00:29:56,960 --> 00:29:59,240
Speaker 2: Do, and you look at the labor market as a whole.

620
00:29:59,320 --> 00:30:02,480
Speaker 2: And so this is this question, So why that move

621
00:30:02,640 --> 00:30:05,360
Speaker 2: And you said it is a big change in the RBA.

622
00:30:05,480 --> 00:30:10,480
Speaker 2: It's a structured modus operandi. So if inflation just say,

623
00:30:11,920 --> 00:30:15,960
Speaker 2: stays at two point eight, just assume me for a second.

624
00:30:16,120 --> 00:30:17,680
Speaker 2: So not quite in the middle of the band. They

625
00:30:17,720 --> 00:30:19,600
Speaker 2: wanted in the middle. So while it's in the band,

626
00:30:19,720 --> 00:30:22,240
Speaker 2: they preferred in the middle of the band. And again,

627
00:30:22,520 --> 00:30:24,640
Speaker 2: these decimal points can actually mean a lot when you're

628
00:30:24,640 --> 00:30:28,160
Speaker 2: talking about inflation. Now if the unemployment rate were to

629
00:30:28,240 --> 00:30:31,280
Speaker 2: go from currently four point one to four point three

630
00:30:31,360 --> 00:30:33,880
Speaker 2: to four point five, and the unemployment rate kept going

631
00:30:33,960 --> 00:30:36,080
Speaker 2: up because the economy remained slow for a little bit

632
00:30:36,120 --> 00:30:39,800
Speaker 2: longer and inflation was just a touch higher than they'd

633
00:30:39,840 --> 00:30:42,400
Speaker 2: like it, they would probably still be cutting interest rates

634
00:30:42,600 --> 00:30:46,239
Speaker 2: because the unemployment rate was going up. So even if

635
00:30:46,280 --> 00:30:48,959
Speaker 2: I even it's never been tested because it hasn't been

636
00:30:48,960 --> 00:30:50,760
Speaker 2: in place for long enough to But if the inflation

637
00:30:50,800 --> 00:30:52,840
Speaker 2: rate was stuck at three percent, so right at the

638
00:30:52,840 --> 00:30:55,560
Speaker 2: top of the band, and the unemployment rate went up,

639
00:30:55,640 --> 00:30:59,880
Speaker 2: what would they do my hunch under the new mandate,

640
00:31:00,120 --> 00:31:03,760
Speaker 2: that still cut rates. Yep, So even if unemployed, even

641
00:31:03,760 --> 00:31:06,239
Speaker 2: if the inflation rate was not quite as low as

642
00:31:06,280 --> 00:31:08,920
Speaker 2: they wanted it and the unemployment rate was going up,

643
00:31:09,800 --> 00:31:12,920
Speaker 2: that's okay, we've got a dual mandate. I'm not quite

644
00:31:13,000 --> 00:31:16,720
Speaker 2: happy with our with our inflation outlook, we're certainly not

645
00:31:16,760 --> 00:31:19,160
Speaker 2: happy with the unemployment out but we'll still cut.

646
00:31:19,040 --> 00:31:21,680
Speaker 3: So because this is an important point for everybody, just

647
00:31:21,680 --> 00:31:23,640
Speaker 3: to take it when you're reading the numbers that come

648
00:31:23,640 --> 00:31:26,239
Speaker 3: out from the ABS, and this stuff gets published all

649
00:31:26,280 --> 00:31:27,800
Speaker 3: the time, and if you want to find out when

650
00:31:27,840 --> 00:31:29,680
Speaker 3: the next data comes out and just go to abs

651
00:31:29,760 --> 00:31:31,400
Speaker 3: dot dot do you and you'll find out it's pretty

652
00:31:31,400 --> 00:31:34,760
Speaker 3: easy and it's actually quite an intuitive the way it's

653
00:31:34,760 --> 00:31:35,320
Speaker 3: easy to read it.

654
00:31:35,520 --> 00:31:38,760
Speaker 1: It's actually very I reckon it's excellent website. Yeah, very good.

655
00:31:38,920 --> 00:31:42,320
Speaker 3: So if you see, oh wow, you know, the marketplace

656
00:31:42,360 --> 00:31:44,520
Speaker 3: goes meant all the commentators are talking about it, including

657
00:31:44,600 --> 00:31:47,479
Speaker 3: him and I. Inflations, you know, trem millionaires.

658
00:31:47,680 --> 00:31:48,160
Speaker 1: We'll come back to.

659
00:31:48,280 --> 00:31:51,160
Speaker 3: But Triman inflation is like two point five. But if

660
00:31:51,200 --> 00:31:57,760
Speaker 3: for some reason unemployment was three percent, yes, you're not

661
00:31:57,800 --> 00:31:58,800
Speaker 3: going to get a rate reduction.

662
00:31:59,040 --> 00:31:59,120
Speaker 1: No.

663
00:32:00,240 --> 00:32:05,080
Speaker 3: So these two bits of data are neck and neck,

664
00:32:06,160 --> 00:32:07,800
Speaker 3: not one I have the other day. Are neck and

665
00:32:07,880 --> 00:32:11,120
Speaker 3: neck and the really and that's what worries me too, See,

666
00:32:11,120 --> 00:32:14,680
Speaker 3: because we have unemployment has been stub stubbornly in a

667
00:32:14,720 --> 00:32:18,840
Speaker 3: good way yet low four point one.

668
00:32:17,880 --> 00:32:19,880
Speaker 2: Four point one every month of the last year basically.

669
00:32:19,960 --> 00:32:23,800
Speaker 3: And if this new new labor party its like initiative

670
00:32:23,840 --> 00:32:26,160
Speaker 3: and all the sort of momentum that goes with it,

671
00:32:26,240 --> 00:32:29,080
Speaker 3: and employers start to feel really good and they say, ship,

672
00:32:29,200 --> 00:32:31,719
Speaker 3: everything's good, everything's they're taking along nicely.

673
00:32:32,520 --> 00:32:34,760
Speaker 1: The inflation numbers good, I'm going to start employing people.

674
00:32:36,000 --> 00:32:38,400
Speaker 3: If the unemployment number goes dropped below I thought my

675
00:32:38,440 --> 00:32:42,360
Speaker 3: own gut reaction, owe feeling gut instinct says that the

676
00:32:42,520 --> 00:32:45,800
Speaker 3: RBA is not not going to reduce rates.

677
00:32:45,840 --> 00:32:48,440
Speaker 2: Correct, So turning that arguments on its head. So even

678
00:32:48,440 --> 00:32:50,600
Speaker 2: with nice and low inflation, just so, we had two

679
00:32:50,640 --> 00:32:56,160
Speaker 2: point two trimmed mean headline inflation rate and because of

680
00:32:56,160 --> 00:32:58,840
Speaker 2: a pick up in our economy for some reason it

681
00:32:58,920 --> 00:33:02,160
Speaker 2: might be a China spied lifting activity or something, and

682
00:33:02,200 --> 00:33:03,960
Speaker 2: the unemploment rate went back to three and a half

683
00:33:04,000 --> 00:33:06,479
Speaker 2: even three and three quarter percent, you know, three points something.

684
00:33:06,840 --> 00:33:08,960
Speaker 2: The imbea they say, oh gee, not that they don't

685
00:33:08,960 --> 00:33:11,400
Speaker 2: want low unemployment. Don't get me wrong, but we know

686
00:33:11,560 --> 00:33:15,280
Speaker 2: from history that when the unemployment rate gets too low.

687
00:33:15,800 --> 00:33:16,440
Speaker 1: What happens.

688
00:33:16,720 --> 00:33:18,840
Speaker 3: Wages go up and what and we get what we

689
00:33:18,960 --> 00:33:20,560
Speaker 3: call wage push inflation.

690
00:33:20,640 --> 00:33:23,880
Speaker 2: Now that hasn't happened for many years, despite fears of

691
00:33:23,920 --> 00:33:26,720
Speaker 2: it happening, but it is. The theory still holds. It

692
00:33:26,800 --> 00:33:28,680
Speaker 2: still holds in practice. When you think about I don't

693
00:33:28,720 --> 00:33:31,480
Speaker 2: know whether any of your experiences during the labor market shortage,

694
00:33:31,520 --> 00:33:33,560
Speaker 2: the skill shortage, whether you're looking to hire people, think

695
00:33:33,840 --> 00:33:36,120
Speaker 2: I can't find anybody because a lot of other firms did.

696
00:33:36,640 --> 00:33:39,360
Speaker 2: How do you just so you desperately need someone to work.

697
00:33:39,440 --> 00:33:41,760
Speaker 2: The business is running really well, you're really happy, I

698
00:33:41,800 --> 00:33:45,320
Speaker 2: need to find someone put the add on seek or

699
00:33:45,320 --> 00:33:49,120
Speaker 2: how do you do your advertising? No one applies, or

700
00:33:49,120 --> 00:33:53,040
Speaker 2: one person applies, or you find someone and they're really good,

701
00:33:53,040 --> 00:33:55,360
Speaker 2: but they say, actually, mate, I want to you know,

702
00:33:55,560 --> 00:33:58,360
Speaker 2: twenty percent more than you're offering me in terms of

703
00:33:58,400 --> 00:34:01,480
Speaker 2: the pay rate and your hands because there's no other alternative.

704
00:34:01,640 --> 00:34:04,360
Speaker 2: You need that worker. So what happens to wages? They

705
00:34:04,400 --> 00:34:06,800
Speaker 2: go up because you paid that extra twenty percent just

706
00:34:06,840 --> 00:34:09,800
Speaker 2: in this example. And then so you've got this situation

707
00:34:09,880 --> 00:34:15,239
Speaker 2: where that can often is passed on in higher prices. So,

708
00:34:15,239 --> 00:34:18,560
Speaker 2: if you're a business person, your main cost you your

709
00:34:18,680 --> 00:34:21,560
Speaker 2: operational cost, your labor costs, and your mortgage costs. So

710
00:34:21,680 --> 00:34:23,880
Speaker 2: if labor costs are going up, how do you maintain

711
00:34:23,920 --> 00:34:26,680
Speaker 2: your margin? I put up with selling prices. What's putting

712
00:34:26,760 --> 00:34:29,600
Speaker 2: up selling prices? It's higher inflation, the thing that the

713
00:34:29,680 --> 00:34:30,760
Speaker 2: RBA is fighting against.

714
00:34:30,880 --> 00:34:34,000
Speaker 3: But now whilst we're not suggesting the RBA will be

715
00:34:34,040 --> 00:34:35,839
Speaker 3: worried about it, but they will be considering it. So

716
00:34:36,360 --> 00:34:39,960
Speaker 3: inflation and unemployment are two numbers you need to get

717
00:34:40,000 --> 00:34:43,520
Speaker 3: your head around. The target is between two and three

718
00:34:43,560 --> 00:34:45,680
Speaker 3: on inflation, which goes back to nineteen ninety six, which

719
00:34:45,680 --> 00:34:47,960
Speaker 3: is and by the ways, it's really interesting, from nineteen

720
00:34:48,040 --> 00:34:54,479
Speaker 3: ninety six to two thousand and twenty two probably that's

721
00:34:54,640 --> 00:34:59,160
Speaker 3: like twenty six years of it we actually had an

722
00:34:59,160 --> 00:35:00,960
Speaker 3: average or inflation.

723
00:35:02,800 --> 00:35:06,000
Speaker 2: If you actually do the average, guess what two point

724
00:35:06,040 --> 00:35:07,720
Speaker 2: five in fact to two that's one points.

725
00:35:07,960 --> 00:35:08,600
Speaker 1: Believe it or not.

726
00:35:08,640 --> 00:35:10,160
Speaker 2: This sort of blew me away when I actually didn't know,

727
00:35:10,280 --> 00:35:11,839
Speaker 2: I saw it a two point four to nine.

728
00:35:12,040 --> 00:35:12,720
Speaker 3: Yeah, it was amazing.

729
00:35:12,719 --> 00:35:13,680
Speaker 2: How blood couldn't stand that?

730
00:35:13,760 --> 00:35:15,080
Speaker 1: Which I could target anything that.

731
00:35:15,120 --> 00:35:17,719
Speaker 3: Was Australia is in economy's blessed situations.

732
00:35:17,760 --> 00:35:19,120
Speaker 2: But you know, when the economy was a bit strong,

733
00:35:19,160 --> 00:35:20,560
Speaker 2: went a bit high, and it went a bit lower,

734
00:35:20,600 --> 00:35:24,000
Speaker 2: but the average, they said, let us prices or oil

735
00:35:24,040 --> 00:35:25,680
Speaker 2: price or something happened in the Middle East, they go

736
00:35:25,800 --> 00:35:27,760
Speaker 2: up there. You know that the RBA does not worry

737
00:35:27,800 --> 00:35:31,279
Speaker 2: about that terribly much because they know it's probably not

738
00:35:31,320 --> 00:35:31,640
Speaker 2: going to.

739
00:35:31,560 --> 00:35:35,399
Speaker 3: Be intiflation in the middle term. Mid term medium term

740
00:35:36,040 --> 00:35:38,279
Speaker 3: that's the word that they use. And we've done a

741
00:35:38,320 --> 00:35:41,520
Speaker 3: remarkable job in Australia is like a gold standard in

742
00:35:41,640 --> 00:35:45,200
Speaker 3: relation to CBI over the last twenty five years. Like

743
00:35:45,239 --> 00:35:46,920
Speaker 3: it's one of the best performing countries in the world.

744
00:35:46,920 --> 00:35:48,359
Speaker 3: And you have to give the RBA a wrap for that,

745
00:35:48,800 --> 00:35:51,600
Speaker 3: I mean, and like they deserve it. Irrespective of some

746
00:35:51,640 --> 00:35:55,200
Speaker 3: of the utterings of our last RBA governor, it doesn't matter.

747
00:35:55,520 --> 00:35:57,839
Speaker 1: They each one of them has done a bloody great job.

748
00:35:57,880 --> 00:36:00,839
Speaker 3: And it goes back to Costello's original two to three

749
00:36:00,880 --> 00:36:04,160
Speaker 3: percent and that and the way that was mandated into

750
00:36:04,200 --> 00:36:05,800
Speaker 3: the RBA at the time. But we now have a

751
00:36:05,840 --> 00:36:08,320
Speaker 3: structural change, we have a nut something else mandated and

752
00:36:08,440 --> 00:36:11,080
Speaker 3: doesn't surprise us that the Labor Party would push unemployment.

753
00:36:11,120 --> 00:36:13,640
Speaker 1: That makes sense, you know, and probably should do it.

754
00:36:13,760 --> 00:36:15,239
Speaker 1: They should do or employment, I should say.

755
00:36:15,880 --> 00:36:18,000
Speaker 3: So when you're looking at stuff, don't get two carried

756
00:36:18,000 --> 00:36:20,640
Speaker 3: away just inflation number. Keep going back to the ABS

757
00:36:20,719 --> 00:36:23,319
Speaker 3: and have a look at what the unemployment number is

758
00:36:23,600 --> 00:36:26,359
Speaker 3: to get a sense of things. Just before we move

759
00:36:26,400 --> 00:36:30,680
Speaker 3: off unemployment, because that's Stephen's second the thing you need

760
00:36:30,719 --> 00:36:34,640
Speaker 3: to tick off your list. So the CPI, inflation, unemployment

761
00:36:35,360 --> 00:36:37,600
Speaker 3: before we move off, that onto the third one. Before

762
00:36:37,640 --> 00:36:41,880
Speaker 3: we move off, I will just just we would tickled

763
00:36:41,880 --> 00:36:45,040
Speaker 3: it a little bit of moment ago, Koky. There is

764
00:36:45,080 --> 00:36:51,399
Speaker 3: this concept of it's changed recently called the non accelerating

765
00:36:51,960 --> 00:36:57,680
Speaker 3: inflation rate of unemployment. Now it's a mathematical concept, the

766
00:36:57,760 --> 00:36:59,040
Speaker 3: quantitative concept.

767
00:36:59,360 --> 00:37:00,759
Speaker 1: But nonetheless it's.

768
00:37:00,440 --> 00:37:03,880
Speaker 3: A model, Okay, but it is an important model because

769
00:37:04,080 --> 00:37:05,960
Speaker 3: the RBA does these models.

770
00:37:06,440 --> 00:37:06,640
Speaker 1: Now.

771
00:37:06,680 --> 00:37:09,000
Speaker 3: I don't know whether you know whether you found out

772
00:37:09,040 --> 00:37:11,960
Speaker 3: more recently, but I haven't seen her change the modeling

773
00:37:11,960 --> 00:37:14,080
Speaker 3: that they did sometime ago. They would obviously have done

774
00:37:14,080 --> 00:37:16,640
Speaker 3: a model remodel, but I haven't seen the outcomes. They

775
00:37:16,680 --> 00:37:19,000
Speaker 3: published one about twelve months ago.

776
00:37:19,400 --> 00:37:22,160
Speaker 2: I haven't seen an updated public Well, I'm sure that

777
00:37:22,160 --> 00:37:24,120
Speaker 2: that's one that they work on all the time.

778
00:37:24,200 --> 00:37:25,600
Speaker 1: Yeah, they'd be updating this model.

779
00:37:25,600 --> 00:37:28,160
Speaker 3: But the NEHRU they have internally in the reserve means

780
00:37:28,239 --> 00:37:32,440
Speaker 3: the reserve being looking at this and basically what it

781
00:37:32,560 --> 00:37:38,759
Speaker 3: is that's a rate of inflation, sorry, a rate of unemployment.

782
00:37:38,840 --> 00:37:43,040
Speaker 3: I should say that they take the view will neither accelerate.

783
00:37:43,080 --> 00:37:46,120
Speaker 3: It accelerate nor deflate inflation. So it's like it's the

784
00:37:46,160 --> 00:37:50,279
Speaker 3: Goldilocks point of unemployment. What is the employment rate we

785
00:37:50,480 --> 00:37:53,719
Speaker 3: like to see in this country? That is like the

786
00:37:53,760 --> 00:37:54,560
Speaker 3: perfect position.

787
00:37:54,719 --> 00:37:56,879
Speaker 2: Now, it doesn't add to wage growth and inflation.

788
00:37:56,840 --> 00:38:01,040
Speaker 3: Doesn't pressure growth as perfectly. It's perfectly positioned. But it's

789
00:38:01,080 --> 00:38:04,680
Speaker 3: like we'll fantasy. But it's an important concept. It's a

790
00:38:04,800 --> 00:38:08,319
Speaker 3: it's a it's an economic fiction. By the way, all

791
00:38:08,360 --> 00:38:12,759
Speaker 3: this stuff's economic fiction. I'm sorry, mate, but everything we're

792
00:38:12,760 --> 00:38:15,759
Speaker 3: talking about is all bullshit. Okay, but but but a

793
00:38:15,760 --> 00:38:19,360
Speaker 3: bit like the fact that labor one is that you

794
00:38:19,400 --> 00:38:21,600
Speaker 3: don't like that, that's bullshit too, because labors here and

795
00:38:21,680 --> 00:38:24,319
Speaker 3: labors here to stay, and all these economics or all

796
00:38:24,320 --> 00:38:27,640
Speaker 3: these economic fictions, like it or not, they exist.

797
00:38:27,840 --> 00:38:30,720
Speaker 2: And they do influence Mark fucking But they do influence

798
00:38:30,760 --> 00:38:33,279
Speaker 2: what our friends at the RBA totally, whether you think

799
00:38:33,280 --> 00:38:36,080
Speaker 2: of that's a whole lot of bologney, whatever, it is

800
00:38:36,160 --> 00:38:38,959
Speaker 2: what they do. So when they sit down, it's one

801
00:38:38,960 --> 00:38:41,279
Speaker 2: of the important inputs into their decision whether they're going

802
00:38:41,280 --> 00:38:41,960
Speaker 2: to cut, which is.

803
00:38:41,960 --> 00:38:44,320
Speaker 3: Why we need you need to listen to Stephen because

804
00:38:44,719 --> 00:38:47,440
Speaker 3: maybe you just talk about the nay or and a

805
00:38:47,719 --> 00:38:50,880
Speaker 3: I are you quickly where we're at the.

806
00:38:50,920 --> 00:38:52,600
Speaker 2: Last time they published numbers, which as you said, it

807
00:38:52,640 --> 00:38:55,200
Speaker 2: was about a year ago, they said it was about

808
00:38:55,239 --> 00:38:58,160
Speaker 2: four and a quarter four and a half percent, four

809
00:38:58,200 --> 00:39:00,040
Speaker 2: and more from here four and a half. So so

810
00:39:00,120 --> 00:39:05,279
Speaker 2: what they what that meant in every day turns is

811
00:39:05,320 --> 00:39:08,680
Speaker 2: that when the unemployment rate got below four percent, so

812
00:39:08,800 --> 00:39:10,680
Speaker 2: four and a half percent, sorry, so when it got

813
00:39:10,680 --> 00:39:14,680
Speaker 2: to four percent, they were thinking and their little model

814
00:39:14,680 --> 00:39:17,759
Speaker 2: on an Excel spreadsheet was telling them that that would

815
00:39:17,800 --> 00:39:22,280
Speaker 2: feed into wages growth, that would feed into higher inflation.

816
00:39:22,840 --> 00:39:28,680
Speaker 2: So therefore, we can't cut interstrates because we fear that

817
00:39:28,760 --> 00:39:32,520
Speaker 2: the wage price spiral, that the mayoru is too the

818
00:39:32,560 --> 00:39:37,920
Speaker 2: actual unemployment rate is too low for the nehru, and

819
00:39:37,960 --> 00:39:41,480
Speaker 2: we're going to have some wage pressures. So that saw them.

820
00:39:41,520 --> 00:39:47,760
Speaker 2: When you know the US's cutting rates, the tiewe's, the Poms, Europeans, Canada,

821
00:39:48,040 --> 00:39:50,160
Speaker 2: we're all cutting rates. From the middle of last year,

822
00:39:50,160 --> 00:39:52,160
Speaker 2: we held off. We held off, We held off until February.

823
00:39:52,280 --> 00:39:54,399
Speaker 2: We had one twenty five and some of those central

824
00:39:54,400 --> 00:39:58,239
Speaker 2: banks were cutting fifty yea at a time. We had

825
00:39:58,239 --> 00:40:00,680
Speaker 2: one little twenty five in February. They poured in April.

826
00:40:00,880 --> 00:40:03,520
Speaker 2: I'm wondering whether the election was they just didn't want

827
00:40:03,520 --> 00:40:07,920
Speaker 2: to get involved, which is I understand, And then Nahru

828
00:40:08,160 --> 00:40:10,680
Speaker 2: was one of the reasons that they didn't do it,

829
00:40:10,680 --> 00:40:13,319
Speaker 2: because they feared that if they cut interest rates and

830
00:40:14,640 --> 00:40:17,360
Speaker 2: which is stignatory to the economy. We know that the

831
00:40:17,440 --> 00:40:21,279
Speaker 2: uniploy rate went back to three point seven three point eight. Oh,

832
00:40:21,280 --> 00:40:23,439
Speaker 2: we've got wage presiures. We've made a mistake. So they've

833
00:40:23,480 --> 00:40:27,520
Speaker 2: been very very cautious and that labor market, the unemployment

834
00:40:27,560 --> 00:40:30,600
Speaker 2: the has been one of the key reasons why they've

835
00:40:30,640 --> 00:40:32,520
Speaker 2: been very very cautious in cutting.

836
00:40:32,719 --> 00:40:36,080
Speaker 3: So the neighbor is related to the new part of

837
00:40:36,080 --> 00:40:39,120
Speaker 3: the mandate unemployment. So one of the ways of measuring

838
00:40:39,200 --> 00:40:42,120
Speaker 3: these things is not just looking at the unemployment number

839
00:40:42,719 --> 00:40:45,560
Speaker 3: as it indicates what full employment looks like. It's also

840
00:40:45,600 --> 00:40:47,560
Speaker 3: saying and what does that mean in terms of what

841
00:40:47,600 --> 00:40:50,080
Speaker 3: it could do to inflation. So the NEHRU is an

842
00:40:50,080 --> 00:40:53,640
Speaker 3: important piece. Unfortunately she never talks about it. So no, no,

843
00:40:53,760 --> 00:40:54,719
Speaker 3: they never you.

844
00:40:54,760 --> 00:40:56,839
Speaker 2: Know that once in a year they put something yeah,

845
00:40:56,840 --> 00:40:57,200
Speaker 2: but not.

846
00:40:57,120 --> 00:40:58,359
Speaker 3: Out on that there.

847
00:40:58,440 --> 00:41:00,920
Speaker 1: Yeah. Yeah, is in the really certain stuff with freedom information.

848
00:41:00,960 --> 00:41:02,640
Speaker 2: So I know there's a couple of journeys who love

849
00:41:02,719 --> 00:41:05,680
Speaker 2: to sort of do freedom of information requests of the RBA.

850
00:41:05,719 --> 00:41:07,839
Speaker 1: What your latest nay and so Shane.

851
00:41:07,560 --> 00:41:11,799
Speaker 2: Right from the Herald Age, he's tenacious and he I

852
00:41:11,800 --> 00:41:13,640
Speaker 2: think he's got a couple of little inso the RBA.

853
00:41:14,400 --> 00:41:16,320
Speaker 2: So he occasionally writes something.

854
00:41:16,040 --> 00:41:21,120
Speaker 3: About John ken from ther and he's connected. And I

855
00:41:21,200 --> 00:41:24,040
Speaker 3: sometimes I think I use John Keo to condition the market.

856
00:41:24,880 --> 00:41:27,359
Speaker 3: I really do, because he comes up too many things

857
00:41:27,360 --> 00:41:29,440
Speaker 3: that get recruited by the Reserve Bank the next.

858
00:41:29,320 --> 00:41:30,560
Speaker 1: Day and they do their thing.

859
00:41:30,760 --> 00:41:34,120
Speaker 3: But but and Chris Well, certainly Chris Joy, may Chris

860
00:41:34,200 --> 00:41:35,160
Speaker 3: Joy accuse.

861
00:41:34,840 --> 00:41:35,200
Speaker 1: Him of that.

862
00:41:35,880 --> 00:41:37,480
Speaker 2: Certainly Chris doesn't hold back.

863
00:41:37,520 --> 00:41:38,319
Speaker 1: No, it doesn't hold back.

864
00:41:39,200 --> 00:41:43,600
Speaker 3: So so so guys, when you are looking to talk

865
00:41:43,640 --> 00:41:46,720
Speaker 3: to your clients and you're looking to have something sensible

866
00:41:46,719 --> 00:41:50,280
Speaker 3: in terms of conversation with your clients, and you need.

867
00:41:50,120 --> 00:41:51,680
Speaker 1: To have some stuff in your hip pocket.

868
00:41:51,920 --> 00:41:53,439
Speaker 3: And I know this is a commercial conference, it doesn't

869
00:41:53,440 --> 00:41:55,560
Speaker 3: matter it's commercial residential. It's the same point. Because the

870
00:41:55,560 --> 00:41:59,040
Speaker 3: interest rates are interst rates. These are and we've got

871
00:41:59,040 --> 00:42:02,319
Speaker 3: some more stuff to talk about. But these are two

872
00:42:02,400 --> 00:42:04,560
Speaker 3: really important things. You need to be able to understand

873
00:42:04,640 --> 00:42:08,400
Speaker 3: the structural reasons around this stuff. So we've talked about

874
00:42:08,719 --> 00:42:11,880
Speaker 3: the inflation number, which gets printed every We've got a

875
00:42:11,880 --> 00:42:12,600
Speaker 3: monthly flicit.

876
00:42:13,200 --> 00:42:15,840
Speaker 1: I'm more I think she's more interested in the quarterly numbers.

877
00:42:16,200 --> 00:42:18,279
Speaker 2: Yes, the monthly number is sort of interesting. But the

878
00:42:18,360 --> 00:42:21,520
Speaker 2: quarterly one's the one that's got the credibility.

879
00:42:21,640 --> 00:42:22,960
Speaker 3: Yes, So if you want to find out where the

880
00:42:23,040 --> 00:42:25,640
Speaker 3: quarterly number is, the quarterly number gets printed the month

881
00:42:25,680 --> 00:42:29,160
Speaker 3: following about the twenty last.

882
00:42:28,320 --> 00:42:29,879
Speaker 1: Week of the month following the quarter.

883
00:42:29,960 --> 00:42:32,279
Speaker 3: So for the March quarter, the number got printed on

884
00:42:32,320 --> 00:42:33,160
Speaker 3: the twenty ninth of.

885
00:42:33,160 --> 00:42:35,600
Speaker 1: Late April April some of that.

886
00:42:37,160 --> 00:42:39,440
Speaker 3: The next set of numbers again they printed, won't be

887
00:42:39,520 --> 00:42:40,320
Speaker 3: until July.

888
00:42:40,239 --> 00:42:41,279
Speaker 1: So the June quarter numbers.

889
00:42:41,280 --> 00:42:42,520
Speaker 2: And we're in the middle of right in the slap

890
00:42:42,520 --> 00:42:44,040
Speaker 2: bang in the middle of the June quarter right now.

891
00:42:44,680 --> 00:42:47,680
Speaker 2: So the ABS is running around counting the price of haircuts, and.

892
00:42:47,719 --> 00:42:49,680
Speaker 3: Tell them how they do it. It gives you an example

893
00:42:49,719 --> 00:42:50,719
Speaker 3: of how they do because, oh.

894
00:42:50,719 --> 00:42:54,160
Speaker 2: It's really interesting because this is important, absolutely fascinating. The

895
00:42:54,680 --> 00:42:58,239
Speaker 2: bureau statistics who calculate the inflation rate. So we might

896
00:42:58,280 --> 00:42:59,840
Speaker 2: go to the super marketing, oh, gee, the price of

897
00:43:00,120 --> 00:43:02,200
Speaker 2: beans has gone up a lot, and you know, the

898
00:43:02,200 --> 00:43:05,359
Speaker 2: price of dishwashing tablets has gone up a lot. The

899
00:43:05,600 --> 00:43:07,399
Speaker 2: what the bureau statistics do? They go to the eight

900
00:43:07,480 --> 00:43:11,080
Speaker 2: capital cities, the six states, and two territories. Some of

901
00:43:11,080 --> 00:43:13,520
Speaker 2: this is automated now of course they just go online.

902
00:43:13,800 --> 00:43:18,759
Speaker 2: But they check the price literally of one hundred thousand

903
00:43:18,960 --> 00:43:22,840
Speaker 2: items ranging from a men's haircut to a woman's haircut,

904
00:43:22,880 --> 00:43:27,880
Speaker 2: to shoes, to socks, to bananas, to insurance premium. So

905
00:43:27,880 --> 00:43:29,320
Speaker 2: what's an insurance premium for cars?

906
00:43:29,400 --> 00:43:29,640
Speaker 1: Yep?

907
00:43:29,840 --> 00:43:32,520
Speaker 2: Home yep, contents yep. So it's not just so you

908
00:43:32,560 --> 00:43:35,080
Speaker 2: see this insurance premium or what is it? So they

909
00:43:35,160 --> 00:43:38,399
Speaker 2: check because they go up at different rates. So they

910
00:43:38,680 --> 00:43:41,840
Speaker 2: go around and survey one hundred thousand prices.

911
00:43:41,480 --> 00:43:43,360
Speaker 3: Each quarter Acial Field offices.

912
00:43:43,520 --> 00:43:45,280
Speaker 2: Yeah, and there's people go out to the shop literally

913
00:43:45,360 --> 00:43:49,400
Speaker 2: yet correct, correct, what's the price of I don't wine

914
00:43:49,480 --> 00:43:55,400
Speaker 2: and beef and lamb and chicken and onions whatever. And

915
00:43:55,719 --> 00:43:57,799
Speaker 2: they put this into some must be I haven't seen

916
00:43:57,800 --> 00:43:59,000
Speaker 2: this breadshet. I'd love to see it.

917
00:44:01,239 --> 00:44:01,759
Speaker 3: You would love to.

918
00:44:02,760 --> 00:44:05,319
Speaker 2: They put all these prices in and hit the colt

919
00:44:05,400 --> 00:44:08,400
Speaker 2: button and out comes your inflation rate and it's weighted.

920
00:44:08,480 --> 00:44:11,200
Speaker 2: This is the other thing. So what's more so petrol

921
00:44:11,840 --> 00:44:13,920
Speaker 2: you know, and of course that changes every day. So

922
00:44:13,960 --> 00:44:16,759
Speaker 2: the quarterly is the quarterly average. I think they do

923
00:44:16,800 --> 00:44:19,719
Speaker 2: that every day in each capital city. So backwards dollar

924
00:44:19,760 --> 00:44:21,720
Speaker 2: eighty seventy nine dollars eighty.

925
00:44:21,600 --> 00:44:23,760
Speaker 3: Eight, it's but it's a backward number. It's not correct,

926
00:44:23,800 --> 00:44:26,280
Speaker 3: it's not it's not extrapolated forward, it's just backwards.

927
00:44:26,280 --> 00:44:28,440
Speaker 2: It's just the number for the quarter. So and the

928
00:44:28,480 --> 00:44:34,000
Speaker 2: price of petrol. The waiting on the items in the

929
00:44:34,080 --> 00:44:37,880
Speaker 2: inflation basket is according to how much we They do

930
00:44:37,920 --> 00:44:39,719
Speaker 2: a survey every five years, how much we spend on

931
00:44:39,760 --> 00:44:42,120
Speaker 2: each item. So we spend a lot more on petrol

932
00:44:42,160 --> 00:44:47,520
Speaker 2: than we do on onions per quarter hundred bucks a

933
00:44:47,560 --> 00:44:49,919
Speaker 2: week for petrol, it will take might buy a bag

934
00:44:49,920 --> 00:44:51,600
Speaker 2: of ranges every couple of weeks, you know. So if

935
00:44:51,600 --> 00:44:53,720
Speaker 2: the price of onions goes up a lot for whatever reason,

936
00:44:54,560 --> 00:44:55,880
Speaker 2: sure the price of onions is gonna up. It's not

937
00:44:55,880 --> 00:44:57,480
Speaker 2: gonna have to be impact on the CPI, on the

938
00:44:57,520 --> 00:45:02,000
Speaker 2: inflation rate because wait, yeah, And so that's where things

939
00:45:02,040 --> 00:45:04,719
Speaker 2: like dwelling rent have a very high waiting because a

940
00:45:04,760 --> 00:45:07,360
Speaker 2: lot of people spend a lot the large part of

941
00:45:07,360 --> 00:45:09,759
Speaker 2: their income on rent. Gee of course don't we just

942
00:45:09,880 --> 00:45:12,440
Speaker 2: and things like electricity has a high waiting in the

943
00:45:12,440 --> 00:45:17,200
Speaker 2: consumer price and it's food, takeaway food, tobacco, alcohol, you know,

944
00:45:17,360 --> 00:45:18,960
Speaker 2: soft drinks. You know, it's all in there, and they

945
00:45:19,000 --> 00:45:20,839
Speaker 2: all have a waiting and keep according to how much

946
00:45:20,880 --> 00:45:25,320
Speaker 2: we spend. So over the last you know, twenty years,

947
00:45:25,840 --> 00:45:31,440
Speaker 2: things like alcohol and tobacco have had a lower waiting

948
00:45:31,440 --> 00:45:34,400
Speaker 2: because we are drinking less. Not last night maybe, but

949
00:45:34,640 --> 00:45:38,040
Speaker 2: we're drinking less and smoking less, so they've gone. They're

950
00:45:38,040 --> 00:45:40,880
Speaker 2: still in the inflation number, but they're less. Things like

951
00:45:40,920 --> 00:45:43,759
Speaker 2: computers and have got a much much high waiting. Twenty

952
00:45:43,800 --> 00:45:45,680
Speaker 2: years ago, not many people had a computer. Now we've

953
00:45:45,680 --> 00:45:48,319
Speaker 2: got bloody phones and laptops and things, so that's got

954
00:45:48,360 --> 00:45:50,840
Speaker 2: a very high wating. So the price of your iPhone

955
00:45:50,880 --> 00:45:53,680
Speaker 2: and your Dell computer and all those things have a

956
00:45:53,760 --> 00:45:55,279
Speaker 2: very high weighting in the inflation.

957
00:45:55,000 --> 00:45:57,359
Speaker 1: Basket because everyone's got one sort of so it's linked

958
00:45:57,400 --> 00:45:57,560
Speaker 1: to that.

959
00:45:58,200 --> 00:46:00,080
Speaker 2: So that's how they calculate it, and they do, and

960
00:46:00,120 --> 00:46:02,320
Speaker 2: they want to get that between tur and three percent

961
00:46:02,520 --> 00:46:07,640
Speaker 2: the change in those prices weighted according to the different ways.

962
00:46:08,360 --> 00:46:11,279
Speaker 2: At two point five percent, it sounds pretty hard to

963
00:46:11,280 --> 00:46:12,359
Speaker 2: do it, that doesn't what just put it like.

964
00:46:12,320 --> 00:46:13,120
Speaker 1: That much, so they do.

965
00:46:13,440 --> 00:46:16,279
Speaker 3: The number you're most interested in will be the quarterly numbers,

966
00:46:16,320 --> 00:46:18,720
Speaker 3: which come out at the end of the month following

967
00:46:18,719 --> 00:46:21,680
Speaker 3: the quarter. That's the first thing they do do monthly numbers.

968
00:46:21,719 --> 00:46:23,520
Speaker 3: Though they're doing monthly numbers yes.

969
00:46:23,480 --> 00:46:26,000
Speaker 2: They're doing much, but I was called experimental.

970
00:46:26,120 --> 00:46:28,319
Speaker 3: Yeah, yeah, I wouldn't put too much. I wouldn't put

971
00:46:28,360 --> 00:46:30,319
Speaker 3: too much impact or emphasis on that. I might get

972
00:46:30,320 --> 00:46:32,560
Speaker 3: a bit encouraged or discouraged by it, but that's about it.

973
00:46:32,760 --> 00:46:36,240
Speaker 3: I wouldn't be making financial decisions around those monthly numbers.

974
00:46:36,520 --> 00:46:39,840
Speaker 3: So they do that, and as we said, Stephen just

975
00:46:39,880 --> 00:46:42,759
Speaker 3: said a moment ago is that they're looking for a

976
00:46:42,840 --> 00:46:46,040
Speaker 3: number between two and three percent in the older period,

977
00:46:46,120 --> 00:46:49,400
Speaker 3: like going back period we used to look for the

978
00:46:49,440 --> 00:46:52,680
Speaker 3: headline number. Okay, we're looking at the headline number. Another

979
00:46:52,719 --> 00:46:55,600
Speaker 3: small change which the Reserve Bank governor has sort of

980
00:46:55,680 --> 00:46:58,919
Speaker 3: a new one has sort of implemented, and I mean

981
00:46:58,960 --> 00:47:00,680
Speaker 3: it's sort of gone to the coop and no one's

982
00:47:00,680 --> 00:47:02,560
Speaker 3: really talked about this, to be honest with you, and

983
00:47:02,600 --> 00:47:05,120
Speaker 3: I have. But she looks at what they call and

984
00:47:05,280 --> 00:47:07,640
Speaker 3: you'll hear the word the underlying face number or the

985
00:47:07,680 --> 00:47:12,239
Speaker 3: trimmed mean. So she's not that interested because like unfortunately

986
00:47:12,760 --> 00:47:15,040
Speaker 3: I called him out. I called him out on it

987
00:47:15,360 --> 00:47:17,920
Speaker 3: on X and he got upset, and then that's when

988
00:47:17,960 --> 00:47:19,040
Speaker 3: they contamp me to come on the show.

989
00:47:19,600 --> 00:47:23,359
Speaker 1: I said, because he was saying, just as in January, I.

990
00:47:23,280 --> 00:47:28,480
Speaker 4: Saw that Twitter yet exchange I played in January the

991
00:47:28,520 --> 00:47:31,520
Speaker 4: head in January, the number came out for the December

992
00:47:31,520 --> 00:47:33,960
Speaker 4: period the end of and Jim of course jumped up

993
00:47:33,960 --> 00:47:35,880
Speaker 4: on the badias and started saying, you know, look, we

994
00:47:35,960 --> 00:47:36,959
Speaker 4: brought inflation down.

995
00:47:37,000 --> 00:47:39,960
Speaker 3: And because the headline number came to two point four

996
00:47:40,000 --> 00:47:41,759
Speaker 3: I think it was or something like that and the

997
00:47:41,800 --> 00:47:47,640
Speaker 3: trim was three twenty five, and I wrote, Jim stopped

998
00:47:48,080 --> 00:47:50,440
Speaker 3: taking credit for this, Australians had done that. You've had

999
00:47:50,480 --> 00:47:52,719
Speaker 3: nothing to do with this and h and by the way,

1000
00:47:52,760 --> 00:47:55,319
Speaker 3: we're the rbas and interest of trimming, because he then

1001
00:47:55,400 --> 00:47:58,600
Speaker 3: started sort of presenting an argument without actually saying that

1002
00:47:58,600 --> 00:48:01,319
Speaker 3: we're going to get an interest rate reduction. We did

1003
00:48:01,320 --> 00:48:04,440
Speaker 3: get anustray reduction, but it doesn't matter and Jim then's

1004
00:48:04,480 --> 00:48:07,360
Speaker 3: got stuck in a million. Then so the deal started,

1005
00:48:07,480 --> 00:48:09,720
Speaker 3: but we shot hands when he came into the podcast.

1006
00:48:09,719 --> 00:48:13,120
Speaker 3: But maybe you just explain because that is I think

1007
00:48:13,120 --> 00:48:15,720
Speaker 3: it's not a structural change, but it's quite an important difference.

1008
00:48:15,840 --> 00:48:18,560
Speaker 2: They've put it. They've put a greater emphasis on it.

1009
00:48:18,680 --> 00:48:21,520
Speaker 2: RBA does because just to get back to the headline figure,

1010
00:48:21,560 --> 00:48:23,920
Speaker 2: that is all of those one hundred and ten thousand items.

1011
00:48:24,000 --> 00:48:25,719
Speaker 2: It's just the rate of inflation. So if the price

1012
00:48:25,719 --> 00:48:28,359
Speaker 2: of lettics do go up because of the flood, that's

1013
00:48:28,400 --> 00:48:30,960
Speaker 2: part of your inflation rate. So the trimmed mean that

1014
00:48:31,000 --> 00:48:35,880
Speaker 2: Mark's talking about all the underlying inflation rate is designed

1015
00:48:35,880 --> 00:48:39,200
Speaker 2: to take out the things that have a very large

1016
00:48:39,600 --> 00:48:43,880
Speaker 2: but probably one off increase in price or decrease in price.

1017
00:48:44,239 --> 00:48:45,719
Speaker 2: So when letters is are greating and they go from

1018
00:48:45,719 --> 00:48:48,120
Speaker 2: ten bucks back to three backs, you know that's going

1019
00:48:48,200 --> 00:48:50,600
Speaker 2: to be next quarter is going to be negative, so

1020
00:48:50,640 --> 00:48:53,520
Speaker 2: they trim those things out. Well, another thing that is

1021
00:48:53,560 --> 00:48:55,799
Speaker 2: often trimmed down seems like tobacco, because of course the

1022
00:48:55,880 --> 00:48:59,680
Speaker 2: excise on tobacco is amazing, so you're not going to

1023
00:48:59,719 --> 00:49:02,000
Speaker 2: hike ins because the government's putting an extra excise on

1024
00:49:02,000 --> 00:49:05,120
Speaker 2: too back of a because that's a health issue. Sure

1025
00:49:05,360 --> 00:49:09,160
Speaker 2: it's a cost of living, but it's not your underlying

1026
00:49:09,200 --> 00:49:11,880
Speaker 2: inflation rate. And they try to get that underlying or

1027
00:49:11,920 --> 00:49:18,120
Speaker 2: trimmed an inflation rate as a measure of demand and

1028
00:49:18,160 --> 00:49:20,879
Speaker 2: then pricing pressures in the economy. So if demand's running

1029
00:49:20,920 --> 00:49:23,439
Speaker 2: hot and everybody's putting up their prices because they're being

1030
00:49:23,560 --> 00:49:26,120
Speaker 2: run off their feet with people coming into their shop

1031
00:49:26,200 --> 00:49:28,480
Speaker 2: or whatever, it is, and you're putting up your price,

1032
00:49:28,520 --> 00:49:30,120
Speaker 2: and you can put on the prices and get away

1033
00:49:30,160 --> 00:49:33,240
Speaker 2: with it this time. That's what they're guarding against, rather

1034
00:49:33,320 --> 00:49:36,640
Speaker 2: than a conflict in the Middle East putting up or

1035
00:49:36,800 --> 00:49:40,719
Speaker 2: downward pressure on oil prices, or as I said, or

1036
00:49:40,719 --> 00:49:43,000
Speaker 2: the other one that they've trimmed out the last couple

1037
00:49:43,040 --> 00:49:47,560
Speaker 2: of quarters is the electricity rebate. You know how we've

1038
00:49:47,560 --> 00:49:49,840
Speaker 2: got the seventy five bucks a quarter from the government

1039
00:49:49,960 --> 00:49:52,440
Speaker 2: is a cost of living relief on our electricity bills.

1040
00:49:53,400 --> 00:49:56,439
Speaker 2: That's not inflation. Sure, it's a lower cost of living, yep,

1041
00:49:56,560 --> 00:49:59,000
Speaker 2: we're saving seventy five bucks a quarters. But it's not

1042
00:49:59,080 --> 00:50:01,600
Speaker 2: your true inflation rate, because when that's up to the

1043
00:50:01,680 --> 00:50:03,359
Speaker 2: ends at the end of this year, I think it is,

1044
00:50:03,840 --> 00:50:06,880
Speaker 2: it'll jump back up. We'll pay what about prices.

1045
00:50:06,600 --> 00:50:09,320
Speaker 1: For which potential means? So you trim out things.

1046
00:50:09,040 --> 00:50:13,560
Speaker 2: That you know are either temporary or one off or

1047
00:50:14,520 --> 00:50:19,360
Speaker 2: not really driving your true inflation, your underlying inflation measure.

1048
00:50:19,480 --> 00:50:22,319
Speaker 3: So when the ABS puts out its numbers, it's next

1049
00:50:22,400 --> 00:50:27,279
Speaker 3: set of numbers, which will which will be July. When

1050
00:50:27,280 --> 00:50:29,560
Speaker 3: you see it'll give you the headline inflation at the top.

1051
00:50:29,800 --> 00:50:33,319
Speaker 3: But just keep scrolling down, it's about fifty lines down.

1052
00:50:34,000 --> 00:50:35,719
Speaker 1: They'll start to talk about the trim mean. They do

1053
00:50:35,760 --> 00:50:37,120
Speaker 1: the calculation for you and they tell you what the

1054
00:50:37,239 --> 00:50:37,600
Speaker 1: number is.

1055
00:50:37,880 --> 00:50:40,799
Speaker 3: And again you're looking for a trim mean that has

1056
00:50:40,880 --> 00:50:43,840
Speaker 3: got it to in front of it and hopefully closer

1057
00:50:43,880 --> 00:50:46,719
Speaker 3: to two and a half than three. So and that's

1058
00:50:46,760 --> 00:50:48,719
Speaker 3: the sort of thing that will encourage the IBA to

1059
00:50:48,920 --> 00:50:51,719
Speaker 3: maybe look at putting interest rates down again. So just

1060
00:50:51,960 --> 00:50:55,040
Speaker 3: so so you've got the unemployment number, you know where

1061
00:50:55,040 --> 00:50:58,640
Speaker 3: the NRU is now the unemployment number as up there

1062
00:50:59,080 --> 00:51:01,320
Speaker 3: neck and neck with the CPI number. We now know

1063
00:51:01,360 --> 00:51:03,880
Speaker 3: where the CBI number is. You know, you know now

1064
00:51:04,000 --> 00:51:07,399
Speaker 3: know where to find it. The third thing, he's got

1065
00:51:07,440 --> 00:51:09,200
Speaker 3: a reasonable list, but we're just going to go the

1066
00:51:09,719 --> 00:51:11,200
Speaker 3: third one is on your.

1067
00:51:11,080 --> 00:51:13,759
Speaker 1: List GDP exon growth, which is what we talked about,

1068
00:51:13,840 --> 00:51:14,000
Speaker 1: right and.

1069
00:51:14,360 --> 00:51:15,800
Speaker 2: We sort of did to the private and public and

1070
00:51:15,800 --> 00:51:17,439
Speaker 2: the composition of GDP growth.

1071
00:51:17,480 --> 00:51:19,279
Speaker 1: So what's the numbers looking for?

1072
00:51:20,719 --> 00:51:23,840
Speaker 2: Again they don't put the hand on the chest.

1073
00:51:24,080 --> 00:51:26,080
Speaker 3: Is what is the budget? What is the budget? Bait

1074
00:51:26,080 --> 00:51:30,080
Speaker 3: two two point seventy five, And that's pretty important because

1075
00:51:30,160 --> 00:51:30,640
Speaker 3: it is.

1076
00:51:30,840 --> 00:51:32,840
Speaker 2: And we want it, as we're saying, as Mark LANFID

1077
00:51:33,520 --> 00:51:36,080
Speaker 2: many times, not just today, but in years gone by,

1078
00:51:36,480 --> 00:51:38,799
Speaker 2: we wanted growing economy. It's a good thing to have

1079
00:51:38,880 --> 00:51:41,759
Speaker 2: economic growth because it means that we're creating jobs, we're

1080
00:51:41,760 --> 00:51:43,520
Speaker 2: creating improving in living standards.

1081
00:51:43,840 --> 00:51:45,000
Speaker 1: We want it to.

1082
00:51:44,920 --> 00:51:46,799
Speaker 3: Grow with him, what's the long term number for us?

1083
00:51:47,560 --> 00:51:48,239
Speaker 2: How well has it been?

1084
00:51:48,760 --> 00:51:50,080
Speaker 1: It is slowing down a bit.

1085
00:51:50,640 --> 00:51:52,680
Speaker 2: Back back in the day, it used to be about

1086
00:51:52,719 --> 00:51:55,800
Speaker 2: three point twenty five, then it went to about three.

1087
00:51:56,480 --> 00:51:59,840
Speaker 2: The budget numbers which came out in March were about

1088
00:51:59,840 --> 00:52:01,640
Speaker 2: two two points seventy five. So that was a bit

1089
00:52:01,680 --> 00:52:03,239
Speaker 2: of a sneaky thing that was slipped into the budge

1090
00:52:03,280 --> 00:52:03,840
Speaker 2: because you and I.

1091
00:52:03,920 --> 00:52:06,680
Speaker 1: Used to think it was three yep, and well what

1092
00:52:06,760 --> 00:52:09,000
Speaker 1: was three? I think?

1093
00:52:09,239 --> 00:52:11,040
Speaker 2: And the RBA would be saying it's about two point

1094
00:52:11,120 --> 00:52:14,560
Speaker 2: seventy five and that's GDP grade. So that's the combination

1095
00:52:14,760 --> 00:52:19,839
Speaker 2: or the addition of consumption, private sector and government investment

1096
00:52:20,200 --> 00:52:23,560
Speaker 2: experts minus inputs. So if that real growth in the

1097
00:52:23,600 --> 00:52:26,919
Speaker 2: economy is two point seventy five per annum, yeah, that's

1098
00:52:26,920 --> 00:52:29,719
Speaker 2: pretty good. And of course, you know, just to sort

1099
00:52:29,760 --> 00:52:32,520
Speaker 2: of put this into context, where we get negative GDP

1100
00:52:32,680 --> 00:52:36,200
Speaker 2: so outputs falling, that's a recession. You know, for two quarters,

1101
00:52:36,239 --> 00:52:38,560
Speaker 2: and that's what we don't want to go Heaven forbid,

1102
00:52:38,719 --> 00:52:39,880
Speaker 2: we don't want recessis they're horrible.

1103
00:52:39,960 --> 00:52:42,480
Speaker 3: So they're the three main grow your economy. And that

1104
00:52:42,560 --> 00:52:44,839
Speaker 3: also comes to gets putted by the ABS. By the way,

1105
00:52:45,000 --> 00:52:47,000
Speaker 3: the RBA does not see the numbers before all of us,

1106
00:52:47,280 --> 00:52:49,279
Speaker 3: so numbers available to us on the same day, at

1107
00:52:49,280 --> 00:52:51,840
Speaker 3: the same minute. Nobody gets to see it, except or

1108
00:52:51,840 --> 00:52:53,200
Speaker 3: the people in the ABS.

1109
00:52:53,239 --> 00:52:53,880
Speaker 1: We get to see it.

1110
00:52:53,920 --> 00:52:56,840
Speaker 3: But I'm just saying generally speaking, they're all sworn of secrecy,

1111
00:52:56,840 --> 00:52:57,239
Speaker 3: et cetera.

1112
00:52:57,640 --> 00:52:59,080
Speaker 1: But nobody really knows the number.

1113
00:52:59,160 --> 00:53:00,960
Speaker 3: So we know where we all see the number at

1114
00:53:00,960 --> 00:53:03,279
Speaker 3: the same moment that the RBA sees the number. Then

1115
00:53:03,320 --> 00:53:04,960
Speaker 3: the RBA has the meeting and then they make a

1116
00:53:04,960 --> 00:53:08,120
Speaker 3: decision on interest rates. If I could just turn all

1117
00:53:08,160 --> 00:53:10,040
Speaker 3: this around, so I think that's a pretty good coverage

1118
00:53:10,360 --> 00:53:12,560
Speaker 3: of where we're at. You know, we know what the

1119
00:53:12,560 --> 00:53:14,520
Speaker 3: money markets are saying. You know, the money markers are

1120
00:53:14,520 --> 00:53:19,920
Speaker 3: saying two to three rate reductions this year. Sometime we'll

1121
00:53:19,960 --> 00:53:22,200
Speaker 3: see what happens, and there's no point us looking at

1122
00:53:22,239 --> 00:53:25,520
Speaker 3: may it goes. I mean, you know, right now, what

1123
00:53:25,560 --> 00:53:26,920
Speaker 3: do you think in the case it's done.

1124
00:53:27,000 --> 00:53:28,400
Speaker 1: Look at it. It's a rate reduction.

1125
00:53:28,600 --> 00:53:30,919
Speaker 2: The rate reductions there and the inflation a couple of things.

1126
00:53:30,960 --> 00:53:34,600
Speaker 2: Mark just thirty second. Yeah, there'll there'll be a rate

1127
00:53:34,600 --> 00:53:38,120
Speaker 2: cut in May, probably twenty five, almost certainly twenty.

1128
00:53:37,840 --> 00:53:40,640
Speaker 3: Five sevente thh rate is May twenty is.

1129
00:53:40,640 --> 00:53:43,000
Speaker 2: May two thirty pm. Look at RBA dot co. Do

1130
00:53:43,080 --> 00:53:46,960
Speaker 2: are you two thirty and like one second, that's the number.

1131
00:53:47,080 --> 00:53:49,640
Speaker 2: Twenty five point rate cut. The inflation number which came

1132
00:53:49,680 --> 00:53:52,279
Speaker 2: out what was that about two weeks ago now was

1133
00:53:52,640 --> 00:53:56,200
Speaker 2: two point four. The trimmed means so you go, came

1134
00:53:56,280 --> 00:54:00,480
Speaker 2: at two point nine and the run rate was converging

1135
00:54:00,520 --> 00:54:02,040
Speaker 2: to two and a half. So that's what the RBA

1136
00:54:02,080 --> 00:54:04,080
Speaker 2: will be happy about. So they'll be a little bit cautious.

1137
00:54:04,120 --> 00:54:06,800
Speaker 2: So twenty five and they'll use all the nice words

1138
00:54:06,800 --> 00:54:10,080
Speaker 2: to say, we're still worried about the outlook. And the

1139
00:54:10,120 --> 00:54:15,000
Speaker 2: unemployment number was just a little bit weak. It wasn't bad,

1140
00:54:15,040 --> 00:54:16,600
Speaker 2: you know, as we've discussed the neighbor and all the

1141
00:54:16,640 --> 00:54:19,000
Speaker 2: rest of it. It was just a little bit weaker.

1142
00:54:19,040 --> 00:54:23,239
Speaker 2: And things like job vacancies, job ads, you know, the

1143
00:54:23,400 --> 00:54:26,359
Speaker 2: Seek job Ads series is just tilting down. So saying

1144
00:54:26,400 --> 00:54:29,520
Speaker 2: that demand for labor is slowing down, maybe the unemployment

1145
00:54:29,560 --> 00:54:32,560
Speaker 2: rate will be skewed up, the RBA will be ahead,

1146
00:54:32,719 --> 00:54:34,680
Speaker 2: like trying to head it off at the past from

1147
00:54:34,719 --> 00:54:35,520
Speaker 2: getting too high.

1148
00:54:35,760 --> 00:54:38,359
Speaker 3: I think I should just just as we're speaking that

1149
00:54:38,400 --> 00:54:41,000
Speaker 3: there was just one more slight change as the RBA

1150
00:54:41,120 --> 00:54:43,240
Speaker 3: is now doing that they haven't really done in the past,

1151
00:54:43,400 --> 00:54:47,440
Speaker 3: or at least I don't. I don't think so, or

1152
00:54:47,480 --> 00:54:50,120
Speaker 3: have as much weight on it in the past. When

1153
00:54:50,160 --> 00:54:53,839
Speaker 3: they're looking inflation they look at or CPI number just

1154
00:54:53,960 --> 00:54:55,720
Speaker 3: to say, well, you know where we have a CPI.

1155
00:54:56,680 --> 00:55:01,680
Speaker 3: They've looked at inflation rate the the ABS has given

1156
00:55:01,760 --> 00:55:05,239
Speaker 3: us for the quarter and also the two months before that,

1157
00:55:05,800 --> 00:55:09,480
Speaker 3: so that'll be the quarter's just passed and every quarter

1158
00:55:09,960 --> 00:55:11,560
Speaker 3: before that, and they added it all up and they

1159
00:55:11,600 --> 00:55:14,759
Speaker 3: say there's one years with inflation. That's two point four

1160
00:55:14,760 --> 00:55:18,400
Speaker 3: o headline headline, and it might be two point nine trimmed.

1161
00:55:19,719 --> 00:55:22,120
Speaker 3: What the RBA has just been doing a little bit

1162
00:55:22,120 --> 00:55:25,920
Speaker 3: more of lately, which I've never really knowing, they've never

1163
00:55:25,960 --> 00:55:28,640
Speaker 3: really done it before, but they did it for.

1164
00:55:28,560 --> 00:55:29,440
Speaker 1: The February meeting.

1165
00:55:29,480 --> 00:55:33,200
Speaker 3: Now. I don't know whether this is so. If you

1166
00:55:33,280 --> 00:55:35,440
Speaker 3: looked at a lot of people were saying, and you know,

1167
00:55:35,560 --> 00:55:38,120
Speaker 3: Warren Hogan is a good example, a lot with Chris Joy,

1168
00:55:38,239 --> 00:55:41,760
Speaker 3: a lot of and a lot we're saying for the

1169
00:55:41,800 --> 00:55:45,440
Speaker 3: February the eighteenth meeting, seventeenth and eighteenth meeting, the announcements

1170
00:55:45,440 --> 00:55:48,239
Speaker 3: on the eighth they were saying, there's no way we

1171
00:55:48,280 --> 00:55:49,520
Speaker 3: should be getting a rate reduction.

1172
00:55:49,719 --> 00:55:51,239
Speaker 1: Take politics out and all that sort stuff.

1173
00:55:51,280 --> 00:55:53,960
Speaker 3: There's no way should get a rate reduction because if

1174
00:55:53,960 --> 00:55:58,760
Speaker 3: you look at the inflation number from for the December

1175
00:55:58,800 --> 00:56:03,279
Speaker 3: quarter and every quarter before that, it's out.

1176
00:56:03,400 --> 00:56:05,279
Speaker 1: It's out of range. It's out of the two three

1177
00:56:05,320 --> 00:56:08,839
Speaker 1: percent and three point two head the trim to mean,

1178
00:56:09,120 --> 00:56:09,399
Speaker 1: and you.

1179
00:56:09,320 --> 00:56:12,880
Speaker 3: Should not get a rate reduction because of it, because

1180
00:56:12,880 --> 00:56:18,080
Speaker 3: it's not in the band. Maybe you could explain everybody

1181
00:56:18,080 --> 00:56:22,440
Speaker 3: what she did to justify she did justify the rate reduction,

1182
00:56:22,600 --> 00:56:25,880
Speaker 3: or or because it was point five.

1183
00:56:26,080 --> 00:56:29,080
Speaker 2: For the quarter for the I'll try to I'll try

1184
00:56:29,080 --> 00:56:30,920
Speaker 2: to remember what the actual inflation numbers were. It was

1185
00:56:30,920 --> 00:56:33,240
Speaker 2: point but to get an annual figure of three point

1186
00:56:33,239 --> 00:56:36,919
Speaker 2: two in the year to December so last, you need

1187
00:56:36,920 --> 00:56:40,160
Speaker 2: the four quarter, so one percent in the March quarter,

1188
00:56:40,239 --> 00:56:43,000
Speaker 2: one percent in the June quarterero point seven in the

1189
00:56:43,040 --> 00:56:46,880
Speaker 2: September quarter point five in the December quarter annual life

1190
00:56:46,920 --> 00:56:47,520
Speaker 2: three point.

1191
00:56:47,400 --> 00:56:49,799
Speaker 1: Two, in which case you would not have a reduction.

1192
00:56:49,880 --> 00:56:52,360
Speaker 2: Correct if you look at the three point two however

1193
00:56:53,600 --> 00:56:59,680
Speaker 2: underlined However, if you look at the last two quarters,

1194
00:57:00,080 --> 00:57:03,400
Speaker 2: the point seven and the point five, and remembering that

1195
00:57:03,400 --> 00:57:05,640
Speaker 2: that annual figure is made up of the March quarter

1196
00:57:05,680 --> 00:57:07,360
Speaker 2: twenty twenty four, that's ain't in.

1197
00:57:07,480 --> 00:57:09,480
Speaker 1: History because we've had light high interest rates for long

1198
00:57:09,520 --> 00:57:10,040
Speaker 1: because of it.

1199
00:57:10,800 --> 00:57:14,640
Speaker 2: Yes, and so what the RBA did in February when

1200
00:57:14,680 --> 00:57:15,279
Speaker 2: they announced the.

1201
00:57:15,320 --> 00:57:17,040
Speaker 1: Rate, I've never had to do this before, but anyway,

1202
00:57:17,120 --> 00:57:17,840
Speaker 1: I said.

1203
00:57:17,720 --> 00:57:22,040
Speaker 2: The point five for a quarter annualize that's season did

1204
00:57:22,080 --> 00:57:25,760
Speaker 2: to multipipe by four. Basically, it's two percent, and when

1205
00:57:25,800 --> 00:57:29,439
Speaker 2: we get the subsequent quarters, those one percent will drop

1206
00:57:29,480 --> 00:57:31,960
Speaker 2: out of your run rate. You know you're moving along.

1207
00:57:32,000 --> 00:57:34,080
Speaker 2: You eliminate the last one, you add the new one.

1208
00:57:34,120 --> 00:57:35,720
Speaker 2: Eliminate the last one, add the new one, and that's

1209
00:57:35,720 --> 00:57:38,680
Speaker 2: how you get your year on year price change. So

1210
00:57:38,720 --> 00:57:41,200
Speaker 2: we know that the well, the one did drop out

1211
00:57:41,440 --> 00:57:43,760
Speaker 2: when we got the March quarter numbers ten days ago,

1212
00:57:44,320 --> 00:57:46,320
Speaker 2: and it was replaced with a zero point seven. So

1213
00:57:46,360 --> 00:57:48,040
Speaker 2: we went from three point two to two point nine

1214
00:57:49,200 --> 00:57:52,160
Speaker 2: next quarter, we've got another one point zero dropping out

1215
00:57:52,240 --> 00:57:54,080
Speaker 2: due just so we get a point seven for the

1216
00:57:54,160 --> 00:57:55,680
Speaker 2: dune quarter. And I must confess, I don't know.

1217
00:57:55,680 --> 00:57:58,320
Speaker 3: What we've been seeing the dune quarter for twenty twenty four.

1218
00:57:58,200 --> 00:58:01,080
Speaker 2: Drop out correct at the end of July, it's one

1219
00:58:01,120 --> 00:58:03,240
Speaker 2: and it's a one point zero. So just say we

1220
00:58:03,280 --> 00:58:06,600
Speaker 2: get point seven again, you know whatever, so that two

1221
00:58:06,640 --> 00:58:09,160
Speaker 2: point nine all of a sudden becomes two point six

1222
00:58:09,800 --> 00:58:12,880
Speaker 2: without any magic. If we get a point five for

1223
00:58:12,920 --> 00:58:15,920
Speaker 2: the quarter, we get two point four, you know, because

1224
00:58:15,960 --> 00:58:17,840
Speaker 2: the one is dropping out of your un rate.

1225
00:58:18,200 --> 00:58:21,040
Speaker 1: But they've never done that in the past, so then no, that's.

1226
00:58:20,920 --> 00:58:25,360
Speaker 3: Been It's quite physical and like you know, like only

1227
00:58:25,360 --> 00:58:27,760
Speaker 3: a few sort of people picked it up. Yeah, because

1228
00:58:27,800 --> 00:58:30,840
Speaker 3: we couldn't really but work it out. But she kept

1229
00:58:31,360 --> 00:58:35,440
Speaker 3: in a press conference, she kept announced she's she's sort

1230
00:58:35,440 --> 00:58:36,320
Speaker 3: of surprised the market.

1231
00:58:37,080 --> 00:58:40,200
Speaker 2: Yes, yes, and it was also to do with the

1232
00:58:40,320 --> 00:58:42,600
Speaker 2: think about the RBA. You and I have learnt this

1233
00:58:42,640 --> 00:58:45,640
Speaker 2: over goodness, says how many years. It's what they do

1234
00:58:45,680 --> 00:58:47,520
Speaker 2: is important. Obviously, we cut rates, we hike them, we

1235
00:58:47,560 --> 00:58:50,400
Speaker 2: keep them steady. And now at the press conference, which

1236
00:58:50,440 --> 00:58:51,760
Speaker 2: I love, by the way, I think that's a really

1237
00:58:51,760 --> 00:58:54,000
Speaker 2: good initiative. So the governor does give a press conference

1238
00:58:54,000 --> 00:58:57,840
Speaker 2: after every each after every interstate announcement. It's a chance

1239
00:58:57,880 --> 00:59:00,720
Speaker 2: for her to explain to what she says is just

1240
00:59:00,760 --> 00:59:02,280
Speaker 2: as important as what she does, so.

1241
00:59:02,200 --> 00:59:03,600
Speaker 1: We don't have to interpret it as hard.

1242
00:59:03,720 --> 00:59:07,720
Speaker 2: Yes, and the quality of journalists now is quite good, genuinely.

1243
00:59:07,720 --> 00:59:10,600
Speaker 2: You see, you're getting John Kio there and Stutch Breeds there,

1244
00:59:10,640 --> 00:59:13,760
Speaker 2: and the Bloomberg journals are there, and they're all asking

1245
00:59:13,800 --> 00:59:16,280
Speaker 2: really good questions and she answers them. Honestly, I think

1246
00:59:16,280 --> 00:59:18,440
Speaker 2: she genuinely does. It's not sort of like this, Oh

1247
00:59:18,480 --> 00:59:20,240
Speaker 2: I'm the RBA governor and I'm a bit too precious.

1248
00:59:20,280 --> 00:59:23,080
Speaker 2: I think she's fantastic, by the way. So in that

1249
00:59:23,160 --> 00:59:25,440
Speaker 2: how long roughly and our long press conference, she'll be

1250
00:59:25,520 --> 00:59:27,520
Speaker 2: grilled on well, why did you cut why didn't you

1251
00:59:27,520 --> 00:59:29,280
Speaker 2: why didn't you do more? What are you doing next month?

1252
00:59:29,800 --> 00:59:32,720
Speaker 2: Tell us about maybroo or something. So they ask lots

1253
00:59:32,720 --> 00:59:37,120
Speaker 2: of questions, and that is really enlightening in setting the

1254
00:59:37,120 --> 00:59:40,760
Speaker 2: framework for how we economists think about the next month

1255
00:59:40,840 --> 00:59:43,280
Speaker 2: or two. Because if she says, oh, we cut rates

1256
00:59:43,320 --> 00:59:45,680
Speaker 2: and we're happy to do it because interest rates were

1257
00:59:45,720 --> 00:59:49,040
Speaker 2: really oppressive, we're still not sure whether inflation is going

1258
00:59:49,080 --> 00:59:50,800
Speaker 2: to be coming down. But we thought we'd take like

1259
00:59:50,840 --> 00:59:53,400
Speaker 2: an insurance rate cut, and it's nothing. Blah blah blah

1260
00:59:53,400 --> 00:59:56,400
Speaker 2: blah blah. Okay, so there's still causes and low and behold.

1261
00:59:56,560 --> 00:59:59,520
Speaker 2: Come the April meeting, they didn't cut. So she sort

1262
00:59:59,560 --> 01:00:05,360
Speaker 2: of signaled in her comments that here's one we'll just

1263
01:00:05,440 --> 01:00:08,400
Speaker 2: sit back for a few weeks. Coming up to May,

1264
01:00:08,560 --> 01:00:10,720
Speaker 2: you know, we'll probably cut, and then what she says

1265
01:00:10,760 --> 01:00:12,520
Speaker 2: will be just as important as what she does on

1266
01:00:12,560 --> 01:00:13,520
Speaker 2: the twentieth of May and.

1267
01:00:13,480 --> 01:00:15,440
Speaker 3: What she did in the May. What she's doing in

1268
01:00:15,440 --> 01:00:18,600
Speaker 3: the May decision is off the back of the April

1269
01:00:18,600 --> 01:00:21,000
Speaker 3: twenty ninth numbers, which she didn't have in the last meeting,

1270
01:00:21,040 --> 01:00:24,080
Speaker 3: so all she had was the previous months, the previous

1271
01:00:24,240 --> 01:00:29,080
Speaker 3: quarter quarter information. So I think that's fair. I just

1272
01:00:29,160 --> 01:00:30,919
Speaker 3: I think two pressing things we need to talk about.

1273
01:00:31,120 --> 01:00:35,440
Speaker 3: One of which we need to talk about is geopolitical stuff.

1274
01:00:35,520 --> 01:00:38,120
Speaker 3: So you know, the big the big things in the

1275
01:00:38,120 --> 01:00:40,520
Speaker 3: world today. One of the big things of WILL today

1276
01:00:40,560 --> 01:00:44,680
Speaker 3: is geopolitics. Another one is AI. But AI does get

1277
01:00:44,760 --> 01:00:47,160
Speaker 3: I'm not gonna talk about aids. It goes to productivity.

1278
01:00:47,160 --> 01:00:49,520
Speaker 3: To some extent to a large extent, and it is

1279
01:00:49,520 --> 01:00:51,520
Speaker 3: a bit of a scary topic, but it's too much speculation.

1280
01:00:51,680 --> 01:00:54,920
Speaker 3: So relative to how it affects house prices and interest rates,

1281
01:00:54,920 --> 01:00:58,080
Speaker 3: I don't think we'll get into that today. But geopolitics

1282
01:00:58,120 --> 01:01:00,720
Speaker 3: is an issue. We've seen what happened and during the

1283
01:01:00,800 --> 01:01:03,240
Speaker 3: when Russia first invaded Ukraine, we saw the price of

1284
01:01:03,280 --> 01:01:07,560
Speaker 3: a lot of things just escalate. We now have India

1285
01:01:07,640 --> 01:01:11,040
Speaker 3: and Pakistan going hard at it, which you probably guys

1286
01:01:11,080 --> 01:01:15,760
Speaker 3: have caught up with. What do you see And geopolitically

1287
01:01:15,760 --> 01:01:19,440
Speaker 3: we have Trump with his tariffs, another geopolitical So we

1288
01:01:19,480 --> 01:01:23,680
Speaker 3: are living in an era of geopolitical change and the

1289
01:01:23,760 --> 01:01:27,080
Speaker 3: geopolitics puts pressure on everything everywhere, not just Australia but

1290
01:01:27,160 --> 01:01:31,000
Speaker 3: the whole world. So because we are a global economy

1291
01:01:31,280 --> 01:01:33,440
Speaker 3: which is an operator on the own. So what do

1292
01:01:33,480 --> 01:01:36,520
Speaker 3: you think about the geopolitics, Steve, where do you think?

1293
01:01:36,960 --> 01:01:38,800
Speaker 3: What do you think the RBA is because they always

1294
01:01:38,840 --> 01:01:40,280
Speaker 3: mention it, they do mention it.

1295
01:01:40,640 --> 01:01:42,680
Speaker 1: What do you think the RBA be thinking about what's

1296
01:01:42,720 --> 01:01:47,040
Speaker 1: going on? And for example, China Taiwan, China Taiwan.

1297
01:01:47,440 --> 01:01:50,320
Speaker 2: Goodness knows how that gets resolved. And this is not.

1298
01:01:50,280 --> 01:01:52,720
Speaker 3: A forecast Middle East as well.

1299
01:01:52,840 --> 01:01:56,200
Speaker 2: Oh yes, the lingering thing in Israel and gha Gars

1300
01:01:56,240 --> 01:01:57,920
Speaker 2: or whatever. There's all this and stuff, So there's leaving

1301
01:01:57,960 --> 01:02:03,000
Speaker 2: these little things little things. They're big things. The effect

1302
01:02:03,040 --> 01:02:06,080
Speaker 2: of these things and the Trump tariffs and the retaliation

1303
01:02:06,240 --> 01:02:09,960
Speaker 2: from the Chinese against them, and even though they're negotiating,

1304
01:02:10,040 --> 01:02:13,760
Speaker 2: and who knows where it ends. No one does. I

1305
01:02:13,760 --> 01:02:15,480
Speaker 2: don't think mister Trup knows where it's going to end.

1306
01:02:15,720 --> 01:02:17,600
Speaker 2: But we do know. One thing that we do know

1307
01:02:17,640 --> 01:02:19,960
Speaker 2: about these things is that they're very unsettling for the

1308
01:02:20,120 --> 01:02:24,280
Speaker 2: business community. And you think about it if you're a

1309
01:02:24,320 --> 01:02:27,640
Speaker 2: business person and you're exporting to the US, or you're

1310
01:02:27,680 --> 01:02:32,200
Speaker 2: importing from China, or you've got some sort of trade

1311
01:02:32,240 --> 01:02:35,600
Speaker 2: agreements into India, or you know, you're heavily reliant on

1312
01:02:35,800 --> 01:02:37,680
Speaker 2: energy the oil price, which by the way, is really

1313
01:02:37,720 --> 01:02:42,280
Speaker 2: low at the moment, which is something you don't necessarily

1314
01:02:42,400 --> 01:02:45,240
Speaker 2: change your behavior because I'm not quite sure what Trump

1315
01:02:45,280 --> 01:02:48,720
Speaker 2: and China are going to do with tariffs, but you

1316
01:02:48,880 --> 01:02:51,080
Speaker 2: sort of think, well that if it turns out to

1317
01:02:51,080 --> 01:02:54,080
Speaker 2: be really nasty, my really good business plan that I've

1318
01:02:54,080 --> 01:02:56,400
Speaker 2: got to export into the US and import goods from

1319
01:02:56,480 --> 01:02:59,320
Speaker 2: China that could be thrown off course and just think

1320
01:02:59,360 --> 01:03:01,840
Speaker 2: back to COVID. Now, I don't think I don't think

1321
01:03:01,960 --> 01:03:04,200
Speaker 2: touch wood. They're not as big as COVID. But you know,

1322
01:03:04,240 --> 01:03:06,440
Speaker 2: a lot of businesses had great plans went barely up

1323
01:03:06,480 --> 01:03:09,720
Speaker 2: because of bloody COVID coming along and closing their businesses

1324
01:03:09,720 --> 01:03:14,760
Speaker 2: down unfortunately. So these geopolitical things are just generating uncertainty

1325
01:03:15,680 --> 01:03:21,120
Speaker 2: and they generate and Australia is very dependent on the

1326
01:03:21,120 --> 01:03:23,640
Speaker 2: export sector. Now this is something that again, God, I

1327
01:03:23,680 --> 01:03:25,960
Speaker 2: love my numbers. Do you know that a quarter of

1328
01:03:26,000 --> 01:03:32,000
Speaker 2: Australia's economic output is linked to international trade. It's actually

1329
01:03:32,000 --> 01:03:35,520
Speaker 2: four times bigger than housing construction. So what happens in

1330
01:03:35,560 --> 01:03:39,680
Speaker 2: the global economy is really important to us, It really is.

1331
01:03:39,760 --> 01:03:42,120
Speaker 2: And it's not just the iron ore price, yes that's

1332
01:03:42,160 --> 01:03:45,120
Speaker 2: really important, or the coal price. It is things like

1333
01:03:45,400 --> 01:03:48,240
Speaker 2: education services, It is things like tourism. You know, we

1334
01:03:49,160 --> 01:03:51,080
Speaker 2: foreign tests coming to a place like this. Who wouldn't

1335
01:03:51,120 --> 01:03:51,400
Speaker 2: you know.

1336
01:03:51,600 --> 01:03:53,960
Speaker 3: People should understand the room that education is our third

1337
01:03:54,000 --> 01:03:54,760
Speaker 3: largest exports.

1338
01:03:54,880 --> 01:03:57,760
Speaker 2: It's huge, yes, and while there issues there with population

1339
01:03:57,880 --> 01:04:00,440
Speaker 2: and inflows of people whatever, it's still a really big

1340
01:04:00,440 --> 01:04:06,240
Speaker 2: export owner. So if we have problems in the international economy,

1341
01:04:06,640 --> 01:04:11,240
Speaker 2: So this conflict, either the military conflict or trade conflict,

1342
01:04:11,280 --> 01:04:14,120
Speaker 2: if we can call it, that causes the global economy

1343
01:04:14,120 --> 01:04:17,400
Speaker 2: to weaken. We will all of it, and particularly China.

1344
01:04:17,800 --> 01:04:21,960
Speaker 2: So China is probably the arguably the biggest soft spot

1345
01:04:22,000 --> 01:04:24,240
Speaker 2: for US because a third of all our exports go

1346
01:04:24,280 --> 01:04:27,720
Speaker 2: to China. So if China has a bit of an

1347
01:04:27,800 --> 01:04:31,640
Speaker 2: extended period of economic weakness, then we have a period

1348
01:04:31,680 --> 01:04:34,520
Speaker 2: of economic weakness. So this is this issue about the tariffs.

1349
01:04:34,520 --> 01:04:36,920
Speaker 2: I can just sort of focus on that for sixty seconds.

1350
01:04:37,600 --> 01:04:39,479
Speaker 2: We don't export a lot to the US. We don't

1351
01:04:39,520 --> 01:04:41,280
Speaker 2: have a big trade place. So the tariffs on the

1352
01:04:41,320 --> 01:04:45,200
Speaker 2: Australian industry, while the specific companies and businesses will be impacted,

1353
01:04:45,600 --> 01:04:47,400
Speaker 2: at the macro economy level, it's.

1354
01:04:47,280 --> 01:04:49,800
Speaker 1: Not a huge exports.

1355
01:04:49,600 --> 01:04:53,520
Speaker 2: It's not big, whereas thirty three percent of our exports

1356
01:04:53,560 --> 01:04:56,200
Speaker 2: go to China. And this is where it happens. So

1357
01:04:56,240 --> 01:04:57,920
Speaker 2: if the US and China one hundred and forty five

1358
01:04:57,920 --> 01:04:59,680
Speaker 2: percent tariffs and no, we're not going to sell you

1359
01:04:59,720 --> 01:05:03,960
Speaker 2: our and all this other conflict goes on, the Chinese

1360
01:05:04,000 --> 01:05:07,080
Speaker 2: economy weakens. Yep, it does we because it's not exporting

1361
01:05:07,080 --> 01:05:10,120
Speaker 2: its stuff to the US. Therefore, China will say to

1362
01:05:10,680 --> 01:05:13,600
Speaker 2: the Australian producers, we don't need as much as IONO

1363
01:05:13,680 --> 01:05:14,280
Speaker 2: as we used to.

1364
01:05:14,640 --> 01:05:15,160
Speaker 1: Oh we can't.

1365
01:05:15,160 --> 01:05:16,640
Speaker 2: You know, we've got a week economy, so we're not

1366
01:05:16,680 --> 01:05:20,000
Speaker 2: sending as many tourists down to Australia for holiday. We're

1367
01:05:20,080 --> 01:05:24,680
Speaker 2: hunkering down. They have a weak economy, and so Australia

1368
01:05:24,760 --> 01:05:27,840
Speaker 2: suffers on the back of a week Chinese economy, not

1369
01:05:28,120 --> 01:05:30,200
Speaker 2: necessarily directly due to the tariff.

1370
01:05:30,240 --> 01:05:32,280
Speaker 1: And that we go back to the beginning.

1371
01:05:32,400 --> 01:05:37,320
Speaker 3: That affects productivity GDP because the calculation of GDP is

1372
01:05:37,560 --> 01:05:40,880
Speaker 3: X minors M, which is exports minus imports. Exports come

1373
01:05:40,960 --> 01:05:44,120
Speaker 3: down down, then our GDP number comes down. Our GDP

1374
01:05:44,200 --> 01:05:48,080
Speaker 3: number starts to shift, sort of shift away from the

1375
01:05:48,080 --> 01:05:49,960
Speaker 3: two percent or the two point seventy five percent, which

1376
01:05:49,960 --> 01:05:51,960
Speaker 3: is our bed like one and a half games one

1377
01:05:51,960 --> 01:05:54,400
Speaker 3: and a half one. The RBA is going to say, WHOA,

1378
01:05:54,480 --> 01:06:00,160
Speaker 3: when you're going to through Stevens checklist inflation unemployment, do

1379
01:06:00,240 --> 01:06:04,200
Speaker 3: you see GDP is minus. The RBA doesn't because part

1380
01:06:04,240 --> 01:06:08,440
Speaker 3: of the RBA's job, the very original mandate outside of inflation,

1381
01:06:08,760 --> 01:06:14,120
Speaker 3: is two things. It's prosperity and welfare. So their job

1382
01:06:14,600 --> 01:06:18,840
Speaker 3: is to look after the prosperity and welfare of all Australians.

1383
01:06:18,920 --> 01:06:22,880
Speaker 3: Prosperity means growth. One way you measure prosperity growth and

1384
01:06:23,040 --> 01:06:26,360
Speaker 3: welfare means make sure people don't get badly effected by

1385
01:06:26,400 --> 01:06:29,280
Speaker 3: inflation for example. So there is no co order society

1386
01:06:29,320 --> 01:06:32,120
Speaker 3: who's suffering under inflational the cost of living. So that's

1387
01:06:32,440 --> 01:06:35,840
Speaker 3: that's the actual written into the legislative.

1388
01:06:35,240 --> 01:06:37,240
Speaker 2: Is it's ABA nineteen fifty.

1389
01:06:37,120 --> 01:06:39,880
Speaker 1: Nine Prosperity and welfare.

1390
01:06:39,960 --> 01:06:42,680
Speaker 3: So we measure prosperity by one of the nation of

1391
01:06:42,680 --> 01:06:46,160
Speaker 3: prosperous is GDP. So if they say well GDP is negative,

1392
01:06:46,280 --> 01:06:49,680
Speaker 3: Australia's not being prosperous. If we're not prosperous, we have

1393
01:06:49,720 --> 01:06:52,080
Speaker 3: to reduce interest rates. And the thing that one of

1394
01:06:52,080 --> 01:06:53,880
Speaker 3: the biggest, one of the things has been holding us

1395
01:06:54,000 --> 01:06:56,680
Speaker 3: up for a long time, apart from government expenditure on

1396
01:06:56,720 --> 01:07:03,720
Speaker 3: the GDP formula, has been the excess of exports over imports,

1397
01:07:04,200 --> 01:07:05,600
Speaker 3: China being our biggest exporter.

1398
01:07:06,080 --> 01:07:07,520
Speaker 2: We're running it. And this is the other thing that

1399
01:07:08,240 --> 01:07:10,400
Speaker 2: again I'm old. I remember Paul Keaty and Banana a

1400
01:07:10,440 --> 01:07:14,160
Speaker 2: public days to a lot of so young. But we

1401
01:07:14,200 --> 01:07:16,880
Speaker 2: had a real bad export problem back in the mid eighties.

1402
01:07:16,920 --> 01:07:19,120
Speaker 2: I think that was for the last I'd have to

1403
01:07:19,200 --> 01:07:20,880
Speaker 2: check my yet, but for many is we're running an

1404
01:07:20,880 --> 01:07:26,280
Speaker 2: international trade surplus now like Australia as an export powerhouse.

1405
01:07:26,320 --> 01:07:28,560
Speaker 2: It might sound funny because we think our housing and

1406
01:07:30,000 --> 01:07:34,600
Speaker 2: household consumption, we're okay. It is mainly resources, which is fine,

1407
01:07:34,640 --> 01:07:38,160
Speaker 2: your iron ore and coal and gas and whatnot. But

1408
01:07:38,200 --> 01:07:42,280
Speaker 2: we are exporting way more than we import. And for

1409
01:07:42,440 --> 01:07:45,960
Speaker 2: us that's again that's I'd say it's free money. That

1410
01:07:46,840 --> 01:07:49,560
Speaker 2: we're lucky or fortuitous, or we have a good corporate

1411
01:07:49,600 --> 01:07:52,320
Speaker 2: sector that is able to tap that part of our

1412
01:07:52,720 --> 01:07:55,760
Speaker 2: fortune and having lots of resources in the ground exporting

1413
01:07:55,800 --> 01:07:57,160
Speaker 2: to a country that wants to pay us a lot

1414
01:07:57,160 --> 01:08:00,360
Speaker 2: of money for them and by millions of tons of

1415
01:08:00,400 --> 01:08:02,440
Speaker 2: this stuff and so we get the benefit from that.

1416
01:08:02,720 --> 01:08:05,240
Speaker 3: And what's your saying from from West bac O mate

1417
01:08:05,280 --> 01:08:09,280
Speaker 3: Bill Evans. Bill Evans used to use that is retired now,

1418
01:08:09,320 --> 01:08:11,480
Speaker 3: but Bill, like you know, like one of the greatest

1419
01:08:11,560 --> 01:08:15,680
Speaker 3: banking ponymous time, Bill used to refer to this as

1420
01:08:15,760 --> 01:08:19,000
Speaker 3: the mining prosperity.

1421
01:08:18,560 --> 01:08:20,200
Speaker 1: Dividend for Australians.

1422
01:08:20,240 --> 01:08:23,639
Speaker 3: Yes, it actually has kept us our head above water

1423
01:08:23,680 --> 01:08:27,040
Speaker 3: during the GFC has pretty much maintained US for the

1424
01:08:27,040 --> 01:08:29,800
Speaker 3: whole period. So this is I can't put too fine

1425
01:08:29,800 --> 01:08:33,479
Speaker 3: a point on this. So Stevens point about the taroff

1426
01:08:33,520 --> 01:08:38,000
Speaker 3: war not relative to US individually as an organization as

1427
01:08:38,000 --> 01:08:42,679
Speaker 3: a country rather exporting to America, but the effect on China.

1428
01:08:42,760 --> 01:08:46,240
Speaker 3: So if Trump has the ability to achieve his what

1429
01:08:46,280 --> 01:08:49,120
Speaker 3: looks like to his outcome to weaken China, then that

1430
01:08:49,200 --> 01:08:52,879
Speaker 3: will cause us a problem in relation to GDP. GDP

1431
01:08:53,120 --> 01:08:55,960
Speaker 3: then will go down and to go back, we're probably

1432
01:08:56,000 --> 01:08:59,160
Speaker 3: going to see a period of interest rate not necessary reductions,

1433
01:08:59,160 --> 01:08:59,960
Speaker 3: but not going up.

1434
01:09:00,400 --> 01:09:02,120
Speaker 1: So yeah, that's sort of where at.

1435
01:09:02,400 --> 01:09:04,120
Speaker 2: That's where the Ausi dollar gets hit hard. Just to

1436
01:09:05,240 --> 01:09:07,439
Speaker 2: focusing on the Aussie dollar here, but it'd probably get

1437
01:09:07,520 --> 01:09:09,200
Speaker 2: crunched if we have that sort of snow.

1438
01:09:09,400 --> 01:09:11,680
Speaker 3: Yeah, and the Aussie dollar, by the way, is an

1439
01:09:11,680 --> 01:09:13,760
Speaker 3: important part of what the RBA looks at, but we're

1440
01:09:13,760 --> 01:09:15,120
Speaker 3: not going to I guess we don't have time to

1441
01:09:15,120 --> 01:09:18,120
Speaker 3: get into that today, Steve, So just where we are

1442
01:09:18,200 --> 01:09:21,280
Speaker 3: at today. Like and by the way, you know, economists

1443
01:09:21,680 --> 01:09:23,400
Speaker 3: don't know what's going in the future. They can just say,

1444
01:09:23,439 --> 01:09:27,320
Speaker 3: based on what's in front of me today, what do

1445
01:09:27,360 --> 01:09:28,679
Speaker 3: you see the next two months?

1446
01:09:28,720 --> 01:09:29,080
Speaker 1: Look like.

1447
01:09:29,600 --> 01:09:34,800
Speaker 2: Look, I'm cautiously optimistic. I'll preface that by saying that

1448
01:09:34,840 --> 01:09:36,880
Speaker 2: I do think the RBA will deliver those rate cuts

1449
01:09:36,920 --> 01:09:39,120
Speaker 2: that are priced in. Yeah, we're going to be seeing

1450
01:09:39,640 --> 01:09:43,200
Speaker 2: a number three four, you know, I'm going to the

1451
01:09:43,240 --> 01:09:45,320
Speaker 2: early part of twenty twenty six too, So not necessarily

1452
01:09:45,320 --> 01:09:47,439
Speaker 2: any on December, but yeah, we're going to see a

1453
01:09:47,439 --> 01:09:50,200
Speaker 2: series of rate cuts. Interest rates are still restrictive on

1454
01:09:50,240 --> 01:09:53,719
Speaker 2: the economy. They're still causing people financial stress. That cost

1455
01:09:53,720 --> 01:09:57,120
Speaker 2: of living issue. Okay, so inflation's fallen, but the cost

1456
01:09:57,160 --> 01:09:59,520
Speaker 2: of living issue is now on mortgage.

1457
01:10:00,360 --> 01:10:01,840
Speaker 1: The cost of living hasn't gone down there.

1458
01:10:01,840 --> 01:10:04,080
Speaker 2: That han't gone out, it's just that's stopped getting worse.

1459
01:10:04,680 --> 01:10:05,240
Speaker 1: Whatever it is.

1460
01:10:05,400 --> 01:10:06,320
Speaker 3: It's so expensive.

1461
01:10:07,040 --> 01:10:10,800
Speaker 2: Well yes, yes, yeah, but that's so it's predicated. So

1462
01:10:10,840 --> 01:10:12,599
Speaker 2: when the RBA cut rates, and we saw it in

1463
01:10:12,640 --> 01:10:15,920
Speaker 2: the February rate cut, so we had one rate cut,

1464
01:10:16,040 --> 01:10:18,040
Speaker 2: consumers centerment Bush went straight up.

1465
01:10:18,080 --> 01:10:18,280
Speaker 1: You know.

1466
01:10:18,400 --> 01:10:21,040
Speaker 2: So consumers again, as I said before, we're not stupid.

1467
01:10:21,439 --> 01:10:23,680
Speaker 2: Consumers are aware of what's going on. So if we

1468
01:10:23,720 --> 01:10:26,160
Speaker 2: get a cut in May, then say one in July,

1469
01:10:26,360 --> 01:10:28,960
Speaker 2: then maybe one in September. Just just assuming we get

1470
01:10:29,000 --> 01:10:31,320
Speaker 2: three cuts, I reckon. By the end of this year,

1471
01:10:31,920 --> 01:10:34,240
Speaker 2: not only will be there the proverbial side of relief,

1472
01:10:34,240 --> 01:10:35,920
Speaker 2: there'll actually be a cash flow relief.

1473
01:10:35,960 --> 01:10:36,200
Speaker 1: You know.

1474
01:10:36,360 --> 01:10:39,080
Speaker 2: The first twenty five points, Oh, it's handy, but it

1475
01:10:39,120 --> 01:10:41,840
Speaker 2: doesn't change my life. Second one, that's a bit better.

1476
01:10:42,160 --> 01:10:44,880
Speaker 2: By the time you get three or four cuts into

1477
01:10:44,920 --> 01:10:47,920
Speaker 2: your repayment schedule, and Okay, a lot of people probably

1478
01:10:47,960 --> 01:10:49,880
Speaker 2: keep their repayments high, but they're not going to have

1479
01:10:49,920 --> 01:10:52,320
Speaker 2: to increase them. And some of the might say, I've

1480
01:10:52,320 --> 01:10:54,120
Speaker 2: had such a crap couple of years, I'm going to

1481
01:10:54,120 --> 01:10:56,519
Speaker 2: reduce my repayments and take that extra money out of

1482
01:10:56,520 --> 01:11:00,479
Speaker 2: my monthly repayments. So you get this whole scenari where

1483
01:11:00,600 --> 01:11:03,519
Speaker 2: that's predicated on that. The other thing that I think

1484
01:11:03,600 --> 01:11:06,360
Speaker 2: is important about the economic outlook is that I think

1485
01:11:06,400 --> 01:11:09,400
Speaker 2: inflation is under control. I think that that was I

1486
01:11:09,439 --> 01:11:11,320
Speaker 2: won't say an old story because it's still very recent,

1487
01:11:11,360 --> 01:11:13,000
Speaker 2: but I think that we have moved to a period

1488
01:11:13,000 --> 01:11:14,919
Speaker 2: where we are going to be seeing that as inflation

1489
01:11:15,360 --> 01:11:19,280
Speaker 2: trimmed mean and headline two points something, So the RBA

1490
01:11:19,360 --> 01:11:21,759
Speaker 2: will be thinking, thank goodness, we've got two points something

1491
01:11:21,920 --> 01:11:25,360
Speaker 2: on the inflation rate. That means that we can afford

1492
01:11:25,400 --> 01:11:28,000
Speaker 2: to trim rates that you know, we certainly don't have

1493
01:11:28,080 --> 01:11:30,160
Speaker 2: to hike them. We're keeping an eagle eye on what's

1494
01:11:30,160 --> 01:11:32,800
Speaker 2: happening in geopolitics and around the world and China and

1495
01:11:32,840 --> 01:11:34,880
Speaker 2: the US and all the rest of it, and so

1496
01:11:34,920 --> 01:11:36,919
Speaker 2: they don't want to hike rates into that sort of scenario,

1497
01:11:37,120 --> 01:11:40,680
Speaker 2: of course, And that with the election out of the

1498
01:11:40,680 --> 01:11:44,880
Speaker 2: way and a majority guvernment, I think, so whoever one,

1499
01:11:45,040 --> 01:11:48,400
Speaker 2: I'm glad we don't have independence and Greens holding the

1500
01:11:48,400 --> 01:11:51,760
Speaker 2: balance of power. So I think everybody agrees. Most people

1501
01:11:51,800 --> 01:11:52,320
Speaker 2: agree with that.

1502
01:11:52,400 --> 01:11:54,880
Speaker 1: Even John Howard agree with that. Yeah, the Libs here.

1503
01:11:54,880 --> 01:11:57,880
Speaker 2: So we don't want I prefer a label when the minority,

1504
01:11:57,880 --> 01:12:01,680
Speaker 2: because the minority blocks everything in the bloody Parliament. So

1505
01:12:01,760 --> 01:12:02,519
Speaker 2: that's so.

1506
01:12:03,040 --> 01:12:05,360
Speaker 3: And I think so politically we're stable.

1507
01:12:05,479 --> 01:12:09,120
Speaker 2: We're stable. That's the critical thing. And I think to

1508
01:12:09,160 --> 01:12:13,120
Speaker 2: give Jim Charmers a bit of a tick. He is

1509
01:12:13,240 --> 01:12:17,240
Speaker 2: thinking about productivity, he is thinking about the right things. Now,

1510
01:12:17,479 --> 01:12:19,519
Speaker 2: the proof will be in the pudding. The election's only

1511
01:12:19,520 --> 01:12:21,600
Speaker 2: what four days ago, so let's let's give him a

1512
01:12:21,600 --> 01:12:26,280
Speaker 2: moment to find find out what's happening. But if he's

1513
01:12:26,280 --> 01:12:29,040
Speaker 2: true to his word, and they do implement a series

1514
01:12:29,080 --> 01:12:34,679
Speaker 2: of these sorts of reforms on infrastructure, spending on skills

1515
01:12:34,720 --> 01:12:36,559
Speaker 2: and training so that we don't have a skill shortage

1516
01:12:36,560 --> 01:12:39,320
Speaker 2: in Australia. If he looks at some tax reform and

1517
01:12:39,360 --> 01:12:41,479
Speaker 2: I know that's a thorny issue and it takes ages

1518
01:12:41,520 --> 01:12:43,840
Speaker 2: to implement, and you know they're a vested interest in

1519
01:12:43,880 --> 01:12:47,840
Speaker 2: any tax reform debate. But you know, again, it's amazing

1520
01:12:47,880 --> 01:12:49,759
Speaker 2: how much tax reform you can achieve over a beer.

1521
01:12:49,920 --> 01:12:52,559
Speaker 2: You know, we had a good discussion last night. We

1522
01:12:52,760 --> 01:12:55,200
Speaker 2: reformed the Texas to wherever I can't see in the crowd,

1523
01:12:55,200 --> 01:12:57,840
Speaker 2: but there if you us had a good conversation, you know.

1524
01:12:57,920 --> 01:13:00,519
Speaker 2: So I'm hoping they've sworn off the grog that apartment.

1525
01:13:00,600 --> 01:13:02,160
Speaker 2: So if they around their cup of tea, if they

1526
01:13:02,200 --> 01:13:04,840
Speaker 2: can have a conversation about what tax reform, bring it

1527
01:13:04,880 --> 01:13:08,800
Speaker 2: to the people, explain this is why we're doing this

1528
01:13:08,880 --> 01:13:11,360
Speaker 2: and this and this with the tax system, to improve

1529
01:13:11,400 --> 01:13:13,400
Speaker 2: the efficiency of the tax system. Now, there might be

1530
01:13:13,400 --> 01:13:15,920
Speaker 2: a few people who lose out, sorry, that's the nature

1531
01:13:15,960 --> 01:13:20,200
Speaker 2: of tax reform. Few people will benefit. But for the economy,

1532
01:13:21,400 --> 01:13:25,000
Speaker 2: if they can deliver that, the RBA trims interest rates.

1533
01:13:25,439 --> 01:13:28,160
Speaker 2: The geopolitics doesn't get uglier than it currently is. If

1534
01:13:28,160 --> 01:13:30,800
Speaker 2: we sort of somehow find that that conflict in India

1535
01:13:30,800 --> 01:13:34,439
Speaker 2: and Pakistan's just to skirmish and no more touchwood and

1536
01:13:34,600 --> 01:13:37,439
Speaker 2: Trump backtracks and Chinese backtrack and you know, whatever goes

1537
01:13:37,479 --> 01:13:41,640
Speaker 2: on there, there's a hint of optimism coming through. And

1538
01:13:41,680 --> 01:13:43,840
Speaker 2: we consumers, you know, we consumers, we've had it tough

1539
01:13:43,880 --> 01:13:46,040
Speaker 2: for so long that you know, we sat drink the

1540
01:13:46,040 --> 01:13:48,080
Speaker 2: COVID pandemic, as says, we've got let out wash up

1541
01:13:48,080 --> 01:13:50,479
Speaker 2: with the economy. So now we've got this interest rate

1542
01:13:50,520 --> 01:13:52,280
Speaker 2: pressure and all these other things. If we do get

1543
01:13:52,280 --> 01:13:55,240
Speaker 2: a bit of relief on cost of living and those

1544
01:13:55,320 --> 01:13:57,559
Speaker 2: rate cuts coming through, yeah, I'm not saying we're going

1545
01:13:57,600 --> 01:14:00,680
Speaker 2: to have a you know, almighty boom in the but

1546
01:14:00,800 --> 01:14:04,400
Speaker 2: we should do okay. And in that too, housing cycle

1547
01:14:04,479 --> 01:14:05,599
Speaker 2: is going to be okay as well.

1548
01:14:06,160 --> 01:14:08,559
Speaker 3: So thanks Steve, and I just one final thing all

1549
01:14:08,600 --> 01:14:10,439
Speaker 3: you gos is a commercial conference, by the way, and

1550
01:14:10,920 --> 01:14:11,760
Speaker 3: just remember one thing.

1551
01:14:12,439 --> 01:14:14,320
Speaker 1: If the Labor Party is going to push.

1552
01:14:14,160 --> 01:14:20,559
Speaker 3: Their environmental policy like big time evs and all those

1553
01:14:20,560 --> 01:14:22,760
Speaker 3: sorts of things, So you know, anybody who we've got

1554
01:14:22,800 --> 01:14:25,640
Speaker 3: our funders here today, anybody who is funding evs and

1555
01:14:25,880 --> 01:14:29,120
Speaker 3: when it comes to anything that's electric, this is the

1556
01:14:29,160 --> 01:14:30,760
Speaker 3: sort of stuff you've got to start thinking about in

1557
01:14:30,880 --> 01:14:33,760
Speaker 3: terms of diversification of your business. You've got to be

1558
01:14:33,760 --> 01:14:37,559
Speaker 3: doing more commercial anything to do with this stuff. So

1559
01:14:37,600 --> 01:14:41,759
Speaker 3: anything that where there is funding available through our funding

1560
01:14:41,800 --> 01:14:45,680
Speaker 3: partners that are here, lending partners, that's the stuff that

1561
01:14:45,680 --> 01:14:47,719
Speaker 3: you've got to start a concentrator on. And my gut

1562
01:14:47,760 --> 01:14:52,200
Speaker 3: feeling is I read a report today from live wire

1563
01:14:52,640 --> 01:14:55,400
Speaker 3: oh and live wire documents is not a bad place

1564
01:14:55,439 --> 01:14:57,840
Speaker 3: to go. Live by dot com dot I think it

1565
01:14:57,880 --> 01:15:01,360
Speaker 3: is dot you, but it's lav w i E. They

1566
01:15:01,360 --> 01:15:03,880
Speaker 3: have a lot of economisce people. They're talking about, you know,

1567
01:15:03,920 --> 01:15:05,960
Speaker 3: their talk today. I look at it every day, but

1568
01:15:06,000 --> 01:15:10,320
Speaker 3: they talk today about where where are the opportunities And

1569
01:15:10,360 --> 01:15:14,360
Speaker 3: they actually said someone like Pepper, and you know obviously

1570
01:15:14,880 --> 01:15:18,120
Speaker 3: Pepper in commercial and talking about but they're talking about

1571
01:15:18,240 --> 01:15:20,280
Speaker 3: you know people who and of course you know all

1572
01:15:20,320 --> 01:15:22,880
Speaker 3: of you, all of the lending partners here fund cars.

1573
01:15:23,240 --> 01:15:24,720
Speaker 1: You know, Platform does a lot of it.

1574
01:15:24,760 --> 01:15:28,040
Speaker 3: They're all the banks everybody. But they're sort of giving

1575
01:15:28,160 --> 01:15:30,559
Speaker 3: ratings to these sorts of organizations. But in day, these

1576
01:15:31,040 --> 01:15:33,000
Speaker 3: organizations that do well with brokers do well, and there's

1577
01:15:33,000 --> 01:15:36,280
Speaker 3: brokers that find the client. So start to diversify your business.

1578
01:15:36,439 --> 01:15:38,880
Speaker 3: Start to think to yourself, Okay, maybe i'm happy. I'm

1579
01:15:38,880 --> 01:15:42,800
Speaker 3: happy with our compan it's irrelevant. You just have to

1580
01:15:43,080 --> 01:15:45,800
Speaker 3: you know, Steven's given us a great summary of the

1581
01:15:45,840 --> 01:15:48,320
Speaker 3: economy today. Fiction as it is, but it doesn't matter.

1582
01:15:48,320 --> 01:15:49,160
Speaker 1: It's what we've got to live with.

1583
01:15:50,040 --> 01:15:53,120
Speaker 3: And and labor liberal that's all fictional too, by the way,

1584
01:15:53,160 --> 01:15:57,160
Speaker 3: so that's equally bullshit. But nonetheless that's what we've got.

1585
01:15:57,160 --> 01:15:59,200
Speaker 3: We've got governments and governments. We have to have governments

1586
01:15:59,200 --> 01:16:02,200
Speaker 3: because otherwise if we have anarchy, government's here to govern

1587
01:16:02,320 --> 01:16:05,320
Speaker 3: and they won by mandate, so and we are stable.

1588
01:16:06,200 --> 01:16:08,800
Speaker 3: So you got to look where your opportunities are and

1589
01:16:09,520 --> 01:16:12,120
Speaker 3: just look at what their policies are and say how

1590
01:16:12,160 --> 01:16:14,839
Speaker 3: can I make money out of that? And commercial conferences

1591
01:16:14,920 --> 01:16:16,800
Speaker 3: is a great example of that, and that's what our

1592
01:16:16,880 --> 01:16:18,920
Speaker 3: lenders will be doing. They'd all be sitting in there,

1593
01:16:19,080 --> 01:16:21,519
Speaker 3: you know, they'd have all their PhD sitting there trying

1594
01:16:21,520 --> 01:16:24,559
Speaker 3: to work out where are the opportunities. Well, this is

1595
01:16:24,640 --> 01:16:27,680
Speaker 3: you know, your PhD opportunity here today you're listening to

1596
01:16:27,760 --> 01:16:31,519
Speaker 3: people and we need to you know, we need to

1597
01:16:31,560 --> 01:16:33,959
Speaker 3: take advantage. You need to take advantage of those situations,

1598
01:16:34,000 --> 01:16:35,320
Speaker 3: as we do. But you need to take advantage of

1599
01:16:35,320 --> 01:16:36,559
Speaker 3: those situation. Think it through.

1600
01:16:37,280 --> 01:16:39,840
Speaker 1: What's going to be a big issue. I don't care

1601
01:16:39,880 --> 01:16:42,320
Speaker 1: about the politics. What's a big issue that.

1602
01:16:42,360 --> 01:16:44,720
Speaker 3: This government's going And by the way, they've probably got

1603
01:16:44,800 --> 01:16:47,599
Speaker 3: to be for six years. You know, I can't see

1604
01:16:47,760 --> 01:16:51,639
Speaker 3: liberals getting back in a hurry or anything else happens.

1605
01:16:51,680 --> 01:16:53,800
Speaker 3: So they'll be here for six years at least, So

1606
01:16:53,960 --> 01:16:56,160
Speaker 3: that's enough time to implement everything to twenty thirty two.

1607
01:16:56,640 --> 01:16:59,200
Speaker 1: That's their big date. So you know what the big

1608
01:16:59,280 --> 01:17:00,920
Speaker 1: talk calls a how.

1609
01:17:00,760 --> 01:17:03,040
Speaker 3: Do you get a piece of that? Yep, that's the deal.

1610
01:17:03,080 --> 01:17:04,600
Speaker 3: How do I get a piece of it? Knowing what

1611
01:17:04,680 --> 01:17:07,960
Speaker 3: Steven just explained to you, please put your hands together.

1612
01:17:08,240 --> 01:17:09,640
Speaker 3: Thank you Stephen, you pull this.

1613
01:17:10,600 --> 01:17:12,320
Speaker 2: Thanks Mark, cheers made