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  • Writer's picturePete Jonson

A firm hand on the economy, 87

Updated: Feb 24

Bank of Australia governor Michele Bullock presented by Tom Dusevic.


'Michele Bullock has quickly emerged as the pivotal figure in

Australia's political economy'. The lady's main effort is to 'put inflation in its box'.


'The RBA transitioned into a new operating format this week, including enhanced policy deliberation over a couple of days and clearer commication, with more changes to come over the course of this year'. The idea was not specified, although the serious post men hope for a reduction of future reductions of monetary work.


'Michele Bullock declared the board wanted to keep open all future options - cut, hold or raise rates - given inflation remains elevated, there was much uncertainty around the world, and risks galore on the road ahead'.


"Australia's inflation challenge is not over", she said. "An inflation rae with a '4' in front of it is not good enough and still some way from the midpoint of our target."


'Clearly not everyone is being smashed by the RBA's aggressive policy tightening older Australian's, and the wealthy'. A difficult issue remains: 'If productivity is weaker than assumed, businesses could find themses facing continued strong growth in labor costs, putting upward pressure on prices'.


'When Bullock and her board are confident inflation is decisively on the way down, that is heading back to the 2-3 per cent target zone, they'll will begin's cutting rates. The cumulative boost to middle Australia's finances from continued wage growth, weaker inflation, reduced personal tax and lower interest costs could be significent'.


'The economist's rule of thumb is that growth in living standards is driven by the three P's production, participation and productivity. Our population grew by 2.4 per cent, or 624,000, in the year to June, with a net inflow of 518, 000 migrants; the RBA assumes that overall growth rate was maintained to the end of December. That's a million more people, give or take, since Labor came to power. '


'For now, the first two P's are helping to grow the economy. Its stagnant productivity that is threatening the outlook in two ways, it confirms the lower output from each worker; and its a harbinger of more inflation trouble.'


'Bullock declares she's confident productivity will start to pick again, helped by technology and business investment. "Ultimately, I'd like to be able to look back in a couple of years' time and say: "Yes, now we are seeing productivity resume its normal trend' "she said in Tuesday's press confidence.


'What Bullock and the Albanese government wish to avoid at all cost is a resurance in inflation, which would require another dose of monetary salts. That would bring another dose of misery for homeowners and businesses; in time, job losses for voter base, to the revived and animation men and women sitting behind Albanese in the chamber this week.'




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