JENI O’DOWD: Inflation disaster means it’s time for Albanese to go
Housing is down, living costs are through the roof and there’s no light at the end of the tunnel. And Albanese and Chalmers still won’t admit they’ve got it badly wrong, writes Jeni O’Dowd.
Fifty-five years ago, the late Malcolm Fraser warned us life wasn’t meant to be easy. It seems Anthony Albanese is the first Prime Minister determined to prove him right.
Last week he was asked the only question that matters to Aussies right now: when will life get easier? And I wasn’t surprised that he didn’t have answers, only excuses and some pretty lame ones at that.
“These challenges won’t be solved overnight,” he said. No kidding, Sherlock.
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By continuing you agree to our Terms and Privacy Policy.He then lectured us about global pressures, which I’m pretty sure we all understand because if you don’t, you must have been living on the moon for the past year.
This is Australia today: we struggle to buy fresh food. We struggle to pay our electricity bill. We struggle to fill up our car. We struggle to pay rent, and buying a house is impossible for most of us.
Annual inflation has jumped to 4.3 per cent, up from 4 per cent the month before. Underlying inflation, the number the Reserve Bank actually cares about, is sitting at 3.6 per cent, well above its 2-3 per cent target.
I particularly loved the part of his response where he said measures such as cheaper medicines, free TAFE and expanded Medicare services were helping households manage rising costs.
Albo, try telling a family that has to find another $110 or so in the monthly mortgage repayment that free TAFE has them covered.
After yesterday’s rate rise, the 17th since Labor took office, the average borrower will pay about $550 a month more than they did in January.
Roy Morgan says almost a third of owner-occupier mortgage holders, about 1.75 million people, are already at risk of mortgage stress.
Yesterday’s rise pushed that past 1.8 million. Comparison site Finder reports that borrowers warn one more hike will push them over the edge. Many aren’t even getting that far. They pay for groceries, and there’s nothing left.
And now people are using the R word. Reserve Bank governor Michele Bullock admitted the economy is slowing so much that households may feel like they’re in a recession, even if technically we’re not.
Then this morning, Finance Minister Katy Gallagher went on the ABC and asked for a pat on the back. Honestly, I nearly spat out my tea at the sheer audacity. Only a Government completely out of touch could look at an 18-year high in interest rates and ask for a round of applause.
She said there “should be some acknowledgement” of the savings the Government had made, and that its hard work over the past four years was “actually being seen in the economic data”.
The data she’s talking about shows inflation going up, unemployment going up, and interest rates going up. About the only thing going down is the value of people’s homes.
Read the room, Minister
So let’s also talk about housing. This is where I think the Government has done something it will regret for a very long time.
In the May Budget, it limited negative gearing to new builds and scrapped the 50 per cent capital gains tax discount. The theory was that winding back investor tax breaks would help first-home buyers.
What happened next was entirely predictable. Investors pulled back, rates kept rising, and prices started falling.
Cotality says national values were down 5.2 per cent from their March peak by the end of September, shaping up to be the biggest property downturn in 40 years. Domain recorded the steepest quarterly drop in house prices on record.
Falling prices might sound like good news if you’re 28 and saving for a deposit. But for millions of older Australians, the family home isn’t just where they live. It’s their retirement plan. It’s what they’re counting on to downsize, to top up the super, to help the kids, to pay for aged care when the time comes.
When that home loses value, the plan does too.
It seems the Government forgot that when it drew up the Budget’s housing changes. And its own Treasury has since made the point.
September’s Intergenerational Report says the number of Australians aged 85 and older will triple, from 625,000 today to 1.9 million, with most of that growth landing in the 2030s and 2040s.
The over-65s are set to grow by 87 per cent across the next four decades, and most of them are banking on their homes.
For people watching their biggest asset shrink, it feels a lot like a death tax on the family home, wrapped in nicer paper.
What really gets me is that it’s not as if there aren’t good ideas out there to help us. There are plenty, and some are within Labor’s own ranks.
Former minister Ed Husic talked about price caps on basics like bread and milk, pointing the finger at supermarket profits.
Within hours, Assistant Treasurer Daniel Mulino poured cold water on it, citing the grocery code of conduct and the consumer watchdog.
Meanwhile, Coles and Woolworths’ supermarket divisions made a combined $5.3 billion in earnings last financial year, while people skip meat — now so pricey some supermarkets lock it up — to make the weekly shop stretch.
None of his suggestions are radical. Cut the waste. Cut the red tape. Trim the public service. Stop handing out cost-of-living relief to everyone, and give it only to the people who actually need it. Put a cap on how fast spending can grow each year.
Most households would recognise that list. It’s called a budget.
Yet the Treasurer keeps telling us his spending isn’t the main problem and instead points to the war in the Middle East.
The Opposition has its own credibility problems, and I’m not pretending the Coalition has some magic wand. But shadow treasurer Tim Wilson landed a punch when he said nobody believes Jim Chalmers’ spin any more. Not the RBA, not the IMF, not even Labor’s own backbench.
He’s right. And when your own MPs are floating ideas you won’t touch, that tells you something about where this Government is at.
This Government has run out of road. It has no new answers, it has stopped listening, and it is hiding behind “global pressures” while families do the maths at the kitchen table and come up short.
Australians asked a simple question. When will life get easier?
The honest answer, it seems, is that the Prime Minister doesn’t know.
And that’s exactly why this lot need to go.
