1
00:00:01,280 --> 00:00:03,560
Speaker 1: My name is Lily Maddon and I'm a proud Arunda

2
00:00:03,800 --> 00:00:08,600
Speaker 1: Bungelung Caalcuttin woman from Gadighl Country. The Daily oz acknowledges

3
00:00:08,680 --> 00:00:10,880
Speaker 1: that this podcast is recorded on the lands of the

4
00:00:10,880 --> 00:00:14,440
Speaker 1: Gadighl people and pays respect to all Aboriginal and Torres

5
00:00:14,440 --> 00:00:17,360
Speaker 1: Strait Island and nations. We pay our respects to the

6
00:00:17,400 --> 00:00:20,160
Speaker 1: first peoples of these countries, both past and present.

7
00:00:25,239 --> 00:00:28,320
Speaker 2: Good morning and welcome to the Daily os. It's Thursday,

8
00:00:28,360 --> 00:00:29,800
Speaker 2: the twenty sixth of October.

9
00:00:29,840 --> 00:00:32,080
Speaker 3: I'm Emma Gillespie, I'm Tom Crowley.

10
00:00:32,240 --> 00:00:33,960
Speaker 4: Tom, thanks for joining us today.

11
00:00:34,000 --> 00:00:38,280
Speaker 2: We're talking about the latest inflation numbers which were released yesterday,

12
00:00:38,600 --> 00:00:41,599
Speaker 2: and they've shown that prices have risen by more than

13
00:00:41,640 --> 00:00:42,920
Speaker 2: the Reserve Bank had hoped.

14
00:00:43,400 --> 00:00:44,239
Speaker 4: It's increased the.

15
00:00:44,320 --> 00:00:47,400
Speaker 2: Likelihood that we could soon be hearing three words that

16
00:00:47,479 --> 00:00:49,360
Speaker 2: we haven't heard for a few.

17
00:00:49,120 --> 00:00:53,080
Speaker 4: Months, interest rate rise. Tom.

18
00:00:53,200 --> 00:00:55,680
Speaker 2: You're going to tell us all about what that means

19
00:00:55,760 --> 00:00:56,840
Speaker 2: in today's deep dive.

20
00:00:56,960 --> 00:00:58,760
Speaker 4: But first, what's making headlines.

21
00:00:59,240 --> 00:01:02,440
Speaker 3: Well, mngers who were on board the Ruby Princess during

22
00:01:02,480 --> 00:01:05,640
Speaker 3: a major COVID nineteen outbreak, remember the Ruby Princess have

23
00:01:05,720 --> 00:01:09,640
Speaker 3: won a class action lawsuit against Carnival Australia. The Ruby Princess,

24
00:01:09,680 --> 00:01:12,120
Speaker 3: of Course, was turned back to Sydney in March twenty

25
00:01:12,160 --> 00:01:15,280
Speaker 3: twenty when several passengers fell ill with COVID. The Federal

26
00:01:15,360 --> 00:01:18,200
Speaker 3: Court found the cruise company was negligent in its professional

27
00:01:18,280 --> 00:01:20,839
Speaker 3: duties to care for the thousands of passengers on board,

28
00:01:21,200 --> 00:01:24,120
Speaker 3: and that it wasn't reasonably safe for the crews to depart.

29
00:01:24,720 --> 00:01:27,080
Speaker 3: The ruling opens the door for Carnival to pay damages

30
00:01:27,120 --> 00:01:28,560
Speaker 3: to several of the passengers.

31
00:01:29,400 --> 00:01:32,800
Speaker 2: The Queensland government has launched new action to tackle vaping use.

32
00:01:33,080 --> 00:01:36,360
Speaker 2: Measures include expanding the state's Quitline service, which is a

33
00:01:36,400 --> 00:01:40,440
Speaker 2: phone service to help Queenslanders quit smoking, and stronger enforcement

34
00:01:40,520 --> 00:01:43,400
Speaker 2: of vaping laws. The reforms were announced as part of

35
00:01:43,440 --> 00:01:47,440
Speaker 2: the government's response to a parliamentary inquiry, which handed down

36
00:01:47,520 --> 00:01:52,160
Speaker 2: its report in August. The government accepted all fourteen recommendations

37
00:01:52,240 --> 00:01:52,920
Speaker 2: in the report.

38
00:01:54,040 --> 00:01:57,400
Speaker 3: The Commissioner of wa Correction Services has been stood down

39
00:01:57,520 --> 00:01:59,600
Speaker 3: less than one week after the death of a First

40
00:01:59,680 --> 00:02:02,600
Speaker 3: Nation boy held in youth detention. As part of an

41
00:02:02,600 --> 00:02:05,960
Speaker 3: overhaul to the state's Justice Department. A Deputy Commissioner position

42
00:02:06,040 --> 00:02:08,360
Speaker 3: will be created, and that role will be dedicated to

43
00:02:08,400 --> 00:02:11,360
Speaker 3: overseeing the welfare of young people in the system. The

44
00:02:11,400 --> 00:02:13,760
Speaker 3: death of the First Nation's Boy will be investigated in

45
00:02:13,800 --> 00:02:15,040
Speaker 3: a mandatory inquest.

46
00:02:16,000 --> 00:02:18,440
Speaker 2: And today's good news. It's always a good day when

47
00:02:18,440 --> 00:02:21,799
Speaker 2: we've got space news. And new research from the Universities

48
00:02:21,800 --> 00:02:24,680
Speaker 2: of Surrey and Swansea in the UK have found it

49
00:02:24,720 --> 00:02:28,760
Speaker 2: could be viable to use solar panels in space. The

50
00:02:28,840 --> 00:02:33,760
Speaker 2: results suggests that large and inexpensive solar stations so solar farms,

51
00:02:33,800 --> 00:02:37,120
Speaker 2: could be deployed in space to bring clean energy back

52
00:02:37,160 --> 00:02:40,600
Speaker 2: to Earth. The study showed the panels did not deteriorate

53
00:02:40,680 --> 00:02:44,040
Speaker 2: in space, although they did become less efficient over a

54
00:02:44,120 --> 00:02:45,360
Speaker 2: period of six years.

55
00:02:45,480 --> 00:02:48,000
Speaker 3: I guess it makes sense. The Sun is in space, that's.

56
00:02:47,840 --> 00:02:48,519
Speaker 4: Where it lives.

57
00:02:51,000 --> 00:02:55,520
Speaker 2: Tom, You're here to talk to us about your favorite subject.

58
00:02:55,200 --> 00:02:58,240
Speaker 4: Not necessarily my favorite subject, but we need to know

59
00:02:58,320 --> 00:03:02,080
Speaker 4: about it nonetheless. In five, lation and interest rates.

60
00:03:01,880 --> 00:03:04,040
Speaker 3: Yes, there's a rule on the tdapod which is that

61
00:03:04,080 --> 00:03:06,040
Speaker 3: I'm not allowed to come on and talk about inflation

62
00:03:06,080 --> 00:03:08,120
Speaker 3: and interest rates without it first being pointed out that

63
00:03:08,160 --> 00:03:10,360
Speaker 3: I'm the only person who finds some interesting. But it

64
00:03:10,440 --> 00:03:12,600
Speaker 3: has been a little while since we've had much news

65
00:03:12,639 --> 00:03:14,480
Speaker 3: at all really on the economic front. It's been four

66
00:03:14,520 --> 00:03:17,720
Speaker 3: months since the RBA last raised interest rates, and I

67
00:03:17,720 --> 00:03:19,160
Speaker 3: think that's when I was last on the pod to

68
00:03:19,200 --> 00:03:21,920
Speaker 3: talk about this. But we got some news yesterday and

69
00:03:21,960 --> 00:03:26,720
Speaker 3: it wasn't very positive. Inflation is falling, but not as

70
00:03:26,760 --> 00:03:30,040
Speaker 3: fast as we want it to, and that is prompting

71
00:03:30,040 --> 00:03:32,880
Speaker 3: speculation that the RBA, under its new governor, Michelle Bullock,

72
00:03:33,240 --> 00:03:35,480
Speaker 3: could be about to give us some unwelcome news. So

73
00:03:35,480 --> 00:03:36,720
Speaker 3: there's a bit to unpack there.

74
00:03:36,840 --> 00:03:37,440
Speaker 4: That sure is.

75
00:03:37,480 --> 00:03:40,120
Speaker 2: And I must admit my heart did drop a little

76
00:03:40,160 --> 00:03:42,480
Speaker 2: bit when you reported yesterday that we could be finding

77
00:03:42,520 --> 00:03:46,160
Speaker 2: ourselves talking about rate rises again. I think a lot

78
00:03:46,240 --> 00:03:48,960
Speaker 2: of people thought we might have left that in the past,

79
00:03:49,000 --> 00:03:52,720
Speaker 2: and I'd just forgotten about interest rates completely after multiple

80
00:03:53,280 --> 00:03:55,760
Speaker 2: rate rises back to back to back to back, and

81
00:03:55,840 --> 00:03:57,360
Speaker 2: I was kind of happy to keep it that way.

82
00:03:57,440 --> 00:04:01,360
Speaker 2: But let's start with yesterday's news. What happened, What have

83
00:04:01,400 --> 00:04:02,840
Speaker 2: they told us, and what does it mean?

84
00:04:03,200 --> 00:04:07,360
Speaker 3: So what we got yesterday was the latest inflation numbers

85
00:04:07,480 --> 00:04:09,640
Speaker 3: for the last quarter, so the last three months we're

86
00:04:09,640 --> 00:04:16,279
Speaker 3: talking July, August, September. So inflation tracks how prices are changing.

87
00:04:16,320 --> 00:04:19,039
Speaker 3: This is information on what's happened to prices in the

88
00:04:19,040 --> 00:04:21,960
Speaker 3: Australian economy in the last three months. And of course

89
00:04:21,960 --> 00:04:24,159
Speaker 3: we've been watching these numbers very closely for really the

90
00:04:24,160 --> 00:04:27,080
Speaker 3: best part of two years, because prices have been going

91
00:04:27,160 --> 00:04:29,760
Speaker 3: up by far too much for anyone's liking. It's a

92
00:04:29,800 --> 00:04:32,240
Speaker 3: story that we've spoken about many times and that I'm

93
00:04:32,240 --> 00:04:35,359
Speaker 3: sure people have experienced at the grocery store paying their rent.

94
00:04:35,360 --> 00:04:37,359
Speaker 3: It's something that we're pretty familiar with the cost of

95
00:04:37,400 --> 00:04:40,599
Speaker 3: living crisis that we've been living through. Now the story

96
00:04:40,640 --> 00:04:44,880
Speaker 3: over the last few months has been getting better. Inflation

97
00:04:45,040 --> 00:04:47,719
Speaker 3: has been moderating. It's still going up. Prices are still

98
00:04:47,760 --> 00:04:49,440
Speaker 3: going up, but they're not going up by quite as

99
00:04:49,520 --> 00:04:52,279
Speaker 3: much as they used to. That's been the good news story.

100
00:04:52,400 --> 00:04:54,520
Speaker 4: So did that pattern continue yesterday?

101
00:04:54,720 --> 00:04:57,360
Speaker 3: Well sort of. So I'll start with the numbers. The

102
00:04:57,400 --> 00:05:00,560
Speaker 3: big inflation number that we focus on is the annual number.

103
00:05:00,839 --> 00:05:03,839
Speaker 3: What are prices today compared to a year ago, And

104
00:05:03,880 --> 00:05:06,440
Speaker 3: the number that we learned about yesterday was five point

105
00:05:06,480 --> 00:05:09,920
Speaker 3: four Prices across the board in Australia five point four

106
00:05:09,960 --> 00:05:13,880
Speaker 3: percent higher than a year ago. Now that's quite a

107
00:05:13,880 --> 00:05:16,040
Speaker 3: bit higher. It's not as bad as where we were,

108
00:05:16,120 --> 00:05:17,920
Speaker 3: as I say, so we got up as high as

109
00:05:17,920 --> 00:05:19,960
Speaker 3: sort of eight nine percent was where that number was

110
00:05:20,000 --> 00:05:22,039
Speaker 3: at a few months ago, So five point four is

111
00:05:22,080 --> 00:05:24,400
Speaker 3: not bad, but it's still quite a bit higher than

112
00:05:24,400 --> 00:05:26,880
Speaker 3: where the RBA would like it to go. Two to

113
00:05:26,960 --> 00:05:30,440
Speaker 3: three percent inflation is the range that the RBA is

114
00:05:30,480 --> 00:05:32,960
Speaker 3: comfortable with as a sort of a safe and stable

115
00:05:33,040 --> 00:05:35,080
Speaker 3: range that doesn't put too much pressure on the cost

116
00:05:35,080 --> 00:05:38,400
Speaker 3: of living. That's what they're aiming for. So five point

117
00:05:38,400 --> 00:05:40,919
Speaker 3: four we're heading in the right direction, but we're not

118
00:05:41,000 --> 00:05:45,200
Speaker 3: quite there. So the IBA has increased interest rates, probably

119
00:05:45,240 --> 00:05:47,920
Speaker 3: about it a dozen times in the last year and

120
00:05:47,960 --> 00:05:50,239
Speaker 3: a half, since May twenty twenty two when it began

121
00:05:50,320 --> 00:05:52,400
Speaker 3: to do that, and the reason that it does that

122
00:05:53,360 --> 00:05:57,320
Speaker 3: is to discourage people from borrowing and spending money. The

123
00:05:57,440 --> 00:06:00,359
Speaker 3: idea being that fewer people spending money take some of

124
00:06:00,400 --> 00:06:03,080
Speaker 3: that pressure off prices. That's the way that the RBA

125
00:06:03,320 --> 00:06:06,520
Speaker 3: seeks to get inflation back down to that level. And

126
00:06:06,560 --> 00:06:09,920
Speaker 3: so this five point four number is not quite where

127
00:06:09,960 --> 00:06:12,120
Speaker 3: the RBA wants it to be. And beneath that five

128
00:06:12,200 --> 00:06:15,560
Speaker 3: point four there are some particular areas where prices have

129
00:06:15,640 --> 00:06:18,359
Speaker 3: been rising faster. So in the last few months we

130
00:06:18,400 --> 00:06:22,600
Speaker 3: saw particularly large spikes for petrol, for rent, and more

131
00:06:22,640 --> 00:06:26,159
Speaker 3: broadly for housing costs, power bills, all of these things

132
00:06:26,240 --> 00:06:29,200
Speaker 3: prices that have been rising in those categories for quite

133
00:06:29,200 --> 00:06:29,680
Speaker 3: some time.

134
00:06:29,880 --> 00:06:31,839
Speaker 2: So can you take us back a bit of a

135
00:06:31,880 --> 00:06:35,200
Speaker 2: step here, because you've talked briefly about how the RBA

136
00:06:35,440 --> 00:06:40,280
Speaker 2: raises rates to fight inflation, But how exactly you know

137
00:06:40,320 --> 00:06:44,760
Speaker 2: when we're talking about high petrol prices or surging rent prices,

138
00:06:45,600 --> 00:06:48,480
Speaker 2: what's the point of raising interest rates?

139
00:06:48,760 --> 00:06:50,599
Speaker 3: It's a really good question, and it's always good to

140
00:06:50,640 --> 00:06:54,039
Speaker 3: go back to this step because I think sometimes there's

141
00:06:54,080 --> 00:06:56,760
Speaker 3: this automatic way that we talk about at all. Inflation's up,

142
00:06:56,800 --> 00:06:58,760
Speaker 3: and so the RBA is going to raise interest rates

143
00:06:58,800 --> 00:07:01,039
Speaker 3: like it's just this automatic and we don't take that

144
00:07:01,080 --> 00:07:03,120
Speaker 3: step back to ask why. So it's a good question,

145
00:07:03,160 --> 00:07:06,400
Speaker 3: and I think it's especially confusing for people when we're

146
00:07:06,440 --> 00:07:09,679
Speaker 3: talking about things like petrol and rent, like why does

147
00:07:09,840 --> 00:07:15,000
Speaker 3: the RBA making borrowing more expensive do anything to help

148
00:07:15,280 --> 00:07:17,160
Speaker 3: the cost of petrol or the cost.

149
00:07:16,960 --> 00:07:17,480
Speaker 4: Of my rent?

150
00:07:18,160 --> 00:07:21,480
Speaker 3: And the answer is it doesn't. But the RBA is playing,

151
00:07:22,840 --> 00:07:27,480
Speaker 3: I guess, a psychological game with people about expectations. That's

152
00:07:27,760 --> 00:07:29,920
Speaker 3: slightly confusing. But let me unpack that a little bit.

153
00:07:30,560 --> 00:07:34,000
Speaker 3: What the RBA is really worried about happening at this

154
00:07:34,160 --> 00:07:37,520
Speaker 3: point in time is that the public gets used to

155
00:07:38,000 --> 00:07:41,200
Speaker 3: rising prices being a part of life. So from the

156
00:07:41,240 --> 00:07:43,320
Speaker 3: RBA's perspective at the moment, it doesn't really matter whether

157
00:07:43,360 --> 00:07:45,560
Speaker 3: it's petrol, whether it's rent, whatever it is. What the

158
00:07:45,640 --> 00:07:48,360
Speaker 3: RBA is worried about is this overall number, this five

159
00:07:48,400 --> 00:07:51,720
Speaker 3: point four, whatever the number is, that number getting kind

160
00:07:51,760 --> 00:07:54,600
Speaker 3: of set into the bones of the Australian economy and

161
00:07:54,680 --> 00:07:56,480
Speaker 3: into the minds of all of us.

162
00:07:56,560 --> 00:07:56,720
Speaker 1: Here.

163
00:07:57,280 --> 00:07:59,480
Speaker 3: The reason that they're worried about that is that if

164
00:07:59,520 --> 00:08:03,320
Speaker 3: people it expect price rises to become the norm, that

165
00:08:03,400 --> 00:08:06,200
Speaker 3: can be a bit of a self fulfilling prophecy. So

166
00:08:06,240 --> 00:08:07,960
Speaker 3: if you think about if you're wanting to make a

167
00:08:08,000 --> 00:08:10,560
Speaker 3: major purchase, say you want to buy a household appliance

168
00:08:10,600 --> 00:08:15,160
Speaker 3: that's fairly big financial outlay, and you think that price

169
00:08:15,280 --> 00:08:17,160
Speaker 3: rises are a part of life, prices are going to

170
00:08:17,240 --> 00:08:19,400
Speaker 3: keep going up and up and up, You're going to

171
00:08:19,440 --> 00:08:21,680
Speaker 3: be much more likely if you can, to want to

172
00:08:21,720 --> 00:08:24,720
Speaker 3: buy that today rather than tomorrow. That's the kind of

173
00:08:25,400 --> 00:08:29,040
Speaker 3: self perpetuating logic that the RBA is really worried about,

174
00:08:29,400 --> 00:08:32,439
Speaker 3: and that's why the RBA, when it gets bad news

175
00:08:32,480 --> 00:08:35,400
Speaker 3: on inflation like this, wants to use a lot of

176
00:08:35,440 --> 00:08:38,280
Speaker 3: tough language and wants to use its actions with interest

177
00:08:38,320 --> 00:08:41,800
Speaker 3: rates to signal to people we take this seriously. We

178
00:08:41,840 --> 00:08:43,840
Speaker 3: want to get rid of this inflation. We are going

179
00:08:43,880 --> 00:08:46,120
Speaker 3: to get back to two to three percent. And you

180
00:08:46,240 --> 00:08:50,480
Speaker 3: heard even before yesterday's numbers, the RBA governor Michelle Bullick.

181
00:08:51,040 --> 00:08:53,440
Speaker 3: I guess playing that psychological game. She's a new governor.

182
00:08:53,480 --> 00:08:55,640
Speaker 3: We don't know her very well. She gave a lot

183
00:08:55,679 --> 00:08:57,800
Speaker 3: of speeches over the course of the last week or

184
00:08:57,800 --> 00:09:00,680
Speaker 3: so saying we will not hesitate if these numbers are

185
00:09:00,679 --> 00:09:03,360
Speaker 3: not where we want them to be. Rest assured, we

186
00:09:03,400 --> 00:09:04,800
Speaker 3: will do what we need to do when it comes

187
00:09:04,800 --> 00:09:07,160
Speaker 3: to interestrates to get the numbers back. That's the kind

188
00:09:07,200 --> 00:09:09,480
Speaker 3: of game the RBA is trying to play here to

189
00:09:09,559 --> 00:09:14,040
Speaker 3: break that cycle of expectations. And that's really the way

190
00:09:14,120 --> 00:09:16,120
Speaker 3: that the RBA sees that it can get us on

191
00:09:16,160 --> 00:09:17,920
Speaker 3: this path back to two to three percent.

192
00:09:18,120 --> 00:09:21,360
Speaker 2: Before we get a little bit deeper into what that

193
00:09:21,480 --> 00:09:24,360
Speaker 2: might mean for households, I do want to ask you

194
00:09:24,400 --> 00:09:26,960
Speaker 2: about the RBA's new governor, Michelle Bullock.

195
00:09:27,080 --> 00:09:29,240
Speaker 4: We've not known her for very long.

196
00:09:29,320 --> 00:09:32,400
Speaker 2: Philip Lowe of course, was around for the years prior,

197
00:09:32,840 --> 00:09:35,079
Speaker 2: made headlines in a way that we haven't really seen

198
00:09:35,120 --> 00:09:38,640
Speaker 2: an RBA governor make headlines before. How do you think

199
00:09:38,720 --> 00:09:42,080
Speaker 2: this will shift attitudes towards Michelle Bullock?

200
00:09:42,120 --> 00:09:43,160
Speaker 4: What does this look like for her?

201
00:09:43,880 --> 00:09:45,920
Speaker 3: It's part of a job. That's what you sign up

202
00:09:45,920 --> 00:09:48,360
Speaker 3: for as the RBA governor. I don't think that either

203
00:09:48,440 --> 00:09:50,840
Speaker 3: Phil Low or Michelle Bullock will be too worried about

204
00:09:50,960 --> 00:09:54,640
Speaker 3: whether they're popular. That that's I guess not so much

205
00:09:54,679 --> 00:09:56,600
Speaker 3: part of their job. So I think Michelle Bullock certainly

206
00:09:56,679 --> 00:10:00,120
Speaker 3: setting the scene and setting everyone's expectations. That are, even

207
00:10:00,160 --> 00:10:02,400
Speaker 3: though there's been a change of governor, we shouldn't expect

208
00:10:02,400 --> 00:10:03,439
Speaker 3: a change in approach.

209
00:10:04,080 --> 00:10:08,360
Speaker 2: So higher interest rates can cause pain for households, you know,

210
00:10:08,440 --> 00:10:12,560
Speaker 2: immediately I think of mortgage repayments when interest rates shift,

211
00:10:12,679 --> 00:10:17,199
Speaker 2: and interest rate changes have this downward effect on the economy. So, Tom,

212
00:10:17,320 --> 00:10:20,200
Speaker 2: what do we expect the fallout of a rate rise

213
00:10:20,559 --> 00:10:21,280
Speaker 2: to look like?

214
00:10:21,920 --> 00:10:24,120
Speaker 3: Yeah, so this is the other side of the coin, right,

215
00:10:24,200 --> 00:10:28,320
Speaker 3: So we all know why the RBA wants to fight inflation.

216
00:10:28,520 --> 00:10:30,719
Speaker 3: As I said at the beginning, we have all experienced

217
00:10:30,760 --> 00:10:33,199
Speaker 3: this cost of living crisis. We know very well, what

218
00:10:33,240 --> 00:10:36,040
Speaker 3: inflation can do to our wallets if it stays too high.

219
00:10:36,080 --> 00:10:39,520
Speaker 3: So we understand that part of it. But the consequence

220
00:10:39,960 --> 00:10:44,040
Speaker 3: of raising interest rates is less spending. That's bad for

221
00:10:44,080 --> 00:10:46,959
Speaker 3: the economy, that's bad for businesses, that's bad for the

222
00:10:47,040 --> 00:10:49,959
Speaker 3: jobs of people who work for businesses. It's obviously, as

223
00:10:49,960 --> 00:10:52,200
Speaker 3: you say, painful for people with mortgages as well, but

224
00:10:52,240 --> 00:10:55,480
Speaker 3: it has that broader effect. The whole point of interest

225
00:10:55,559 --> 00:10:59,000
Speaker 3: rates is to dampen the economy, and that can help

226
00:10:59,040 --> 00:11:01,400
Speaker 3: you achieve what you want to achieve on the inflation front.

227
00:11:01,800 --> 00:11:04,560
Speaker 3: But the trade off the RBA has to navigate all

228
00:11:04,559 --> 00:11:07,680
Speaker 3: the time is between trying to fight that inflation but

229
00:11:07,840 --> 00:11:11,079
Speaker 3: also not wanting to hurt the economy too much. But

230
00:11:11,120 --> 00:11:14,000
Speaker 3: the RBA has always said that's a really narrow path.

231
00:11:14,640 --> 00:11:17,520
Speaker 3: And when we have these moments like we had yesterday,

232
00:11:17,880 --> 00:11:20,480
Speaker 3: where inflation is not on this path that we want

233
00:11:20,520 --> 00:11:22,120
Speaker 3: it to be, and if the RBA is going to

234
00:11:22,200 --> 00:11:25,120
Speaker 3: have to move again, that's when we start getting into

235
00:11:25,120 --> 00:11:26,800
Speaker 3: this point of are we going to push the economy

236
00:11:26,800 --> 00:11:30,160
Speaker 3: too far? Are we going to cause so much damage

237
00:11:30,640 --> 00:11:33,320
Speaker 3: that we then trip into a recession? And I think

238
00:11:33,360 --> 00:11:35,680
Speaker 3: that we are at a critical tipping point on that

239
00:11:35,800 --> 00:11:39,760
Speaker 3: front now. So the good news so far there hasn't

240
00:11:39,800 --> 00:11:42,760
Speaker 3: been too much of a consequence for people's jobs. So

241
00:11:43,800 --> 00:11:48,320
Speaker 3: unemployment remains a three point six percent, which is a

242
00:11:48,520 --> 00:11:52,000
Speaker 3: historically low level, and it's stayed pretty stable for quite

243
00:11:52,040 --> 00:11:52,559
Speaker 3: some time.

244
00:11:52,600 --> 00:11:52,800
Speaker 2: Now.

245
00:11:52,840 --> 00:11:56,360
Speaker 3: That's good news, but we're watching it carefully to see

246
00:11:56,360 --> 00:11:58,280
Speaker 3: whether there are signs that it might be starting to

247
00:11:58,320 --> 00:12:00,559
Speaker 3: tick up, that people might be starting to lose their jobs,

248
00:12:00,559 --> 00:12:02,959
Speaker 3: and we are starting to see some signs of that,

249
00:12:03,480 --> 00:12:06,520
Speaker 3: particularly for young workers. So in the last few months,

250
00:12:06,800 --> 00:12:10,000
Speaker 3: the number of young people aged fifteen to twenty four

251
00:12:10,000 --> 00:12:12,880
Speaker 3: who have jobs has fallen by more than thirty thousand.

252
00:12:13,120 --> 00:12:16,719
Speaker 3: That's pretty significant. Young workers are often talked about as

253
00:12:16,800 --> 00:12:19,880
Speaker 3: the canary in the coal mine, the first to fall.

254
00:12:19,920 --> 00:12:22,720
Speaker 3: They're young, they're inexperienced, you know, they're often the first

255
00:12:23,360 --> 00:12:26,240
Speaker 3: people that a business might lay off if it's in difficulty.

256
00:12:26,400 --> 00:12:29,560
Speaker 3: So that is a bad sign obviously, very bad sign

257
00:12:29,600 --> 00:12:31,760
Speaker 3: for the young workers, but a bad sign more broadly

258
00:12:31,840 --> 00:12:34,320
Speaker 3: that these storm clouds might be starting to gather, and

259
00:12:34,440 --> 00:12:37,720
Speaker 3: so the situation is getting a little precarious, and certainly

260
00:12:37,720 --> 00:12:39,720
Speaker 3: another interest rate rise if that is what we're going

261
00:12:39,760 --> 00:12:43,000
Speaker 3: to get the next time. The RBO meets will amp

262
00:12:43,120 --> 00:12:45,880
Speaker 3: up that pressure and that squeeze on the economy.

263
00:12:46,120 --> 00:12:49,440
Speaker 2: So what is the government doing in all of this

264
00:12:49,840 --> 00:12:53,240
Speaker 2: in the midst of this cost of living pressure? What's

265
00:12:53,280 --> 00:12:56,720
Speaker 2: their role? Will they now be looking to provide additional support?

266
00:12:56,840 --> 00:13:00,319
Speaker 3: They are certainly likely to face more and more pressure

267
00:13:00,440 --> 00:13:03,160
Speaker 3: to do that. I think so far the government hasn't

268
00:13:03,160 --> 00:13:07,079
Speaker 3: indicated that it plans to do anything extra. So far,

269
00:13:07,160 --> 00:13:09,480
Speaker 3: it's been pointing to things that it's done recently. So

270
00:13:09,679 --> 00:13:13,040
Speaker 3: last budget it increased rent assistance to people who are

271
00:13:13,040 --> 00:13:17,400
Speaker 3: on welfare. It took steps to make childcare cheaper for parents.

272
00:13:17,520 --> 00:13:20,679
Speaker 3: It took some steps not to reduce power bills but

273
00:13:20,720 --> 00:13:22,640
Speaker 3: to stop them going up by quite as much as

274
00:13:22,640 --> 00:13:24,440
Speaker 3: they might have. So they point to these things and

275
00:13:24,440 --> 00:13:26,400
Speaker 3: they say these are the things that we're doing to help.

276
00:13:26,840 --> 00:13:29,520
Speaker 3: There were some questions the Treasury got yesterday about whether

277
00:13:29,600 --> 00:13:31,439
Speaker 3: he might step in to try to lower the price

278
00:13:31,440 --> 00:13:33,880
Speaker 3: of fuel. That's something the previous government did the last

279
00:13:33,880 --> 00:13:36,560
Speaker 3: time fuel prices really spiked a couple of years ago,

280
00:13:36,960 --> 00:13:38,760
Speaker 3: so there may be some more pressure to do that,

281
00:13:38,840 --> 00:13:41,400
Speaker 3: But broadly speaking, no, the government at the moment is

282
00:13:41,440 --> 00:13:44,520
Speaker 3: saying it's holding the course. But if the bad news continues,

283
00:13:44,520 --> 00:13:46,599
Speaker 3: and particularly if we find ourselves in a recession. I

284
00:13:46,600 --> 00:13:50,120
Speaker 3: think if the unemployment rate starts to climb, people start

285
00:13:50,160 --> 00:13:53,880
Speaker 3: losing their jobs, that is when the pressure will really

286
00:13:54,000 --> 00:13:57,040
Speaker 3: ramp up on the government to reconsider its position on.

287
00:13:56,960 --> 00:13:59,640
Speaker 2: This tom I feel like about this time a year ago,

288
00:13:59,679 --> 00:14:02,840
Speaker 2: there was a lot of talk of recession, this kind

289
00:14:02,880 --> 00:14:08,319
Speaker 2: of ominous forecast of what we might look like economically today.

290
00:14:08,880 --> 00:14:11,440
Speaker 4: A year on from all that sort of talk, where

291
00:14:11,480 --> 00:14:11,880
Speaker 4: are we at?

292
00:14:11,960 --> 00:14:14,680
Speaker 2: And especially if we look overseas, are there any other

293
00:14:14,760 --> 00:14:19,040
Speaker 2: examples from other developed countries that might be a little

294
00:14:19,040 --> 00:14:21,320
Speaker 2: bit ahead of us, who we can look to for

295
00:14:21,360 --> 00:14:22,400
Speaker 2: a bit of a forecast.

296
00:14:22,520 --> 00:14:24,120
Speaker 3: Yeah. I'm starting to sound a bit like the boy

297
00:14:24,160 --> 00:14:26,840
Speaker 3: who cried Wilfemmer, because I think probably for about a year,

298
00:14:26,880 --> 00:14:29,160
Speaker 3: I've been coming on and saying a recession is possible,

299
00:14:29,160 --> 00:14:32,800
Speaker 3: A recession is possible, It's still possible. These things happen

300
00:14:32,880 --> 00:14:35,360
Speaker 3: slowly and then they happen quickly. And the language that

301
00:14:35,400 --> 00:14:38,080
Speaker 3: I keep using is about storm clouds are gathering. The

302
00:14:38,120 --> 00:14:41,400
Speaker 3: storm hasn't broken yet, and we hope that it doesn't.

303
00:14:41,880 --> 00:14:44,840
Speaker 3: But we're still in this precarious position. And I think

304
00:14:44,840 --> 00:14:47,200
Speaker 3: the way that I would describe where the economy is

305
00:14:47,240 --> 00:14:51,000
Speaker 3: at at the moment is that things are going, you know,

306
00:14:51,160 --> 00:14:52,960
Speaker 3: not as bad as they could be, but we just

307
00:14:53,040 --> 00:14:55,920
Speaker 3: need one nasty knock and things could turn in a

308
00:14:55,960 --> 00:14:59,800
Speaker 3: really bad direction. And what I'm watching particularly closely is

309
00:15:00,560 --> 00:15:02,400
Speaker 3: which has its own set of problems, which could be

310
00:15:02,400 --> 00:15:04,880
Speaker 3: a whole other podcast and probably will be at some point,

311
00:15:04,960 --> 00:15:07,720
Speaker 3: But the Chinese economy, which is obviously very important to

312
00:15:07,760 --> 00:15:10,920
Speaker 3: Australia and the world from a trading perspective, is having

313
00:15:11,000 --> 00:15:13,200
Speaker 3: all sorts of problems of its own at the moment

314
00:15:13,240 --> 00:15:16,080
Speaker 3: in its housing market. If something goes really wrong in

315
00:15:16,200 --> 00:15:19,440
Speaker 3: China on the economic front, that spells big trouble for

316
00:15:19,480 --> 00:15:22,440
Speaker 3: the world economy. And that's the kind of event. If

317
00:15:22,520 --> 00:15:25,520
Speaker 3: something like that is looming on the horizon, that's the

318
00:15:25,600 --> 00:15:27,520
Speaker 3: kind of thing that might tip us into recession. So

319
00:15:27,560 --> 00:15:30,040
Speaker 3: we're sort of we've been standing on the precipice for

320
00:15:30,080 --> 00:15:34,040
Speaker 3: a while. Every month that goes past without terrible economic

321
00:15:34,080 --> 00:15:37,440
Speaker 3: news and with unemployment staying stable is great, And so

322
00:15:37,520 --> 00:15:39,400
Speaker 3: I hope that I can keep coming on and saying

323
00:15:39,480 --> 00:15:41,600
Speaker 3: the recession is still possible, but it hasn't happened yet.

324
00:15:41,600 --> 00:15:44,000
Speaker 3: But that's roughly where we are. I think we're still

325
00:15:44,040 --> 00:15:45,320
Speaker 3: watching those clouds gather up.

326
00:15:45,720 --> 00:15:48,440
Speaker 2: Well to carry on the storm cloud metaphor. Whether apps

327
00:15:48,440 --> 00:15:49,240
Speaker 2: get it wrong all the.

328
00:15:49,200 --> 00:15:50,880
Speaker 3: Time, not as often as economists.

329
00:15:51,000 --> 00:15:56,000
Speaker 2: Ah, and we like it when it's sunny. Tom, Thank

330
00:15:56,040 --> 00:15:59,320
Speaker 2: you so much for unpacking all of that for us.

331
00:15:59,320 --> 00:16:02,040
Speaker 2: You've made it makes so much more sense pleasure. And

332
00:16:02,240 --> 00:16:05,640
Speaker 2: thank you for listening to today's episode. If you learned something,

333
00:16:05,760 --> 00:16:08,440
Speaker 2: don't forget to hit subscribe wherever you listen, so there's

334
00:16:08,440 --> 00:16:11,760
Speaker 2: a TDA episode waiting for you every morning. We'll be

335
00:16:11,800 --> 00:16:14,200
Speaker 2: back again tomorrow and until then, have a great day.