On Tuesday night, I was interviewed on Sky News by Sharri Markson in relation to the 0.25% interest rate hike from the Reserve Bank of Australia (RBA).
In the interview, I explained how the Albanese Government’s record immigration policy is helping to lift inflation, increasing inequality, and reducing productivity:
Below are some highlights:
“A lot of Australia’s inflation is actually being driven by the Albanese government’s record immigration program”.
“It’s worth noting that the Reserve Bank’s rate hikes are slowing down individual households. We’re in a per capita recession. Household spending per household is shrinking. But the problem is, we’re adding so many households to the Australian economy—Australia’s population grew by nearly 630,000 last financial year—that aggregate demand keeps rising”.
“Effectively, that is what’s helping to push up this inflation through rents, through construction prices, etc”.
“It’s worth pointing out that housing accounts for around one-quarter of the CPI basket. So, when you have all this extra demand piling into housing, it pushes up rents, it pushes up construction costs, etc. That fuels inflation directly”.
“It’s not just irresponsible; it’s also inequitable. Because obviously, those soaring rental costs effectively land on the most vulnerable in Australia. And at the same time, it’s pushing up inflation, which then means the RBA is going to have to fight against that through higher interest rates, which then smashes mortgage holders”.
“So effectively, two-thirds of Australia is getting smashed. You’ve got renters, on the one hand, getting smashed by these soaring rents. Then you’ve got mortgage holders getting smashed. And then there’s another third who don’t rent and own their home outright who are laughing”.
“So, it is incredibly irresponsible. It’s obviously lifting inequality, and it’s also reducing our living standards directly, just by the sheer volume of people.
“Infrastructure, housing, nothing is keeping up”.
“Former Governor Phil Lowe said that if business Investment, housing, infrastructure doesn’t keep pace with population growth, it’s going to wreck productivity. And that’s what we’re seeing”.
“We’re basically seeing so many people come in and nothing is keeping up, and that lowers productivity. You see that through increased traffic congestion, all those sorts of things”.
I also discuss how the failure to reserve east coast gas is helping to drive up energy costs and inflation.
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