An angry Michelle Bullock won’t hear a bad word about the Australian economy.
Reserve Bank governor Michele Bullock has fired back at Nationals senator Matt Canavan after he accused her of “gaslighting” Australians over the state of the Australian economy.
Ms Bullock has also rejected repeated efforts by the federal opposition to pin the blame for rising inflation and interest rates on government spending.
“I do want to inject one positive here, and that’s the labour market,” Ms Bullock said.
Here is the clash in which the RBA comes off rather badly as it defensively tries to cherry-pick its way out of the truth.
Here is the RBA forecast at issue.
Putting a positive spin on this is gaslighting.
Worse, Goldman today argues that the RBA is wrong again. What is really going on is a temporary energy shock, entirely the government’s fault.
Goldman estimates that price growth for “administered” goods and services accounted for most of the inflation increase during the first half of 2025, and by the end of 2025, it had accelerated to 7.6% year over year.
Inflation increased by 2.8% annually when these administered prices were taken out of the equation.
Goldman does not think that the increase in administered prices is due to long-term factors.
Notably, the substantial power rebates are expected to be mostly unwound by February, which would represent a sharp slowdown from the 25.6% annual growth observed during the preceding 12 months.
Goldman further notes that following an out-of-cycle rise in Sydney water prices in October, the price regulator recently declared that the size of these price resets would be more than cut in half during the next four years.
As well, the tobacco price, which has risen by 23 basis points in the past year, will likewise drop now that the additional three-year 5% tobacco excise has ended.
I entirely agree. But, instead, the RBA has made wholesale changes to its economic model.
I am sorry, but the Aussie economy has not changed its spots this dramatically.
Sure, there are supply constraints emanating from the immigration-led economic model that sit on productivity, but any price effects will be crushed by falling wage growth in due course, which is the nature of the beast.
The only major change from the last cycle is much stronger public spending, which is disguising some of the mass immigration externalities.
So, again, Bullock is gaslighting. Indeed, she is the Gaslighter-in-Chief, refusing to discuss any of the real problems of the economy, notably the effects of the immigration-led economic model.
The RBA is wrong (again) and will crush the life out of an already half-dead economy to no good effect if it keeps hiking rates.
