For the first time in a decade the coming election will be at a time of increasing inflation and talk of rising interest rate. And while it is clear interest rates are always a political hot potato, Greg Jericho writes in his latest Guardian Australia column that we should not lose sight of the need for government support.
Inflation is occurring off the back of the largest government intervention and the lowest interest rates in post-WWII history. But while the economy is performing better than might have been expected when the pandemic first occurred it would be a mistake now to quickly reduce economic support from the public sector.
After the global financial crisis, worries about debt and deficit took precedence over the strength of the economy. At a time when government borrowing rates still remain historically low, the need to improve productivity through infrastructure and support in areas such as education and health, as well as equality improvements through high a higher Jobseeker rate, should take precedence in the upcoming federal budget.
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
Delayed RBA cut is welcome, but borrowers are still lagging
The RBA has cut interest rates – five weeks too late.
Budget 2026: Housing changes to slowly reverse decades of damage
The government’s changes to capital gains and negative gearing will begin to undo decades of damage to the housing market caused by Howard-era policies – so will Elinor actually be able to buy a house?
BREAKING: Australia’s housing market still cooked
Even the Mathias Cormann-led OECD says the capital gains tax discount and negative gearing are a problem.