Here it is in black and white:
The RBA is refusing to accept Treasurer Jim “Chicken” Chalmers’ attempt to hide the energy shock with bill rebates:
In the RBA’s view, either the Albanese government addresses the core driver of the energy shock, the gas cartel, or inflation is not coming down.
In the central bank’s view, the treasurer’s bill rebates do not cut it.
In effect, the central bank has declared war on the gas cartel.
I have been more pragmatic so far, accepting that the bill rebates will lower inflation, even core inflation, but this is an admirable stance by the central bank, unprecedented in modern times.
The government now faces a stark choice.
It addresses the underlying causes of the energy shock or it faces the prospect of losing power as the central bank refuses to cut interest rates.
Equally admirably, the central bank has put its own independence on the line because the federal opposition has no plan to address the gas cartel, either.
So, if the opposition wins power, it will either have to replace the governor and gut the board, or address the gas cartel itself.
Bravo RBA.
