![]() ![]() "If there's more that we can responsibly do between now and in the May budget, then obviously, we will consider that," the treasurer said. He also hinted that those lower income groups might benefit from additional cost of living assistance in the budget on top of electricity rebates, increased rent assistance and bigger childcare subsidies already implemented. "What this shows is we're getting wages moving again overall in our economy," Chalmers continued, "but we are prioritising people on the lowest pay who need the most help." Treasurer Jim Chalmers was out yesterday spruiking that fact. The second cause for optimism is that wage growth exceeded price growth for the past couple of quarters, meaning working Australians on the whole are no longer suffering continued real wage cuts. Many think the first rate cut might come as early as June. That kind of forecast has traders on the financial markets fully pricing in a Reserve Bank rate cut by September this year, on hopes that inflation will be close to coming within the RBA's 2-3 per cent target by then and still on a clear downward trend. The most recent monthly numbers had annual price rises at 4.9 per cent over the year to October and most economists expect that to fall to 4.5 per cent when the latest November figures come out tomorrow.ĬBA's economists are hopeful that annual inflation might even start with a three when the December figures are released near the end of this month. So, after what has been a miserable decade for the average working-age Australian, what are the causes for optimism in 2024?įirst among them is the expectation that the stubborn inflation, which peaked just below 8 per cent on an annual basis in December 2022, will continue on its downward trajectory. Inflation and rates expected to head down Those rates kept rising in 2023 as what was once thought of "transitory" inflation proved a lot more stubborn to contain than many economists, including those at major central banks, expected. The end of lockdowns and reopened borders in 2022 promised much but instead delivered a war in Ukraine, which exacerbated COVID supply chain disruptions rubbing up against stimulus-fuelled demand, stoking the highest inflation in decades.Īlong with the inflation came the biggest jump in interest rates for more than a generation, after a general trend of falling borrowing costs since the early 1990s. Sure government stimulus bailed out most businesses and many individuals but, despite various booms the cash splash ignited, it wasn't a particularly joyous time for most. In 20 we went through COVID lockdowns that shuttered vast swathes of the economy for months at a time. Subsequent events might have largely erased it from memory, but Australia's economic performance between 20 was so poor that one of our leading economists, Ross Garnaut, described the period as the nation's "dog days". ![]() When we said "happy new year" last week, for the first time in quite a while it may actually turn out to be true, at least in an economic sense. ![]()
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