Facing a collapse in the polls amid the worst rental crisis in generations and soaring mortgage stress, Prime Minister Anthony Albanese has turned to lying about Australia’s stubbornly high inflation.
On Wednesday night, Reserve Bank of Australia (RBA) governor, Michele Bullock, told the Australian Business Economists dinner that Australia’s inflation is “increasingly homegrown and demand driven”, and “an indication that aggregate demand is sufficiently greater than aggregate supply”.
Then on Thursday, Anthony Albanese contradicted the RBA governor when he told reporters at a news conference in the northern Sydney suburb of Ryde that Australia’s inflation is “a global phenomenon”.
While Australia’s inflation was initially driven by supply-side factors, the reality is that the Albanese government’s record immigration program, which saw an estimated 500,000 net migrants land in Australia in the 2022-23 financial year, is now driving much of Australia’s inflation:
This record population growth has pumped aggregate demand at the same time as the RBA is desperately trying to slow demand via rate hikes.
While individual household spending is falling, these cuts are being overwhelmed by the sheer number of new households being added to the economy:
The impact is being felt everywhere, but is most evident in the rental market where rents – one of the largest components of the CPI basket – are going through the roof as demand far outpaces supply:
It is difficult for the RBA to curb demand with interest rates – which only impacts around one-third of Australians carrying mortgages – when the Albanese government is fire-hosing record numbers of people (demand) into the economy via immigration.
So long as the Albanese government persists with its extreme immigration policy, the RBA will retaliate with higher interest rates.
Instead of lying about the situation, Anthony Albanese should confront the problem head-on and move immediately to freeze immigration into Australia.
Otherwise, inflationary pressures will continue, and Australian renters and mortgage holders will be thrown to the wolves.
