Chalmers | Jotup

Underlying inflation has slipped below 6%, but is the slide enough to stop the RBA pushing up rates further?

Retrieved on:

Mercredi, juillet 26, 2023

The quarterly results are consistent with the newer monthly measure of annual inflation which has also been falling since hitting a high of 8.4% in December.

Key Points:

The quarterly results are consistent with the newer monthly measure of annual inflation which has also been falling since hitting a high of 8.4% in December.
Helping bring inflation down were state government electricity rebates and cuts in the prices some households paid for medicines.
The prices of new dwellings grew more slowly as demand eased and problems with the supply of materials improved.
Conversely, there were sharp increases in the prices of insurance and some other financial services.

Underlying inflation down

The fall in Australia’s inflation is in line with falls in other Western nations including the United States, Canada and the United Kingdom.
An exception is China, which has almost no inflation.
Much of the slide in Australia’s inflation rate reflects weaker economic growth.
While he would prefer inflation to be falling more quickly, Australia was “making progress”.

What does it mean for my mortgage?

Today’s news does not suggest the bank needs to lift rates further.
It shows it is still on what Lowe calls the “narrow path” to getting things right.
But it is likely to take comfort from the fact inflation is falling as it expected it to, and at about the expected pace.
At 6%, inflation remains well above its 2-3% target.

Chris Barrett becomes new head of the Productivity Commission, as Jim Chalmers flags fresh focus

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Lundi, juillet 24, 2023

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Treasurer Jim Chalmers has appointed Chris Barrett, an economist with extensive public service experience, as the new chair of the Productivity Commission.

Key Points:

Treasurer Jim Chalmers has appointed Chris Barrett, an economist with extensive public service experience, as the new chair of the Productivity Commission.
Barrett was former Treasurer Wayne Swan’s chief of staff when Chalmers was the deputy chief of staff.
Barrett is presently deputy secretary of the economic division of the Victorian Department of Treasury and Finance.
The outgoing head of the Productivity Commission, Michael Brennan, was appointed by the Coalition and had worked for senior Liberals.

Cheap shots aside, Chalmers has work to do to improve his new 'wellbeing' framework

Retrieved on:

Vendredi, juillet 21, 2023

But that’s an easy and somewhat cheap criticism to make.

Key Points:

But that’s an easy and somewhat cheap criticism to make.
Notably, the Treasury document reports “little change” in overall life satisfaction based on statistics from 2020, and “stable” psychological distress, based on statistics from 2018.
It’s as if the newspaper wants to find fault with the document, labelling it “a pitch to progressives” and a “fad”.

We’re late to this party

But the need to shift away from using the blunt instruments of national income or gross domestic product (GDP) to measure progress has long been recognised.
Even the inventor of GDP, Simon Kuznets, said a nation’s welfare can “scarcely be inferred from a measurement of national income”.
New Zealand, Wales, the United Kingdom, India and Canada are all ahead of Australia in adopting wellbeing frameworks to shape their budget decisions.

The problem with ‘average’ Australians

The measures for health, for example, include life expectancy, mental health, prevalence of chronic conditions, and access to health and support services.
As Paul Krugman put it, if Elon Musk walks into a bar then the average person there becomes a billionaire.
But not all Australians are sharing in this.
For example, the national Carer Wellbeing Survey shows that unpaid carers have much lower wellbeing compared to the average Australian.

Regional wellbeing

Some aspects of wellbeing – such as social connection – are often higher in rural areas.
For example, the University of Canberra’s Regional Wellbeing Survey, conducted since 2013, has consistently shown that Australians living in outer regional and remote areas report poorer access to many services, including health, mobile phone and internet access.
But many other indicators don’t have specific data for rural regions, and don’t provide insight into the often large differences in wellbeing of different rural communities.

The importance of up-to-date data

Yes, the data in some areas is outdated, such as the cost of rent or mortgages and financial security, which come from 2020 – predating the surge in rents and higher interest rates.
This should include ensuring a sample of the many groups known to be at higher risk of low wellbeing but often under-represented in national data collections.
But while Measuring What Matters is limited by the scope of the data available, it is a step in the right direction.

Australia's first wellbeing framework is about to measure what matters – but it's harder than counting GDP

Retrieved on:

Mercredi, juillet 19, 2023

In an implicit admission that the Commonwealth budget may not measure what really matters, Treasurer Jim Chalmers is about to release what he is calling “Measuring What Matters” – Australia’s first national wellbeing framework.

Key Points:

In an implicit admission that the Commonwealth budget may not measure what really matters, Treasurer Jim Chalmers is about to release what he is calling “Measuring What Matters” – Australia’s first national wellbeing framework.
Chalmers’ description of it as Australia’s “first” national wellbeing framework is an acknowledgement that first wellbeing statement didn’t amount to a framework.
Chalmers says he is “up for the necessary conversations” needed to improve the framework further.
And some of the things that are incredibly important for wellbeing are hard to measure, including what happens within relationships or access to sunlight.

Meet Michele Bullock, the RBA insider tasked with making the Reserve Bank more outward-looking as its next governor

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Vendredi, juillet 14, 2023

She is already the deputy governor, having been appointed to that post by the previous treasurer Josh Frydneberg in April last year.

Key Points:

She is already the deputy governor, having been appointed to that post by the previous treasurer Josh Frydneberg in April last year.
Yet, as a 38-year veteran of the bank, having joined in 1985, she could be seen as perhaps another insider.
Michele Bullock was raised in regional New South Wales and studied economics at high school and the University of New England, graduating with honours.

Why was Phil Lowe passed over?

for more than four decades of dedication and commitment and service, not just to the Reserve Bank and not just to the economy, but to our country as well; Phil Lowe goes with our respect, he goes with our gratitude, and he goes with dignity.
Under Lowe, the bank adopted a deliberate policy of keeping interest rates higher than were needed to restrain inflation, leading to higher-than-needed unemployment.
Lowe rejected several of these findings, which is why changing the culture at the top of the bank would have been difficult had he remained.

What’s next?

Bullock and her replacement as deputy (to be announced by Chalmers shortly) take office in September.
By then it is unlikely there will be much to do differently.
Whether or not Bullock faces fewer challenges than Lowe did, she is well placed to lead one of Australia’s most important institutions into the 21st century.

Reserve Bank veteran Michele Bullock becomes first woman governor, replacing Philip Lowe

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Vendredi, juillet 14, 2023

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The government has appointed Michele Bullock the new governor of the Reserve Bank – the first woman to occupy the post.

Key Points:

The government has appointed Michele Bullock the new governor of the Reserve Bank – the first woman to occupy the post.
Bullock, currently deputy governor, replaces Philip Lowe, who has weathered strong criticism, including from within Labor, during sustained rises in interest rates.
Her appointment best combines experience and expertise with a fresh leadership perspective at the Reserve Bank as well.
The Reserve Bank paused the cash rate this month, but Lowe made it clear rates could go higher if necessary.

Reserve Bank Governor Lowe announces changes to bank's operations as cabinet readies to approve who will lead it

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Mercredi, juillet 12, 2023

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Lowe also reiterated that interest rates – held steady by the bank this month – might have to rise further to combat inflation.

Key Points:

Lowe also reiterated that interest rates – held steady by the bank this month – might have to rise further to combat inflation.
It is generally expected Lowe will be replaced, when Treasurer Jim Chalmers takes his recommendation to cabinet.
They include having two boards – a Monetary Policy Board with greater economic expertise to set monetary policy, and a Governance Board to oversee corporate governance.
In other changes, the governor will face the media after each board meeting to explain its decision on rates.

Chalmers 'measures what matters' – tracking our national wellbeing in 50 indicators

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Mardi, juillet 11, 2023

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Australia’s first national “wellbeing framework”, to be released by Treasurer Jim Chalmers within weeks, will provide about 50 indicators of how Australians are doing, that will then be tracked over time.

Key Points:

Australia’s first national “wellbeing framework”, to be released by Treasurer Jim Chalmers within weeks, will provide about 50 indicators of how Australians are doing, that will then be tracked over time.
The Measuring What Matters statement will be around the themes of “healthy, secure, sustainable, cohesive, and prosperous”, Chalmers said in a speech in Melbourne delivered late Tuesday.
Chalmers said the traditional economic metrics – GDP, income, employment – didn’t tell the whole story.
Chalmers said the government was also reforming institutions including the Reserve Bank, the Productivity Commission, and the public service.

This year's surplus will be bigger than the $4.2 billion projected at budget time: Chalmers

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Mardi, juin 27, 2023

The surplus for the financial year that ends Friday will be larger than the $4.2 billion forecast in the budget, Treasurer Jim Chalmers will say on Wednesday.

Key Points:

The surplus for the financial year that ends Friday will be larger than the $4.2 billion forecast in the budget, Treasurer Jim Chalmers will say on Wednesday.
In a speech to be delivered in Darwin, Chalmers says the government had been “deliberately cautious” in its estimate in the budget, “given the history”.
“We’re expecting the surplus will be bigger than forecast in May.”
The surplus upgrade has enabled the government to recently announce $2 billion for housing, distributed to the states and territories before the end of the financial year.
The good news on the surplus comes as Australian Bureau of Statistics figures on Wednesday will reveal how the fight against inflation is progressing.

4 ways to bring down rent and build homes faster than Labor's $10 billion housing fund

Retrieved on:

Mardi, mai 16, 2023

His first budget, in October, and his second, this month, contained a suite of measures designed to stop rents going “through the roof”.

Key Points:

His first budget, in October, and his second, this month, contained a suite of measures designed to stop rents going “through the roof”.
By far the biggest of those – the blockbuster – was a A$10 billion Housing Australia Future Fund to finance social and affordable housing.

$10 billion, but off-budget and largely unspent

The $10 billion (or whatever that goes into the fund) isn’t actually “spent” as far as the budget is concerned.
It doesn’t come off the budget surplus, or add to the budget deficit, because it remains in the government’s hands.
When Labor came up with the idea of the Housing Australia Future Fund in 2021, it looked a surer bet.

Limits on how quickly new homes can be built

A truly bizarre and long-established fact of Australian home building is that it never gets done more quickly.
The number of houses under construction varies wildly; at times it has been low, late last year it reached an all-time high.
But the number of houses completed seems to chug along at the same rate regardless.

1. Boost rent assistance

The “largest increase in more than 30 years” in Commonwealth Rent Assistance amounts to $16 per week.
Chalmers might well have been concerned that a bigger increase in rent assistance would have pushed up rents, but there’s a way of dealing with that.

2. Limit rent increases

In most states, increases in the prices we can be charged for electricity, gas and water are limited by regulation.
In the Australian Capital Territory, increases in rents are limited by regulation.
The maximum permitted increase is 110% of the most recent annual increase in Canberra rents reported to the Bureau of Statistics.

3. Bribe states and councils to rezone land

4. Restrict negative gearing to new builds

Negative gearing and the concessional rate of capital gains tax that accompanies it drive Australians into becoming landlords.
Limiting negative gearing to newly-built homes – as Labor promised in 2019 – would get them to fund new builds.