SIMON BIRMINGHAM: Anthony Albanese’s inflation-fighting skills as good as Raygun’s breakdancing prowess
If fighting inflation were an Olympic sport then Anthony Albanese’s performance in Paris would have ranked alongside our inglorious national efforts in breakdancing.
Under Labor, Australia is beating the world in the one competition in which you want to come last: the inflation rate.
No government can completely dodge global factors. COVID, war in Ukraine, terrorists in the Red Sea. They all play a role.
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The Albanese Government is neither a good stockbroker nor a good government.
When Labor was elected, inflation in Australia was lower than in comparable nations. Now it is higher, and forecast to stay higher.
Australia’s deteriorating comparative position isn’t driven by global factors. The blame for Australians copping an inflation rate staying higher for longer lies with big government spending.
Look at where we were when Labor was elected, what was promised, and where we now find our country.
In 2022, with COVID-induced supply constraints around the world and global oil prices spiking due to Russia’s invasion of Ukraine, inflation surged globally.
As we all know, Australia wasn’t immune. Inflation went up and there was one interest rate increase. But under Liberal leadership we did better than comparable economies.
As Australians voted in 2022 our inflation rate was 1.2 points lower than New Zealand, 1.6 points lower than Canada, 2 points lower than the European Union, 2.5 points lower than the United States, and 3 points lower than the United Kingdom.
Nonetheless, Anthony Albanese promised that: “Labor has real, lasting plans for cheaper electricity, cheaper childcare, cheaper mortgages, cheaper medicines” and that “almost all families will be better off”.
Australians don’t need statistics to know that these promises lie in tatters. They are grappling with food bills up 12.3 per cent under Labor, rents up 16.3 per cent, and gas bills up 33.8 per cent.
Interest rates have gone up 12 times under Anthony Albanese and Labor.
Worse still, in terms of economic management, Australians are now facing continued increases in prices even as inflation has come under control in other countries.
Labor inherited an improving Budget position that delivered budget surpluses, but Albanese Government decisions will now see the budget worsen in the years ahead.
The International Monetary Fund has just released projections for developed countries like ours. The IMF assessment shows how much worse the Albanese Government has made things.
After three Labor budgets, Australia’s 2025 inflation rate is now forecast to be 1.4 points higher than New Zealand, 1.6 points higher than the United Kingdom or European Union, and 1.7 points higher than Canada or the United States.
Thanks to Labor’s spending Australians will keep seeing the price of everything go up, while other countries see prices stabilise.
The IMF data also calls out the trickery in Labor’s claims to be tackling inflation. Labor’s much-vaunted energy bill rebates will see inflation dip, just in time for the next election, but because the rebates are one off, those electricity bills and inflation just jump right back up again afterwards.
In bad news for mortgage holders, the bad inflation data sees financial markets further delaying expectations of when, or if, interest rates may fall.
European borrowers are forecast to enjoy rates of 2.5 per cent and Americans of 2.9 per cent, while Australians continue to pay 4.35 per cent.
As Reserve Bank deputy governor Andrew Hauser bluntly put it this week: “The reason that we’re not cutting rates at the moment …relative to some of the other central banks, is fairly straightforwardly stated, actually — that inflation is still too high.”
Many Australians literally can’t afford another three years of Labor’s inflation fuelling spending.
Labor inherited an improving Budget position that delivered budget surpluses, but Albanese Government decisions will now see the budget worsen in the years ahead, sliding back into deficit, making Australia’s inflation fight even harder.
When Labor was elected, Australia was an outlier on inflation, in a good way. After three years of Albanese, Australia is still an outlier on inflation, but in a bad way.
Like the Olympics, you can’t win every economic race. But of 42 countries assessed by the IMF, Australians are expected to cop the second highest inflation rate.
Only Slovakia is forecast to have worse inflation than Australia. The head judge for breakdancing at the Paris Olympics was a Slovak. At least he will envy us for something.
