Albo is not a policy coward. He is a do-nothing backroom bovver boy with the economic instincts of a brick.
Jim Chalmers knows better what to do, but he is a policy coward.
It is a worst-case scenario for living standards. AFR.
Anthony Albanese and Jim Chalmers held private talks to agree on the need to rein in public expectations of next week’s economic roundtable, amid mounting concerns inside cabinet that the government is losing control of the policy agenda.
Separate sources close to the prime minister and treasurer, speaking on condition of anonymity, said the two men spoke face-to-face late last week about the need to “be on the same page” regarding the roundtable, a day after Albanese publicly hosed down expectations the government could implement tax increases this term for which it had no electoral mandate.
But, worse than both, is the RBA, which is “independent” and free to comment at will.
Except it’s tied itself up in knots. The Australian.
The statement on monetary policy released by RBA governor Michele Bullock on Tuesday included 297 references to productivity and a concession by the central bank that it had consistently over-estimated productivity forecasts that never “eventuated”.
As the government considers reform proposals floated by the Productivity Commission, unions, big and small business, think tanks and industry groups, Dr Chalmers said the RBA forecasts reiterated that productivity growth was Australia’s “most serious” economic challenge.
Due to weak productivity, the central bank now expects that the economy can only sustain a GDP growth rate of just 2 per cent before it starts overheating, down from its previous projection of 2.3 per cent. But it will also stem the economy’s capacity to supply goods and services, aligning more closely with subdued demand and helping keep inflation within the RBA’s 2 to 3 per cent target range.
But did the RBA mention the source of the problem? Excessive immigration. No.
What it did instead was acknowledge the issue in its data forecasts by slashing both wage growth and productivity forecasts.
Some will say that makes sense, along with a downgrade to potential growth, along with higher inflation than the last cycle.
But it doesn’t. Inflation will keep falling with wage growth as the immigration supply shock continues.
All the RBA needs to do to lift productivity is utter two words in public: slash immigration. But it won’t.
Ms Bullock, who will deliver a presentation on productivity on the first day of the roundtable meetings in Canberra next Tuesday, refused to publicly comment on productivity proposals put forward to date. “We are interested in productivity conversations but ultimately we don’t have control over that and I don’t feel in a position to comment on any particular suggestions for productivity,” the RBA governor said.
The RBA is on the path back to lowflation and doesn’t even know it.
