News&Views no. 38
Updated: Oct 21, 2022
G'day friends and other contacts.
I have returned (in Italy, a wonderful break) .
The general news is 'not much'; that is, there has not been a lot happening due to Federal Government 'doings'. The latest outcry is about a lot of 'grubs'; and an investigation is required by the Federal government over (alleged) theft of medical spending. The Federal Treasurer yesterday asserted 30 % Federal medical spending was dubious and (one assumes) an excessive amount. The investigation will reveal how far above the level of a consistent amount (that aligns with genuine medical practice expenses) the spend has been.
A bigger worry is inflation. The powers say the current floods will increase inflation (as in the USA) to near 8 per cent. That would be an accurate adjustment.
Since 1990 it has been 'Demand Inflation', but in 2022 it would appear to be have become 'Supply inflation'. As usual, serious changes take time to be recognised by the big shots. I suspect the smaller experts are already aware of the evolution. The political leaders' comments yesterday will produce more sensible results. Dare I say, an increased inflation close to 8 per cent is far too big to be ignored.
Obvious need for correction, but what to do? The problem with a new form of inflation 'Supply inflation', is that it has been at work for at least a year and is only now being recognised. The Feds are trying to cut spending (overspends caused by floods, pandemics, etc.). The big question is how fast to reduce inflation to 2 to 3 % - the RBA target. This was only recognised in 2022 after its CEO abandoned this number in 2020, and has been only just adjusted.
The Federal men need to find people like this 'Blogger'. Now my holiday in Italy is over, I would be available two days a week by sensible Fed men but no doubt they have never met me. Feel free to read, CEO and Treasurer.