1
00:00:00,200 --> 00:00:04,760
Speaker 1: The Misery Index. We have a right to feel miserable

2
00:00:05,040 --> 00:00:08,680
Speaker 1: right now. The Committee for Economic Development of Australia has

3
00:00:08,760 --> 00:00:11,760
Speaker 1: put this together and generally checks up on where it

4
00:00:11,760 --> 00:00:14,000
Speaker 1: has been running for about fifteen or so years, maybe

5
00:00:14,000 --> 00:00:17,759
Speaker 1: even more than that. Liam Dillon, economist with CEDAR, the

6
00:00:17,800 --> 00:00:19,920
Speaker 1: Committee for Economic Development of Australia.

7
00:00:19,960 --> 00:00:22,919
Speaker 2: Liam, Good morning, morning, Matthew. Thanks having me.

8
00:00:23,079 --> 00:00:25,959
Speaker 1: This is quite a long period I understand of economic

9
00:00:26,000 --> 00:00:28,440
Speaker 1: misery we've been in for the last little while.

10
00:00:29,360 --> 00:00:32,040
Speaker 2: Yeah, that's right. So when we looked at this, what

11
00:00:32,120 --> 00:00:35,360
Speaker 2: we found was that actually, you know, most people resonate

12
00:00:35,400 --> 00:00:37,960
Speaker 2: with this, but what we're currently living through is the

13
00:00:37,960 --> 00:00:42,239
Speaker 2: most protracted period of economic misery since twenty eleven in

14
00:00:42,280 --> 00:00:45,640
Speaker 2: the way to the Great Financial Crisis, so it's quite

15
00:00:46,080 --> 00:00:46,920
Speaker 2: quite significant.

16
00:00:47,360 --> 00:00:49,159
Speaker 1: Yeah, all right, So what is that when you look

17
00:00:49,159 --> 00:00:51,440
Speaker 1: at a misery index? What goes into it? What do

18
00:00:51,479 --> 00:00:53,680
Speaker 1: you take into account? Sure?

19
00:00:53,760 --> 00:00:57,600
Speaker 2: So the misery Index is basically combining a few economic

20
00:00:57,680 --> 00:01:00,880
Speaker 2: measures that most people know and care about. So it

21
00:01:00,920 --> 00:01:04,319
Speaker 2: combines three main things, that's the rate of inflation, the

22
00:01:04,400 --> 00:01:07,639
Speaker 2: unemployment rate, and interest rates, and it gives a general

23
00:01:07,720 --> 00:01:11,200
Speaker 2: view of the economic misery that most people are experiencing

24
00:01:11,240 --> 00:01:14,280
Speaker 2: at a given point in time, and as you can imagine,

25
00:01:14,319 --> 00:01:18,720
Speaker 2: misery rises when inflation, unemployment and interest rates are high

26
00:01:18,720 --> 00:01:21,400
Speaker 2: and economic growth is a little bit slower, and that's

27
00:01:21,440 --> 00:01:25,000
Speaker 2: certainly what we've seen most recently, particularly driven by inflation.

28
00:01:26,760 --> 00:01:29,360
Speaker 1: There's I don't know that you need an index for

29
00:01:29,440 --> 00:01:34,080
Speaker 1: people to say we didn't know this. Of course we did.

30
00:01:34,120 --> 00:01:36,639
Speaker 1: We know we're economically miserable at the moment.

31
00:01:37,640 --> 00:01:40,560
Speaker 2: Yeah, that's right. I mean, it really does reflect what

32
00:01:41,120 --> 00:01:44,200
Speaker 2: people are feeling, and it just the value of the

33
00:01:44,200 --> 00:01:47,039
Speaker 2: index really is it shows where things are coming from,

34
00:01:47,160 --> 00:01:50,400
Speaker 2: where that pain is really being felt. And so what

35
00:01:50,440 --> 00:01:52,320
Speaker 2: we see when we look at the index is that

36
00:01:52,760 --> 00:01:56,919
Speaker 2: while historically maybe unemployment or high interest rates have driven

37
00:01:56,960 --> 00:02:00,200
Speaker 2: that level of misery up for people, actually most recently

38
00:02:00,280 --> 00:02:03,240
Speaker 2: it's been inflation. You know, you hear consistently about it

39
00:02:03,280 --> 00:02:05,160
Speaker 2: in the media, and that's a good reason and that's

40
00:02:05,520 --> 00:02:07,840
Speaker 2: reflected in the Misery Index. And so what we see

41
00:02:07,920 --> 00:02:11,240
Speaker 2: is it between mid twenty twenty one and mid twenty

42
00:02:11,360 --> 00:02:15,520
Speaker 2: twenty three, inflation really accounted for around fifty percent of

43
00:02:16,080 --> 00:02:19,040
Speaker 2: the misery as measured by this index, that Australian felt.

44
00:02:19,440 --> 00:02:21,360
Speaker 2: And that's why it's so important that we can't be

45
00:02:21,440 --> 00:02:25,200
Speaker 2: complacent in getting inflation back to that target range that

46
00:02:25,240 --> 00:02:27,000
Speaker 2: the Reserve Bank is looking for.

47
00:02:27,200 --> 00:02:29,519
Speaker 1: All right, do you think if rates do come down

48
00:02:29,560 --> 00:02:32,000
Speaker 1: in the next Well, it probably won't be tomorrow. I

49
00:02:32,040 --> 00:02:35,160
Speaker 1: think the bank is meeting tomorrow, and despite what happened

50
00:02:35,160 --> 00:02:37,840
Speaker 1: in the US, there's well that's about been the only change,

51
00:02:37,840 --> 00:02:39,920
Speaker 1: hasn't I think they're looking for more than that. But

52
00:02:40,000 --> 00:02:43,360
Speaker 1: when it does eventually drop, as it undoubtedly will at

53
00:02:43,360 --> 00:02:47,560
Speaker 1: some stage, will that ease off on the misery index?

54
00:02:47,600 --> 00:02:49,520
Speaker 1: Will it come down a notch? Yeah?

55
00:02:49,560 --> 00:02:53,160
Speaker 2: Absolutely, So. You know, that's two of the three pieces

56
00:02:53,160 --> 00:02:56,440
Speaker 2: of the index that people feel miserable about, and that's

57
00:02:56,520 --> 00:03:00,440
Speaker 2: high interest rates and high inflation and so trade to

58
00:03:00,480 --> 00:03:02,960
Speaker 2: the tool that the Reserve Bank uses to really try

59
00:03:02,960 --> 00:03:07,519
Speaker 2: and combat inflation, and it has been moderating since its peaks,

60
00:03:07,680 --> 00:03:10,000
Speaker 2: but it's been the pace of progress has been a

61
00:03:10,040 --> 00:03:13,000
Speaker 2: little bit slower, perhaps than we would all like, which

62
00:03:13,040 --> 00:03:14,959
Speaker 2: has meant that the Reserve Bank has had to keep

63
00:03:14,960 --> 00:03:18,959
Speaker 2: those rates elevated. But as that really sort of stubborn

64
00:03:19,000 --> 00:03:23,240
Speaker 2: and sticky last parts of inflation do start to come down,

65
00:03:23,280 --> 00:03:26,079
Speaker 2: that'll give the Reserve Bank a little bit more bandwidth

66
00:03:26,120 --> 00:03:28,960
Speaker 2: to reduce those interest rates, and with those two aspects

67
00:03:29,040 --> 00:03:32,440
Speaker 2: coming down, hopefully we'll feel a little bit less miserable

68
00:03:32,440 --> 00:03:33,639
Speaker 2: in the years ahead.

69
00:03:33,680 --> 00:03:36,000
Speaker 1: Well, misery loves company, doesn't it, so it needs all

70
00:03:36,000 --> 00:03:40,080
Speaker 1: three to work in tandem. I appreciate your time, Liam.

71
00:03:39,880 --> 00:03:42,640
Speaker 2: Thank you, Thank you very much, Matthew Liam.

72
00:03:42,440 --> 00:03:46,000
Speaker 1: Dillon, economist with the Committee for Economic Development of Australia.

73
00:03:46,000 --> 00:03:48,880
Speaker 1: The Misery Index out and shows that we are living

74
00:03:48,920 --> 00:03:54,000
Speaker 1: through the most protracted period of economic misery since twenty eleven.