26-October-2011
Portfolio Media Releases
The sharp decline in underlying inflation and the impending carbon tax highlight the softness in our economy at a time when many households and businesses are doing it tough.
The softening inflation data gives the RBA something to seriously consider when it meets on Melbourne Cup Day.
The Gillard government by failing to get its own fiscal house in order with its continued spending and borrowing has made the RBA’s job so much more difficult.
Any reduction in interest rates next week would give some welcome relief to households feeling the strain of mortgage stress and the many businesses struggling in a two-speed economy.
The inflation figures show that the biggest cost of living increases came in the daily essentials, including water and sewerage (8.6 per cent) electricity which spiked 7.8 per cent as well as property rates and charges (5.2 per cent).
Electricity prices have increased 60 per cent since Labor came to power.
This highlights the Gillard government’s lack of empathy and disconnect with everyday Australians by imposing a carbon tax which will drive power prices even higher.
While Julia Gillard and Wayne Swan lecture the Europeans about living within their means they are set this year to spend $22 billion more than the revenue they raise.
During a mining boom they will preside over the three biggest budget deficits in our history.