1 00:00:01,280 --> 00:00:03,559 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 Calcottin woman from Gadighal 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 00:00:25,680 --> 00:00:28,720 Speaker 2: Good morning and welcome to the Daily os. Happy Friday. 8 00:00:28,840 --> 00:00:31,960 Speaker 2: It's the twenty eighth of July. I'm Zara Sidler. 9 00:00:31,680 --> 00:00:34,320 Speaker 3: And I'm Tom Crowley. Now Zara, we have a running 10 00:00:34,400 --> 00:00:36,960 Speaker 3: joke every time I come on the podcast that I'm 11 00:00:37,000 --> 00:00:40,680 Speaker 3: talking about bad news, especially when the economies concerned. We've 12 00:00:40,720 --> 00:00:42,760 Speaker 3: been talking about inflation on the rise. 13 00:00:42,960 --> 00:00:47,199 Speaker 2: Australian's financial misery is at its highest level since the 14 00:00:47,240 --> 00:00:48,879 Speaker 2: global financial crisis. 15 00:00:49,000 --> 00:00:50,640 Speaker 3: Interest rates also on the rise. 16 00:00:50,800 --> 00:00:54,440 Speaker 2: Australian interest rates have hit an eleven year high. 17 00:00:54,000 --> 00:00:57,480 Speaker 3: And a potential recession looming around the corner. Economists awarding 18 00:00:57,520 --> 00:01:01,760 Speaker 3: high interest rates could see Australia's economystically slow. But today 19 00:01:01,840 --> 00:01:04,880 Speaker 3: I have some good ish news for the economy. This 20 00:01:04,959 --> 00:01:07,840 Speaker 3: week we've had the strongest sign yet that inflation is 21 00:01:07,880 --> 00:01:11,880 Speaker 3: easy without unemployment rising. But we're not quite out of 22 00:01:11,880 --> 00:01:14,080 Speaker 3: the woods yet. I'm going to explain where we're at 23 00:01:14,200 --> 00:01:17,640 Speaker 3: in the deep dive first, though. Zara Wat's making headlines 24 00:01:17,800 --> 00:01:18,319 Speaker 3: this morning. 25 00:01:18,480 --> 00:01:21,319 Speaker 2: This is a story for all you politics nerds. The 26 00:01:21,480 --> 00:01:24,959 Speaker 2: House of Representatives will cut down by one seat at 27 00:01:24,959 --> 00:01:28,480 Speaker 2: the next election. New South Wales and Victoria will each 28 00:01:28,560 --> 00:01:31,920 Speaker 2: lose one seat, while Western Australia will gain one. The 29 00:01:31,959 --> 00:01:35,640 Speaker 2: redistribution is based on the most recent population figures. The 30 00:01:35,680 --> 00:01:38,800 Speaker 2: next election must take place by September twenty twenty five. 31 00:01:39,840 --> 00:01:42,560 Speaker 3: New South Wales Police have launched a new task force 32 00:01:42,640 --> 00:01:45,919 Speaker 3: to address recent gun violence. It will examine links between 33 00:01:45,959 --> 00:01:48,600 Speaker 3: incidents dating back to the fatal shooting at a Bondi 34 00:01:48,760 --> 00:01:51,640 Speaker 3: Junction car park last month. It comes after a man 35 00:01:51,760 --> 00:01:54,520 Speaker 3: was shot dead in a Sydney suburb on Thursday mornings. 36 00:01:55,560 --> 00:01:58,200 Speaker 2: Tim Matheson, who is the ex partner of former Prime 37 00:01:58,240 --> 00:02:01,200 Speaker 2: Minister Julia Gillard, will play lead guilty to a sexual 38 00:02:01,240 --> 00:02:05,360 Speaker 2: assault charge. Matheson faced a Melbourne court on Thursday. It 39 00:02:05,480 --> 00:02:08,440 Speaker 2: is not suggested that the charge involves or is any 40 00:02:08,440 --> 00:02:11,240 Speaker 2: way related to Gillard and the. 41 00:02:11,160 --> 00:02:15,760 Speaker 3: Good News an Australian ant produces honey with highly effective 42 00:02:15,800 --> 00:02:21,120 Speaker 3: antibacterial properties against golden staff. Researchers have found the honeypot 43 00:02:21,160 --> 00:02:25,000 Speaker 3: ant is mainly found in Western Australia and the Northern territories. 44 00:02:28,480 --> 00:02:30,880 Speaker 2: Tom. It's always a pleasure having you on the podcast, 45 00:02:31,000 --> 00:02:36,919 Speaker 2: especially when you show up under a thick, furry red blanket. 46 00:02:37,000 --> 00:02:39,720 Speaker 3: The great lengths we go to for audio quality, Zara. 47 00:02:39,880 --> 00:02:42,680 Speaker 2: If anyone is listening and wants a visual of what 48 00:02:42,760 --> 00:02:52,840 Speaker 2: I'm looking at, it is just a fun describe it. 49 00:02:52,840 --> 00:02:54,880 Speaker 3: It's nice. It's a comfortable blanket. I got it at 50 00:02:54,960 --> 00:02:58,400 Speaker 3: Costco in twenty eighteen and it's served me very well. 51 00:02:58,639 --> 00:03:00,560 Speaker 3: It was the one time I went to and I 52 00:03:00,560 --> 00:03:03,679 Speaker 3: got really distressed because there was so much stuff, and 53 00:03:03,720 --> 00:03:05,560 Speaker 3: I bought this and a killer of pretzels and that 54 00:03:05,639 --> 00:03:08,240 Speaker 3: was all. Now let's talk about the economy, shall we. 55 00:03:11,520 --> 00:03:13,320 Speaker 2: Let's do it? Why are you on the pod? What 56 00:03:13,360 --> 00:03:14,560 Speaker 2: are we talking about today? 57 00:03:14,800 --> 00:03:19,440 Speaker 3: So all right, two pieces are of significant economic news 58 00:03:19,600 --> 00:03:22,160 Speaker 3: in the last fortnight. We've got new unemployment numbers and 59 00:03:22,200 --> 00:03:25,480 Speaker 3: we got new inflation numbers. Now we have a bit 60 00:03:25,520 --> 00:03:27,840 Speaker 3: of a game in the office, or I should probably 61 00:03:27,880 --> 00:03:29,600 Speaker 3: say you have a bit of a game, which is 62 00:03:30,000 --> 00:03:32,600 Speaker 3: make Tom guess the economic numbers, and you made me 63 00:03:32,639 --> 00:03:35,720 Speaker 3: do that earlier this week, ahead of the inflation numbers. 64 00:03:35,760 --> 00:03:38,360 Speaker 3: And I think, if I remember, I predicted that there 65 00:03:38,360 --> 00:03:41,520 Speaker 3: would be goodish news, and I think in the end, 66 00:03:41,560 --> 00:03:44,920 Speaker 3: goodish is a pretty good summary of where we got to. 67 00:03:45,400 --> 00:03:48,680 Speaker 3: We can never quite use the word good unqualified when 68 00:03:48,720 --> 00:03:52,120 Speaker 3: it comes to the economy. It's never all good, and 69 00:03:52,240 --> 00:03:54,760 Speaker 3: things remain very difficult. But I think what we've got 70 00:03:54,800 --> 00:03:58,760 Speaker 3: over the last fortnight is perhaps the first signs of 71 00:03:59,360 --> 00:04:02,000 Speaker 3: some light at the end of the tunnel. So we 72 00:04:02,160 --> 00:04:06,240 Speaker 3: got two weeks ago the news that unemployment remains at 73 00:04:06,240 --> 00:04:08,760 Speaker 3: about a fifty year low, and then earlier this week 74 00:04:08,840 --> 00:04:12,200 Speaker 3: we got the news that inflation, is big concern that 75 00:04:12,240 --> 00:04:15,160 Speaker 3: we've had for about eighteen months, is starting to get 76 00:04:15,160 --> 00:04:17,960 Speaker 3: lower as well. Things are starting to ease on the 77 00:04:17,960 --> 00:04:22,279 Speaker 3: inflation front, and the combination of those things together is 78 00:04:22,920 --> 00:04:25,800 Speaker 3: really good news. Again, you know that there's a long 79 00:04:25,839 --> 00:04:28,200 Speaker 3: way to go, There are always caveats, there are always 80 00:04:28,200 --> 00:04:30,080 Speaker 3: elements of bad news, at least at the moment when 81 00:04:30,120 --> 00:04:32,600 Speaker 3: it comes to the economy. But I think, you know, 82 00:04:32,800 --> 00:04:34,800 Speaker 3: given we've been using the word crisis a lot over 83 00:04:34,800 --> 00:04:36,640 Speaker 3: the last eighteen months, I thought it was important to 84 00:04:36,640 --> 00:04:39,360 Speaker 3: come on today and balance that story out a little bit, 85 00:04:39,400 --> 00:04:42,119 Speaker 3: to highlight what is positive at the moment, why things 86 00:04:42,120 --> 00:04:44,320 Speaker 3: do seem to be going maybe a little better than 87 00:04:44,360 --> 00:04:46,640 Speaker 3: we expected them to, and give you a bit of 88 00:04:46,680 --> 00:04:48,840 Speaker 3: a sense of what that means about when we might 89 00:04:48,839 --> 00:04:50,440 Speaker 3: be out of this inflation crisis. 90 00:04:50,720 --> 00:04:53,599 Speaker 2: I like that, Tom, but I think that in order 91 00:04:53,800 --> 00:04:58,160 Speaker 2: to understand your prediction and this kind of good ish 92 00:04:58,760 --> 00:05:00,880 Speaker 2: area that we're in now, we do need to just 93 00:05:01,040 --> 00:05:03,120 Speaker 2: go over how he got to this point. 94 00:05:03,480 --> 00:05:06,359 Speaker 3: Yeah, So I guess I'll start with. You know, this 95 00:05:06,440 --> 00:05:08,920 Speaker 3: inflation problem that again we've been talking about for nearly 96 00:05:08,920 --> 00:05:12,680 Speaker 3: eighteen months. We've had high inflation, fast rising prices, and 97 00:05:12,800 --> 00:05:15,240 Speaker 3: the way that I often like to describe that is 98 00:05:15,360 --> 00:05:18,960 Speaker 3: an overheating problem. It doesn't matter how it starts. So 99 00:05:19,200 --> 00:05:22,320 Speaker 3: for example, you know, we had these global shortages overseas, 100 00:05:22,720 --> 00:05:24,880 Speaker 3: We had all sorts of things that conspired to give 101 00:05:24,960 --> 00:05:27,800 Speaker 3: us inflation. But once you get inflation, that the problem 102 00:05:27,800 --> 00:05:31,480 Speaker 3: you're dealing with is an overheating economy, too much money 103 00:05:31,520 --> 00:05:35,039 Speaker 3: bumping around, pushing up prices. Now, that is painful for 104 00:05:35,120 --> 00:05:38,240 Speaker 3: reasons that we're very familiar with. We've all experienced the 105 00:05:38,360 --> 00:05:41,400 Speaker 3: rising cost of living. But the double whammy, I guess, 106 00:05:41,520 --> 00:05:44,000 Speaker 3: is that all of the solutions that we have to 107 00:05:44,080 --> 00:05:47,760 Speaker 3: address overheating have their own risk. I guess to continue 108 00:05:47,760 --> 00:05:50,560 Speaker 3: the analogy, you know, you can't fix something that's overheated 109 00:05:50,640 --> 00:05:54,680 Speaker 3: without cooling down. So the RBA has been doing that 110 00:05:54,760 --> 00:05:58,080 Speaker 3: of course by increasing interest rates making it more expensive 111 00:05:58,080 --> 00:06:00,760 Speaker 3: to borrow. They're trying to cool down on the economy 112 00:06:00,760 --> 00:06:02,920 Speaker 3: to make us spend less. And the risk of that 113 00:06:03,680 --> 00:06:07,520 Speaker 3: is that less spending, less economic activity. That means you know, 114 00:06:07,560 --> 00:06:10,520 Speaker 3: business is going under and jobs going That's always been 115 00:06:10,560 --> 00:06:13,120 Speaker 3: the fear. That's the trade off that we've been dealing 116 00:06:13,200 --> 00:06:15,680 Speaker 3: with here between the pain of inflation on the one 117 00:06:15,720 --> 00:06:18,720 Speaker 3: hand and the pain of too much cooling on the 118 00:06:18,760 --> 00:06:21,320 Speaker 3: other hand. That's the challenge we've been waiting through over 119 00:06:21,320 --> 00:06:22,200 Speaker 3: the last year or so. 120 00:06:22,360 --> 00:06:25,479 Speaker 2: And I mean, that's the balancing act that you've come 121 00:06:25,480 --> 00:06:28,960 Speaker 2: on here and spoken about one hundred times. So what's 122 00:06:29,080 --> 00:06:30,360 Speaker 2: the news this week? Then? 123 00:06:30,600 --> 00:06:33,440 Speaker 3: Yes, So that's the recap now into this week's episode. 124 00:06:33,640 --> 00:06:35,800 Speaker 3: As I sort of said at the start, we've now 125 00:06:35,839 --> 00:06:38,240 Speaker 3: got two bits of good news that are related to 126 00:06:38,279 --> 00:06:40,880 Speaker 3: one another, and the first one is that inflation is 127 00:06:40,920 --> 00:06:46,080 Speaker 3: starting to ease, so We reached our peak for inflation 128 00:06:46,360 --> 00:06:50,520 Speaker 3: at about eight percent in December, so that's prices growing 129 00:06:50,560 --> 00:06:53,880 Speaker 3: by eight percent annually. And for context there, you know, 130 00:06:53,920 --> 00:06:57,080 Speaker 3: the RBA wants it to be around two to three percent. 131 00:06:57,160 --> 00:07:00,240 Speaker 3: That's normal. What we got this week was the news 132 00:07:00,279 --> 00:07:02,679 Speaker 3: that we're down to six. So from eight to six 133 00:07:02,880 --> 00:07:06,520 Speaker 3: on the way to three, that's decent progress. It's starting 134 00:07:06,520 --> 00:07:09,720 Speaker 3: to move in the right direction, so that story is 135 00:07:10,080 --> 00:07:12,800 Speaker 3: really positive. In the three months from March to June, 136 00:07:12,880 --> 00:07:15,840 Speaker 3: we got zero point eight percent of arise, the lowest 137 00:07:15,840 --> 00:07:20,120 Speaker 3: result since September twenty twenty one. So you know, that 138 00:07:20,240 --> 00:07:23,880 Speaker 3: is I guess, the clearest sign yet that the clouds 139 00:07:24,240 --> 00:07:28,200 Speaker 3: may be starting to part. Of course, inflation is still high. 140 00:07:28,320 --> 00:07:30,560 Speaker 3: Six percent is a lot, and when we talk about 141 00:07:30,600 --> 00:07:33,600 Speaker 3: inflation coming down, we certainly don't mean prices coming down. 142 00:07:33,640 --> 00:07:36,760 Speaker 3: It's just about prices growing a little slower. But it 143 00:07:36,880 --> 00:07:38,640 Speaker 3: is the you know, the beginning, I guess, the crest 144 00:07:38,680 --> 00:07:41,360 Speaker 3: of the wave if you like, you know, we're starting 145 00:07:41,440 --> 00:07:42,560 Speaker 3: to look like we're. 146 00:07:42,400 --> 00:07:44,160 Speaker 2: On the way down to nice analogy. 147 00:07:44,240 --> 00:07:46,239 Speaker 3: I like to get at a little bit of poetry 148 00:07:46,240 --> 00:07:47,360 Speaker 3: into the economic discussion. 149 00:07:47,760 --> 00:07:51,200 Speaker 2: So then you've spoken there about inflation, but the other 150 00:07:51,280 --> 00:07:54,440 Speaker 2: half of that that you mentioned at the top was unemployment, right. 151 00:07:54,360 --> 00:07:57,160 Speaker 3: Yeah, that's right. And this comes back to what I 152 00:07:57,200 --> 00:07:59,960 Speaker 3: set up at the beginning, which is this trade off, 153 00:08:00,040 --> 00:08:03,800 Speaker 3: this balancing act that we have. What makes all of 154 00:08:03,800 --> 00:08:07,200 Speaker 3: this really good news is that this heat is starting 155 00:08:07,240 --> 00:08:12,040 Speaker 3: to come off inflation but without too much overcoling on 156 00:08:12,200 --> 00:08:18,280 Speaker 3: the economy front, and specifically, unemployment remains at historically low levels, 157 00:08:18,320 --> 00:08:20,880 Speaker 3: so or at around three point five percent, which is 158 00:08:20,920 --> 00:08:22,640 Speaker 3: the level we've been at for the last little while, 159 00:08:23,080 --> 00:08:25,440 Speaker 3: but it's the lowest level in fifty years. So that's 160 00:08:25,760 --> 00:08:29,760 Speaker 3: more people in jobs than we've had for decades, and 161 00:08:29,840 --> 00:08:32,439 Speaker 3: that is I mean, obviously, you know, I don't have 162 00:08:32,480 --> 00:08:34,320 Speaker 3: to explain why low unemployment is a good thing, more 163 00:08:34,320 --> 00:08:38,160 Speaker 3: people in jobs, but it is again particularly good in 164 00:08:38,200 --> 00:08:41,880 Speaker 3: this context because it's happening at the same time as 165 00:08:42,000 --> 00:08:43,760 Speaker 3: we're cooling off on inflation. 166 00:08:44,120 --> 00:08:46,960 Speaker 2: Do we know how that's happened. I mean, it is 167 00:08:47,000 --> 00:08:49,040 Speaker 2: instinctively counterintuitive. 168 00:08:49,559 --> 00:08:53,160 Speaker 3: Yeah, So there are a few reasons for this good news, 169 00:08:53,240 --> 00:08:55,560 Speaker 3: this fact that we're sort of cooling down the economy 170 00:08:55,600 --> 00:08:58,240 Speaker 3: without losing too many jobs so far. I think the 171 00:08:58,240 --> 00:09:01,559 Speaker 3: first place to start is we entered this period of 172 00:09:01,640 --> 00:09:06,000 Speaker 3: high inflation in a really good spot. So again I 173 00:09:06,040 --> 00:09:09,640 Speaker 3: mentioned that three point five percent record low unemployment. That's 174 00:09:09,679 --> 00:09:12,160 Speaker 3: put us in a really really good position. We were 175 00:09:12,200 --> 00:09:15,720 Speaker 3: starting from a much higher point than we would normally be, 176 00:09:16,880 --> 00:09:18,800 Speaker 3: And it wasn't just that there were lots of people 177 00:09:18,840 --> 00:09:22,400 Speaker 3: in jobs. It was actually also that businesses were even 178 00:09:22,440 --> 00:09:24,480 Speaker 3: desperate to hire more people. I don't know if you 179 00:09:24,480 --> 00:09:26,120 Speaker 3: remembers that. I think it was just after I started 180 00:09:26,160 --> 00:09:30,040 Speaker 3: at TDA we were talking about hospitality shortage crisis, where 181 00:09:30,080 --> 00:09:32,880 Speaker 3: hospitality businesses were talking about how they just couldn't find 182 00:09:32,920 --> 00:09:36,080 Speaker 3: workers to fill all their jobs. That puts us again 183 00:09:36,120 --> 00:09:39,160 Speaker 3: in a really good position, because you know, the first 184 00:09:39,200 --> 00:09:42,319 Speaker 3: thing that can happen when you start to trim spending 185 00:09:43,200 --> 00:09:45,679 Speaker 3: is you just kind of knock off some of those 186 00:09:45,920 --> 00:09:49,440 Speaker 3: unfilled jobs. So we have seen that hiring is down 187 00:09:49,480 --> 00:09:51,480 Speaker 3: a little bit. Some of those jobs that went unfilled 188 00:09:51,480 --> 00:09:54,240 Speaker 3: for a long time. Now the businesses have said we 189 00:09:54,280 --> 00:09:57,200 Speaker 3: don't need that job anymore. We just haven't seen too 190 00:09:57,280 --> 00:09:59,360 Speaker 3: much firing yet. So I guess we had a lot 191 00:09:59,360 --> 00:10:01,880 Speaker 3: of headroom there. That's given us a really good head start. 192 00:10:02,240 --> 00:10:05,200 Speaker 3: The other reason I think things have been looking good 193 00:10:05,679 --> 00:10:09,200 Speaker 3: and this one maybe will come to the surprise of 194 00:10:09,200 --> 00:10:12,200 Speaker 3: a few people, is that the RBA has actually been 195 00:10:12,440 --> 00:10:17,600 Speaker 3: deliberately moving quite slow on inflation with the specific aim 196 00:10:18,400 --> 00:10:21,280 Speaker 3: of keeping this low unemployment. So we're actually not going 197 00:10:21,320 --> 00:10:23,920 Speaker 3: as hard against inflation as we could be. 198 00:10:24,040 --> 00:10:27,920 Speaker 2: I think that everyone who has followed our monthly updates 199 00:10:27,920 --> 00:10:31,120 Speaker 2: of interest rate rises would have a little chuckle at 200 00:10:31,160 --> 00:10:34,920 Speaker 2: you suggesting that the Reserve Bank has been moving slowly? 201 00:10:35,200 --> 00:10:35,960 Speaker 2: What do you mean by that? 202 00:10:36,240 --> 00:10:37,920 Speaker 3: Yeah, so I guess I'm being a little bit you know, 203 00:10:37,960 --> 00:10:40,600 Speaker 3: provocative there, just to keep your attentions ar But I 204 00:10:40,600 --> 00:10:42,880 Speaker 3: guess this is where you know. It's the emphasis on 205 00:10:42,920 --> 00:10:48,120 Speaker 3: the ish in goodish. So obviously the RBA has moved 206 00:10:48,160 --> 00:10:50,440 Speaker 3: pretty swiftly to raise interest rates over the last year 207 00:10:50,520 --> 00:10:52,719 Speaker 3: or so. We talked about it a lot. Obviously that's 208 00:10:52,760 --> 00:10:55,040 Speaker 3: been very painful for a lot of people, particularly people 209 00:10:55,040 --> 00:10:59,600 Speaker 3: with mortgages. You know, quite unpopular decisions in general. So 210 00:10:59,679 --> 00:11:02,640 Speaker 3: it's not as if the RBA has gone soft or 211 00:11:02,679 --> 00:11:05,920 Speaker 3: move quietly. One thing that people may not realize is 212 00:11:05,960 --> 00:11:08,560 Speaker 3: that the RBA has actually not been going as far 213 00:11:08,800 --> 00:11:11,280 Speaker 3: or as fast on interest rates as some other central 214 00:11:11,320 --> 00:11:15,000 Speaker 3: banks around the world, and that the RBA's aim is 215 00:11:15,040 --> 00:11:17,360 Speaker 3: actually to return back to a normal level of inflation 216 00:11:18,200 --> 00:11:20,880 Speaker 3: over the next two years. So the RBA is only 217 00:11:20,920 --> 00:11:22,680 Speaker 3: aiming to get back to its sort of two to 218 00:11:22,760 --> 00:11:25,600 Speaker 3: three percent desired range in mid twenty twenty five. That's 219 00:11:25,679 --> 00:11:29,040 Speaker 3: quite a long way away, and that's a deliberate choice 220 00:11:29,440 --> 00:11:33,640 Speaker 3: to preserve as low an unemployment rate as possible. So 221 00:11:33,720 --> 00:11:35,960 Speaker 3: the RBA could if it was really really worried about 222 00:11:35,960 --> 00:11:38,080 Speaker 3: getting straight back to low inflation, it could have gone 223 00:11:38,120 --> 00:11:40,240 Speaker 3: much further with interest rates, you know, in a bid 224 00:11:40,240 --> 00:11:43,280 Speaker 3: to try and get inflation down tomorrow. But instead it's 225 00:11:43,280 --> 00:11:46,120 Speaker 3: stretched at over two years. It's what the RBA is 226 00:11:46,160 --> 00:11:50,600 Speaker 3: calling a soft landing, and soft landings haven't always been 227 00:11:51,000 --> 00:11:55,040 Speaker 3: there in the past. So the last time Australia had 228 00:11:55,360 --> 00:11:58,640 Speaker 3: really high inflation in the nineteen nineties, we ended up 229 00:11:58,679 --> 00:12:01,360 Speaker 3: tipping into a really really severe year recession with an 230 00:12:01,440 --> 00:12:04,719 Speaker 3: unemployment rate of about eleven percent. So that's the kind 231 00:12:04,760 --> 00:12:06,520 Speaker 3: of thing that the RBA is trying to avoid here. 232 00:12:06,520 --> 00:12:09,560 Speaker 3: The RBA, by going slow, is hoping that we can 233 00:12:09,600 --> 00:12:12,240 Speaker 3: get rid of inflation with an unemployment rate around four 234 00:12:12,240 --> 00:12:15,520 Speaker 3: point five percent, so much much lower, and not tip 235 00:12:15,600 --> 00:12:16,880 Speaker 3: us into a recession. 236 00:12:16,520 --> 00:12:19,599 Speaker 2: Tom It all sounds like fairly goodish news to me. 237 00:12:20,320 --> 00:12:22,839 Speaker 2: But you had a bit of a caveat at the 238 00:12:22,880 --> 00:12:25,520 Speaker 2: beginning there that it wasn't all good. So what's the 239 00:12:25,559 --> 00:12:26,320 Speaker 2: bad news here? 240 00:12:26,559 --> 00:12:30,240 Speaker 3: Yeah, so so good ish news are I guess the 241 00:12:30,280 --> 00:12:33,520 Speaker 3: two key issues that are worth highlighting still some challenges 242 00:12:33,520 --> 00:12:35,720 Speaker 3: that lie ahead for us. The first one of those 243 00:12:35,760 --> 00:12:38,120 Speaker 3: is the rental crisis, which we've spoken about a lot, 244 00:12:38,240 --> 00:12:40,360 Speaker 3: you know, a year ago, I think we were mostly 245 00:12:40,400 --> 00:12:44,120 Speaker 3: talking when it came to inflation, about petrol, about groceries. 246 00:12:44,720 --> 00:12:47,000 Speaker 3: Rent is really the main story now. So in the 247 00:12:47,040 --> 00:12:49,560 Speaker 3: last three months, rent went up by I think the 248 00:12:49,600 --> 00:12:52,600 Speaker 3: most since nineteen eighty eight, which is kind of crazy, 249 00:12:52,880 --> 00:12:55,520 Speaker 3: and it's now, you know, really a standout compared to 250 00:12:55,559 --> 00:12:57,920 Speaker 3: other categories, you know, in terms of inflation and the 251 00:12:57,920 --> 00:13:00,800 Speaker 3: burden that it's representing to the people who ran. That's 252 00:13:00,840 --> 00:13:03,840 Speaker 3: a really tricky one because you know, the RBA, there's 253 00:13:03,840 --> 00:13:05,880 Speaker 3: not much the RBA can do, and we certainly can't 254 00:13:05,920 --> 00:13:09,040 Speaker 3: click our fingers and fix that overnight. A big part 255 00:13:09,080 --> 00:13:11,720 Speaker 3: of the problem with the rental market is a shortage 256 00:13:11,720 --> 00:13:13,839 Speaker 3: of rental properties. There's going to be a lot of 257 00:13:13,880 --> 00:13:16,680 Speaker 3: pressure on state governments to fix that over the longer term, 258 00:13:16,679 --> 00:13:18,760 Speaker 3: and maybe in the short term to consider ideas like 259 00:13:18,800 --> 00:13:21,760 Speaker 3: rent freezers or rent caps, but it's not a problem 260 00:13:21,800 --> 00:13:24,160 Speaker 3: that's going away anytime soon, and that's going to be 261 00:13:24,200 --> 00:13:27,439 Speaker 3: really difficult for people. The other problem is quite different, 262 00:13:27,520 --> 00:13:31,120 Speaker 3: and that is that even though there are clearly very 263 00:13:31,200 --> 00:13:33,640 Speaker 3: many people who are doing it very tough at the moment, 264 00:13:33,679 --> 00:13:35,360 Speaker 3: who are paying a lot more on their mortgages or 265 00:13:35,400 --> 00:13:40,199 Speaker 3: in their rent, there remains a group of Australians who 266 00:13:40,480 --> 00:13:43,880 Speaker 3: keep spending at quite high levels. And so, you know, 267 00:13:43,920 --> 00:13:47,040 Speaker 3: I think when you look beyond the headline, number one 268 00:13:47,040 --> 00:13:50,920 Speaker 3: of the concerning things in this week's inflation update was 269 00:13:50,960 --> 00:13:54,880 Speaker 3: that discretionary spending, so prices for things that are not 270 00:13:55,040 --> 00:13:59,520 Speaker 3: essential like travel and meals out and recreation and retail, 271 00:13:59,720 --> 00:14:03,600 Speaker 3: that spending is still really strong, and the prices are 272 00:14:03,600 --> 00:14:06,120 Speaker 3: going up by even more than they were a year ago. 273 00:14:06,760 --> 00:14:09,960 Speaker 3: So there are still some people who are continuing to 274 00:14:10,040 --> 00:14:13,960 Speaker 3: have money to spend, and that could be a sign 275 00:14:14,080 --> 00:14:16,880 Speaker 3: that inflation might stick around longer than we hope that 276 00:14:16,960 --> 00:14:22,040 Speaker 3: it will. And that's tricky because interest rates alone are 277 00:14:22,040 --> 00:14:24,760 Speaker 3: not necessarily going to be enough to solve that, especially 278 00:14:24,840 --> 00:14:29,040 Speaker 3: if some of the spending comes from wealthier people with 279 00:14:29,080 --> 00:14:32,240 Speaker 3: no mortgages who kind of aren't affected by interest rates. 280 00:14:32,720 --> 00:14:35,920 Speaker 3: So that's going to continue to be a challenge, and 281 00:14:35,960 --> 00:14:37,320 Speaker 3: we are I guess you know, we're still on a 282 00:14:37,360 --> 00:14:39,800 Speaker 3: tight rope. We still have this balancing act where we're 283 00:14:39,840 --> 00:14:43,960 Speaker 3: trying to get through inflation without causing too much collateral damage. 284 00:14:44,320 --> 00:14:47,440 Speaker 3: But you know, we should celebrate good news when it comes, 285 00:14:47,600 --> 00:14:50,240 Speaker 3: and as things stand kind of eighteen months into our 286 00:14:50,280 --> 00:14:53,960 Speaker 3: fight against inflation, things are progressing certainly better than they 287 00:14:53,960 --> 00:14:55,760 Speaker 3: could have. So there's your goodish news. 288 00:14:56,560 --> 00:14:59,080 Speaker 2: Had I do killed it, I'd like to have you 289 00:14:59,160 --> 00:15:01,600 Speaker 2: back on for more edition news and less bad news 290 00:15:01,640 --> 00:15:02,120 Speaker 2: in future. 291 00:15:02,160 --> 00:15:04,120 Speaker 3: Tom pleasures are I'll see you next time. 292 00:15:08,840 --> 00:15:11,320 Speaker 2: Thanks so much for listening to the Daily OS this week. 293 00:15:11,440 --> 00:15:15,960 Speaker 2: If you're listening on Spotify and you have any thoughts, feelings, questions, 294 00:15:16,040 --> 00:15:19,520 Speaker 2: or anything else about this episode, maybe why Tom recorded 295 00:15:19,560 --> 00:15:22,240 Speaker 2: the entire thing under a blanket, you can shoot us 296 00:15:22,240 --> 00:15:24,080 Speaker 2: a message in the Q and a box. We have 297 00:15:24,200 --> 00:15:27,680 Speaker 2: loved watching the responses over the past few weeks. Otherwise, 298 00:15:27,760 --> 00:15:30,600 Speaker 2: we'll be back again on Monday. Have a wonderful weekend.