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What you should be paying on your borrowings (and getting on your cash) · The Money Puzzle

0:08
Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
0:11
Speaker 1: James Kirkby. Welcome aboard everybody. I think it's time to
0:15
Speaker 1: get serious really about interest rates and where they're going
0:18
Speaker 1: and how much you may have to pay on any
0:21
Speaker 1: loans you have in the near future. I mean, there
0:23
Speaker 1: may be some useful sort of counterbalance there that how
0:25
Speaker 1: much you get on your cash in the near future too,
0:27
Speaker 1: But we have a clear sense right at this stage
0:30
Speaker 1: that there is rate rises to come. More than one
0:34
Speaker 1: voice saying that now, several key people suggesting loudly basically
0:39
Speaker 1: in the public arena that there should be two to
0:41
Speaker 1: three more rate rises to control inflation in Australia. How
0:48
Speaker 1: much should you get right now on your cash? How
0:50
Speaker 1: much should you be paying on a lending arrangement, whether
0:53
Speaker 1: you're doing that for your mortgage or as an investor
0:56
Speaker 1: in property. Let's talk to Sally Tindall. She's the data
1:00
Speaker 1: so it is director at can Start and a regular
1:03
Speaker 1: on the show. How are you, Sally, I'm good, James,
1:05
Speaker 1: how are you good? Thanks? Thanks for coming on this morning.
1:09
Speaker 1: I mean, what do you think about that that first
1:12
Speaker 1: of all, that we might say emerging consensus that we
1:15
Speaker 1: have more rises ahead of us, and we might have
1:18
Speaker 1: previously thought, yeah, it's.
1:20
Speaker 2: An interesting one because the RBA is in a very
1:23
Speaker 2: difficult position at the moment. They already had an inflation
1:27
Speaker 2: problem on their hands. Inflation, they never got the genie
1:30
Speaker 2: back into the box. And now the war in Iran
1:33
Speaker 2: has really pulled a rocket under what was already a
1:37
Speaker 2: plan to hike you turn back to rate hikes and
1:40
Speaker 2: continue with that. So what we've seen two rate hikes already,
1:44
Speaker 2: one in February, one in March. West Pax Economic Team
1:48
Speaker 2: now forecasting three more. That would take our cash rate
1:53
Speaker 2: to what four point eighty five percent? That would be
1:56
Speaker 2: the highest setting since what two thousand and eight when
2:00
Speaker 2: we were coming back off the GFC. It would be
2:03
Speaker 2: an extreme setting given the circumstances. There's no guarantee though
2:07
Speaker 2: that will happen. There is broad consensus that we will
2:11
Speaker 2: see at least one more in the meeting that's coming
2:13
Speaker 2: up in about two weeks time.
2:16
Speaker 3: But the RBA is.
2:17
Speaker 2: Really struggling with a conundrum here because they're ramping up
2:21
Speaker 2: the screws on households, right households with a mortgage that is,
2:25
Speaker 2: in order to stop us spending. But really, when you
2:28
Speaker 2: look at things like consumer confidence, which is at the
2:31
Speaker 2: lowest or the fourth lowest setting since the.
2:35
Speaker 3: Records began, and I was looking at the end of ze.
2:37
Speaker 2: Data just before, I think it's since the seventies, right,
2:41
Speaker 2: it's incredible to see we've already shut up purstrics, households
2:45
Speaker 2: have already zipped them up tight because of the unknown
2:48
Speaker 2: that's coming from the war, because of the higher petrol prices.
2:51
Speaker 2: So it's really interesting to see the RBA opt to
2:54
Speaker 2: hike the cache raid to control inflation when the inflation
2:58
Speaker 2: problem now has shifted to a supply side problem rather
3:03
Speaker 2: than a demand driven problem.
3:05
Speaker 1: Well, one of the things I suppose that people want
3:07
Speaker 1: to know listening to the show is basically to translate
3:10
Speaker 1: this sort of macro picture into everyday finance. And I'm
3:14
Speaker 1: wondering whether the banks in this atmosphere of escalating reprisers
3:20
Speaker 1: are they generally putting through the on the lending side,
3:24
Speaker 1: are they're putting those rates through faster, those rate rises
3:28
Speaker 1: faster and more comprehensively than they are putting them through
3:31
Speaker 1: on the cash side. Where you might actually get some
3:33
Speaker 1: benefit from it, is that happening.
3:35
Speaker 3: Is that the case, Yes and no. It's a bit
3:37
Speaker 3: of a game with the banks.
3:39
Speaker 2: So they've passed on the two rate hikes we've already
3:42
Speaker 2: had this year in full to their variable borrowers, right.
3:45
Speaker 2: That happens about ten to fourteen days after the RBA
3:48
Speaker 2: announcement up going through rate. When we saw those rate hikes,
3:52
Speaker 2: the thirteen rate hikes in twenty two to twenty three,
3:55
Speaker 2: what we saw back then was banks would pass it
3:58
Speaker 2: on in full to their exist customers, but then discount
4:02
Speaker 2: for new customers. So there was a little bit of
4:05
Speaker 2: discounting and quite a lot of competition in the market
4:07
Speaker 2: at that point in time.
4:08
Speaker 3: We're not seeing it this time around.
4:11
Speaker 2: We're not seeing that new customer discount creep into the
4:14
Speaker 2: rates that we're seeing across the board, one or two
4:17
Speaker 2: here or there. But across the board, we're seeing just
4:19
Speaker 2: the banks pass it on in full to their variable borrowers.
4:23
Speaker 1: Right more fully, basically more fully.
4:26
Speaker 3: Yeah, for savers, it's a very different story.
4:28
Speaker 2: We are seeing banks come out and announce that they're
4:31
Speaker 2: passing on the rate hikes seemingly in full, particularly to
4:35
Speaker 2: those bonus saver accounts. But then when you get into
4:38
Speaker 2: the fine print. What we find is that the rate
4:41
Speaker 2: hike is applied to the bonus rate of those savings
4:44
Speaker 2: accounts and the base rate. When you don't meet those
4:47
Speaker 2: monthly terms and conditions, those base rates aren't moving a muscle.
4:51
Speaker 2: And certainly that's what we saw in the latest rate
4:54
Speaker 2: round of rate hikes in March, is that the big
4:56
Speaker 2: banks passed it on to all of their bonus saver
4:59
Speaker 2: accounts in.
5:00
Speaker 3: Four looks good.
5:02
Speaker 2: Some of them are, you know, looking like what they're
5:04
Speaker 2: close to five percent in many cases those rates, but
5:07
Speaker 2: the base rates CBA's goalsaver right their base rate at
5:11
Speaker 2: the moment point two five percent if you miss those
5:15
Speaker 2: monthly terms and conditions. So if you don't meet the
5:17
Speaker 2: monthly terms and conditions every single month, you're not getting
5:20
Speaker 2: rate hike at all on your savings account.
5:23
Speaker 1: Have you any sense of how many in terms of
5:25
Speaker 1: the population, if you like, in terms of the audience
5:27
Speaker 1: with the customer lists of the bank, whether the majority
5:30
Speaker 1: of people are in bonus or is it the minority.
5:34
Speaker 3: I actually don't have that data handy.
5:36
Speaker 2: I would say it's the goal saver account for CBA
5:39
Speaker 2: and Westpact Life Saver. There's some of the bank's most
5:42
Speaker 2: popular accounts. I would say bonus rates savers are incredibly popular,
5:46
Speaker 2: but I don't have the split handy. What I do know, though,
5:50
Speaker 2: is that for those savings people that have a bonus
5:53
Speaker 2: saver account, forty one percent aren't meeting the monthly terms
5:58
Speaker 2: and conditions every single month.
6:00
Speaker 3: Almost half of people with those yeah who.
6:05
Speaker 1: Were in there who might get them, don't make the terms.
6:08
Speaker 1: I never heard that figure before. Was that the surprise
6:10
Speaker 1: to you? The number of people who don't make the
6:11
Speaker 1: terms and conditions.
6:13
Speaker 2: It's not a surprise at all because you see the
6:15
Speaker 2: banks focus on it so much, so you know that
6:17
Speaker 2: there must be people missing out if they're happily passing
6:21
Speaker 2: on that rate hike to the maximum ongoing rate, but
6:24
Speaker 2: the base rate stays the same. What that tells me
6:26
Speaker 2: is that they're catching people out and helping that helping
6:29
Speaker 2: use that strategy to boost their profit margins. I should
6:32
Speaker 2: say in this research, this is cancer research. It's forty
6:35
Speaker 2: one percent of people with a bonus saver account that
6:38
Speaker 2: don't meet it every single month. It includes eleven percent
6:41
Speaker 2: of people with a bonus saver account that never ever
6:45
Speaker 2: meet those monthly terms.
6:48
Speaker 1: Is on any given months. Yeah, there would before whow
6:52
Speaker 1: I was at the first time that anyone had looked
6:54
Speaker 1: at that exercise and publicized that picture.
6:58
Speaker 2: No, I do know that the agbc's looked at this
7:00
Speaker 2: as well. It's a bugbear for the a trible c
7:02
Speaker 2: and the government has come through and said that they
7:04
Speaker 2: would look at it because it's really I think up
7:07
Speaker 2: to the banks to start explaining those monthly terms and
7:11
Speaker 2: conditions better to their customers. Clearly it's a loophole that
7:15
Speaker 2: they're willing to flaund at the moment. Some banks do
7:17
Speaker 2: the right things, other banks less so. And really there
7:21
Speaker 2: should be a rule in place where the banks have
7:23
Speaker 2: to notify you towards the end of the month to
7:26
Speaker 2: tell you if you're not going to meet those monthly of.
7:28
Speaker 1: Course it shouldn't be. Yeah, it's very much in their
7:31
Speaker 1: favor if they don't. If they don't tell you, I mean,
7:35
Speaker 1: if they tell you, we're much more likely to throw
7:37
Speaker 1: in the ten dollars or whatever it requires to match
7:40
Speaker 1: the very interesting I've been really interested in this and
7:43
Speaker 1: I don't like it, and I prefer to have a
7:46
Speaker 1: no friends, no nonsense. One is the savings rate, and
7:48
Speaker 1: it's come up on the show before, and I had
7:51
Speaker 1: my suspicions. Mostly my suspicions were actually that the banks
7:55
Speaker 1: were giving us the impression the rates were higher than
7:56
Speaker 1: they were because they were talking about bonus rates all
7:59
Speaker 1: the time and people had to jump through hoops. But
8:00
Speaker 1: I didn't know that almost half of them didn't make
8:03
Speaker 1: it on any given month. Boy oh boy, that is
8:05
Speaker 1: really interesting. We'll take a short break, folks. We're going
8:07
Speaker 1: to be back in a minute. We're going to look
8:08
Speaker 1: at specifically what you should be paying on lending if
8:12
Speaker 1: you have a loan of any types, say you have
8:14
Speaker 1: a property loan, an investment loan, a mortgage rate, and
8:17
Speaker 1: we'll just take a look all so of what you
8:19
Speaker 1: should be getting on the cash side. All right, back
8:21
Speaker 1: in a minute. Hello, Welcome back to the Australian's Money
8:35
Speaker 1: Puzzle podcast. James Kirby here with Sally Tindall of the
8:38
Speaker 1: can Star Group. She is the seer on all things
8:42
Speaker 1: interest rates and products across the market where they are
8:45
Speaker 1: a comparison website. So ideal for someone like me to
8:48
Speaker 1: talk to and you to listen to. I hope, folks. Okay, Now,
8:52
Speaker 1: Sally tell me first of all on the cash side,
8:56
Speaker 1: if I've got cash in the bank, I mean, very broadly,
9:01
Speaker 1: how much should I expect to pear? What is the
9:03
Speaker 1: sort of rock bottom I should be expecting to get
9:06
Speaker 1: from a cash in the bank. If it's possible to
9:09
Speaker 1: give a simple answer on.
9:10
Speaker 2: That, it does depend on what type of saleing's account
9:13
Speaker 2: you have or a turn depon.
9:14
Speaker 1: What about it. No nonsense, just money in the bank,
9:17
Speaker 1: no frills. I'm not doing anything and I'm not jumping
9:19
Speaker 1: through any hoops for any bank a cup.
9:22
Speaker 2: I would say as a yeah, as a highly competitive
9:25
Speaker 2: person myself, I would say, with a no strings attached account,
9:29
Speaker 2: you want to be aiming for about four and a
9:31
Speaker 2: half percent. Now you have to shop around to get
9:33
Speaker 2: that kind of rate. But we are seeing an increase
9:36
Speaker 2: in competition in this space because McCrary has been the
9:40
Speaker 2: market leader in this space no frills accounts, and they're
9:44
Speaker 2: offering a rate of four point seventy five percent after
9:47
Speaker 2: that March cash rate high. But AMP has upped the
9:52
Speaker 2: anti in recent months. It's now offering an ongoing rate
9:56
Speaker 2: of four point eight five percent. Easy Street also offering
10:01
Speaker 2: a rate of four point eight zero percent. So you
10:04
Speaker 2: can see there's a little bit of choice there for
10:07
Speaker 2: the highest ongoing savings rate with no absolutely no, well
10:11
Speaker 2: absolutely no monthly strings attached, so I'll always add some
10:14
Speaker 2: sort of strings. There's balance caps and things like that
10:17
Speaker 2: to navigate. But you can get that kind of ongoing
10:21
Speaker 2: rate that's above four and a half percent. Now, if
10:23
Speaker 2: you're willing to jump through the hoops, right, you can
10:26
Speaker 2: get a rate, an ongoing savings rate as high as
10:29
Speaker 2: five point four percent, but you will need to meet
10:33
Speaker 2: certain monthly terms and additions. There's balance caps involved and
10:36
Speaker 2: all the rest of it. And then the highest ongoing
10:39
Speaker 2: savings rate in the land, which this will probably flow
10:42
Speaker 2: you a little bit because you're not expecting me to
10:43
Speaker 2: tell you who it's from. Five point five percent is
10:47
Speaker 2: from Westpac.
10:48
Speaker 1: But of course there expect that.
10:50
Speaker 3: No, you didn't expect that.
10:51
Speaker 2: But there's again yet another caveat, which is it's only
10:55
Speaker 2: four people aged eighteen to thirty four years old.
10:58
Speaker 3: You can see how they're going after that young.
11:00
Speaker 1: Al clever, clever. Okay, well, look, you know, I mean
11:05
Speaker 1: it's a market fair enough. I don't mind that as
11:08
Speaker 1: long as everyone's transparent and understands what's going on, which
11:11
Speaker 1: is the case.
11:12
Speaker 2: Yeah, not a bad rate if you can meet all
11:14
Speaker 2: the terms of additions to achieve it.
11:17
Speaker 1: Yeah, okay, fair enough. On the other side, then they
11:19
Speaker 1: buy them active, particularly in property, and I have loans
11:23
Speaker 1: out there can be split into mortgage and investor investor lending.
11:27
Speaker 1: What's a good mortgage rate at the moment I must
11:29
Speaker 1: feasibly expect.
11:30
Speaker 2: Okay, so you're a own occupy track for a word
11:33
Speaker 2: of paying down your debt, your average rate for a
11:36
Speaker 2: variable customer is sitting at six point one percent. That's
11:39
Speaker 2: our estimates of RBA data. Knowing that all the magasine
11:43
Speaker 2: just passed on that rose color rate hikesking for but
11:47
Speaker 2: you can still get, you know, relatively competitive rates. I
11:51
Speaker 2: think on our database we've got and we estimate there's
11:55
Speaker 2: forty or so lenders offering at least one variable rate
11:59
Speaker 2: under five point seven five percent, and then one or
12:04
Speaker 2: two lenders its offering rates below five point five percent.
12:09
Speaker 2: So basically five point five percent is kind of your
12:13
Speaker 2: lowest thereabouts. But you can get a good smattering of
12:16
Speaker 2: lenders offering competitive rates at five point seven five percent
12:20
Speaker 2: or below. So that's a really good target for anyone
12:23
Speaker 2: who's an owner occupier. Yes, there's always terms in additions,
12:27
Speaker 2: and you know, you tend to need to have a
12:29
Speaker 2: decent amount of equity up your sleeve. But if you've
12:31
Speaker 2: owned your property for a few years even and property
12:35
Speaker 2: prices have grown in your area, you're likely to find
12:38
Speaker 2: that you're eligible for those high deposit loans. Particularly is
12:42
Speaker 2: a refinancer. Now on the investor side, it's a little
12:46
Speaker 2: bit higher, but not too much. The average rate we
12:48
Speaker 2: estimate to be six point two four percent, so it's
12:52
Speaker 2: what twenty three basis points.
12:54
Speaker 1: The gap isn't as high as I might have expected.
12:56
Speaker 2: Yeah, no, yeah, A competitive rate is setting about five
13:00
Speaker 2: point eight five percent or thereabouts. The lowest one on
13:04
Speaker 2: the can Started database at this present time is five
13:08
Speaker 2: point six zero percent, so really really very competitive. That's
13:13
Speaker 2: for principle and insurance payments though, and then the lowest
13:16
Speaker 2: investor interest only rates are sitting a little bit higher
13:19
Speaker 2: at about five point nine percent or thereabouts.
13:22
Speaker 1: And who was the lowest one from We might as
13:25
Speaker 1: well say here, what is it?
13:25
Speaker 2: Yeah, so Laboratories Credit Union is the lowest investor rate
13:29
Speaker 2: on our database at this point in time, or LCU.
13:32
Speaker 2: So not a credit union that many people have heard of.
13:35
Speaker 2: If any of your listeners. You are having to shop
13:39
Speaker 2: around to let among lenders that you might not have
13:42
Speaker 2: heard the names of, but it's worth having a look,
13:46
Speaker 2: giving them a call, testing out you know, their call center,
13:50
Speaker 2: understanding some reviews online.
13:52
Speaker 3: A lot of these credit unions, a lot of these
13:54
Speaker 3: low non bake lenders, low cost lenders.
13:57
Speaker 2: They've been operating in the market for sometimes sticks, so
14:00
Speaker 2: it is worth just understanding whether it's a good fit
14:05
Speaker 2: for your finances. But if you inherently don't feel comfortable
14:09
Speaker 2: moving your mortgage to a bank that you haven't don't
14:12
Speaker 2: know the name of, haven't heard of them before, know
14:15
Speaker 2: that you can still shop around amongst the major banks
14:19
Speaker 2: and amongst the second tier banks. They're still pretty competitive
14:22
Speaker 2: in this market, particularly if they think you're a flight risk,
14:26
Speaker 2: because they're very competitive amongst each other. They think that
14:29
Speaker 2: you're going to move to one of their competitors, that's
14:33
Speaker 2: when they really start listening.
14:35
Speaker 1: That's when they start listening. Interesting and also, folks, I mean,
14:37
Speaker 1: when Zadi was saying that the surprise was Westpact, the
14:39
Speaker 1: surprise was that if you remember when we were talking
14:42
Speaker 1: about who was actually paying good rates on cash, it
14:45
Speaker 1: was cash, wasn't it Sally that we were talking about
14:46
Speaker 1: with Westpac. Yeah, the surprise was not that it was
14:49
Speaker 1: west Back as such, but that it wasn't a bank
14:51
Speaker 1: you never heard of. Because often the best rates, that
14:54
Speaker 1: is cash rereats or the best mortgage es being the
14:57
Speaker 1: lowest mortgagories are often from quite small players, and that's
15:00
Speaker 1: just the way it goes in the market. So I
15:02
Speaker 1: think what Sally is addressing is just be careful. If
15:05
Speaker 1: it's this moment when you've never heard of, that's one thing,
15:08
Speaker 1: But if it's there for years and it's clearly established,
15:11
Speaker 1: then it's perfectly reasonable to look at it. If it's
15:14
Speaker 1: a bank, then it's got a government guarantee obviously, if
15:17
Speaker 1: it's an approved the posit taking institution, and similarly, if
15:21
Speaker 1: you're borrowing from them, while you're borrowing from them, if
15:24
Speaker 1: they get into trouble, it's their issue, So that's worth
15:26
Speaker 1: keeping in mind. But if it's some relatively obscure bank
15:30
Speaker 1: or credit union and it's just a once off and
15:33
Speaker 1: they just happen to throw this crazy rate out there
15:35
Speaker 1: once in a blue moon, then it's a very different issue.
15:39
Speaker 1: I would think, all right, very good, I've got some
15:41
Speaker 1: really good questions I want to ask Sally, so stay
15:44
Speaker 1: with us. We'll be back in one moment. Hello, Welcome
15:52
Speaker 1: back to The Australian's Money Puzzle podcast. James Kirkby talking
15:55
Speaker 1: to Sally Tindle of the cant Style group. I hope
15:58
Speaker 1: you found that useful, folks, I do this fairly. What
16:01
Speaker 1: would you say episodically on the show that we look
16:05
Speaker 1: at rates and we look at what you can get
16:08
Speaker 1: for your cash and what you can get for your
16:11
Speaker 1: lending or you're borrowing. It's really worth doing because they
16:14
Speaker 1: move around at such a rate these days. It makes
16:17
Speaker 1: such a difference, particularly in an environment where rates are rising.
16:21
Speaker 1: That's why I did it on the show today in particular,
16:23
Speaker 1: and I think we will see more so will become
16:25
Speaker 1: much more important. And you know, it just makes sense.
16:28
Speaker 1: You will be better off on either side if you
16:30
Speaker 1: get a better cash rate or a better borrowing rate.
16:33
Speaker 1: All right, first question is from Carl. I was having
16:36
Speaker 1: a discussion the other night about inflation and interest rates
16:40
Speaker 1: and I wanted to sanity check my thinking. My view
16:44
Speaker 1: was inflationary pressures were already building before the recent escalation
16:48
Speaker 1: of events in Iran, and markets had largely priced in
16:52
Speaker 1: around three rate rises this year. There you are, I
16:54
Speaker 1: see since then it seems that expectations have shifted slightly.
16:57
Speaker 1: My question is what is the action impact of that
17:01
Speaker 1: conflict on the economy. Well, going back Sally to the
17:05
Speaker 1: very start opening remarks she made on the show, you
17:08
Speaker 1: mentioned that, and you mentioned the sort of inflation expectations
17:12
Speaker 1: and interest rate that the RBA had been struggling to
17:15
Speaker 1: put the genie back in the bottle. The tooth based
17:17
Speaker 1: back in the tube on inflation anyway, and this so
17:22
Speaker 1: what happens now the oil spike, what does it do
17:25
Speaker 1: to that scenario?
17:28
Speaker 2: Well, this is where the RBA is having these tough
17:31
Speaker 2: conversations because it's not the path is not clear for
17:34
Speaker 2: the central Bank. They were getting close to getting the
17:38
Speaker 2: genie back into the bottle, and the decisions were getting tougher.
17:41
Speaker 2: Back in twenty twenty two when they first decided to
17:44
Speaker 2: hide the cash road from what zero point one zero
17:47
Speaker 2: was at.
17:48
Speaker 3: The decisions in front of the RBA were very easy
17:51
Speaker 3: to make.
17:51
Speaker 2: It was clear they needed to get that cash right
17:53
Speaker 2: up to get you know, people to stop spending, to
17:55
Speaker 2: bring inflation down. Now that we're at the point end
17:59
Speaker 2: of business, or we were before the conflict in the
18:02
Speaker 2: Middle East, the decisions are getting a lot more difficult
18:05
Speaker 2: for the RBA. And it hadn't resulted in a couple
18:07
Speaker 2: of u turns from the RBA, right because they had
18:09
Speaker 2: cut the cash rate last year three times and then
18:11
Speaker 2: reverted back to great hikes because of the toothpaste in
18:14
Speaker 2: the cheer, which I'm going to use that reference from
18:16
Speaker 2: here on in.
18:17
Speaker 3: It's fantastic, But this conflict in Iran has made.
18:20
Speaker 2: It even more problematic because it's, you know, the obvious
18:24
Speaker 2: choice for the RBA, who really has one primary leaver,
18:27
Speaker 2: it's the cash rate. They can go up, they can
18:29
Speaker 2: go down, but that's broadly their primary tool. The decision
18:33
Speaker 2: from the RBA to hike the cash rate, that's what
18:36
Speaker 2: they've clearly decided to do. And the march rate hight
18:38
Speaker 2: that was after the conflict had broken out. That then,
18:41
Speaker 2: you know, puts pressure on households and stops suspending. But
18:45
Speaker 2: what does that do to the economy, As the reader
18:47
Speaker 2: car points out, you know, is this going to result
18:50
Speaker 2: in you know, stagflation where we've got you know, the
18:54
Speaker 2: economy tanking, but unemployment on the rise and inflation on
18:58
Speaker 2: the rise.
18:59
Speaker 3: That would be a very adverse outcome.
19:02
Speaker 1: That's your nineteen seventies nightmare, isn't it. Yeah.
19:05
Speaker 2: Absolutely, And so the cash raise hikes, well, I think
19:09
Speaker 2: everyone thinks they're now given. I don't know that they are,
19:13
Speaker 2: because the RBA should be having from very tough conversations
19:16
Speaker 2: around the table about how much pressure is too much
19:19
Speaker 2: pressure for Australian households who are already under pressure because
19:23
Speaker 2: of petrol prices and because of diesel prices in particular,
19:27
Speaker 2: who are already under pressure and set to be under
19:30
Speaker 2: more pressure because groceries are starting to rise, because the
19:33
Speaker 2: cost of anything that moves is starting to rise as
19:36
Speaker 2: that fuel levee starts getting passed on from business business
19:39
Speaker 2: to customer.
19:40
Speaker 1: Through the system. Yeah, building materials especially, et cetera.
19:43
Speaker 3: Yeah, exactly.
19:44
Speaker 2: And you only have to look to the last meeting
19:46
Speaker 2: where it was a split decision six to three about
19:51
Speaker 2: you know, they were finally having a robust discussion around
19:54
Speaker 2: that board table at the Central Bank, and they did
19:57
Speaker 2: come out at the end and Governor Bullock did say
20:00
Speaker 2: it wasn't a matter of if we were going to
20:02
Speaker 2: hype the cash rate better, matter of when Apparently that's
20:04
Speaker 2: what the discussion really was about the robust debate. But
20:07
Speaker 2: I do think deep down their RBA, well not even
20:10
Speaker 2: deep down. I think that the RBA is watching the
20:13
Speaker 2: economy like a hawk, watching.
20:15
Speaker 3: Consumer and business confidence like a hawk.
20:17
Speaker 2: I do think that we're about to get inflation data
20:19
Speaker 2: the next round, coming through a couple of other things.
20:22
Speaker 2: I think all of those figures are a little bit outdated.
20:24
Speaker 2: For the RBA's next meeting. They've got to be looking at,
20:27
Speaker 2: you know, far more current data points in order to
20:31
Speaker 2: answer the question about whether they hype the cash rate
20:33
Speaker 2: yet again at the main meeting.
20:36
Speaker 1: Okay, so that's the dilemma for them, the difference between
20:40
Speaker 1: the sort of theoretical or rational challenge of inflation and
20:44
Speaker 1: the sort of empathy that they would need with events
20:49
Speaker 1: on the street if you like the fact that people
20:51
Speaker 1: are queuing for petro, the fact that people are using
20:53
Speaker 1: their cars, et cetera. Okay, very good. I hope that
20:55
Speaker 1: was useful to you, Carl. None of this is advice
20:58
Speaker 1: information only one last question from Rosemary or osm or Ie.
21:04
Speaker 1: I'd like to hear you with thoughts on the economics
21:06
Speaker 1: of the NDIS that is across the National Disability Scheme,
21:11
Speaker 1: which is well if it keeps going the way, it's
21:13
Speaker 1: going to cost more than the defense budget. And there
21:17
Speaker 1: has been earnest efforts to rein it in particularly by
21:21
Speaker 1: Bill Shorten, any sort of last phase as a politician.
21:27
Speaker 1: In partly there seems to be the spectacular stories of
21:30
Speaker 1: abuse inside the system, of people building virtual empires, business
21:34
Speaker 1: empires inside in the system with very poor checks and balances,
21:38
Speaker 1: and there are mini scandals breaking out all the time.
21:40
Speaker 1: I'm sorry to go off track here. I've finished Rosemary's question,
21:43
Speaker 1: but I'm putting this. I'm framing her question to see
21:46
Speaker 1: what Sally has to say. So Rosemary says, we keep
21:49
Speaker 1: hearing the NDIS is too expensive. But if it's supporting
21:52
Speaker 1: people to work and participate in the community, shouldn't we
21:55
Speaker 1: be looking at the return on investment. If it's contributing
21:58
Speaker 1: to higher workforce participation and more taxable income, is there
22:03
Speaker 1: a risk that cutting it could make the economy worse?
22:06
Speaker 1: There's one hell of a question, Rosemary. Thank you, the
22:09
Speaker 1: sad tendle off you go, you've read what are you
22:13
Speaker 1: going to say?
22:14
Speaker 2: Okay, Well, the government's made it very clear that it,
22:17
Speaker 2: you know, the scheme is not entirely on the chopping
22:20
Speaker 2: block in the upcoming budget, but it is going to
22:23
Speaker 2: get a haircut because it is the costs of it
22:25
Speaker 2: spiraling out of control.
22:27
Speaker 3: At this point in time, it's not sustainable.
22:29
Speaker 2: So it'll be interesting to see exactly how they ought
22:32
Speaker 2: to rain it in clearing up some of the I
22:36
Speaker 2: think what people would call rots in the system is
22:38
Speaker 2: of you know, is an obvious step, but I think
22:40
Speaker 2: that they'll probably need to do more tiding up to that. Yes,
22:45
Speaker 2: it does help support jobs and it helps support people
22:50
Speaker 2: with disabilities, is such an important scheme, but also the
22:54
Speaker 2: significant cost of it.
22:56
Speaker 3: Equally can also add to inflation.
23:00
Speaker 2: And so the government again is walking a very fine
23:02
Speaker 2: line here about, you know, making sure people get the
23:05
Speaker 2: support that they need, making sure.
23:07
Speaker 3: That the money goes to the people that need it
23:09
Speaker 3: the most.
23:10
Speaker 2: And making sure that you know, yes, it does help
23:13
Speaker 2: people in really important jobs in our society, but equally
23:17
Speaker 2: that they're not overspending, they're not going to get accused
23:20
Speaker 2: of adding to the inflationary pressures. And that's that very
23:24
Speaker 2: fine line that we're seeing, right.
23:25
Speaker 1: Okay, So that's the sort of flash point of it,
23:27
Speaker 1: the inflationary pressure of it, I suppose suggest it's sort
23:30
Speaker 1: of ruling cost. That's interesting, and tell me what do
23:33
Speaker 1: you think of the notion should be means tested. Albanezi
23:36
Speaker 1: Prime Minister has said he doesn't see that coming, but
23:40
Speaker 1: I would have thought that would have been a very efficient,
23:42
Speaker 1: if tough way to reform it.
23:46
Speaker 3: I think the.
23:46
Speaker 2: Problem is that you know, it doesn't matter what your
23:50
Speaker 2: income is, how much money you know you have in
23:53
Speaker 2: your family unit. You know a disability is a disability,
23:55
Speaker 2: and you know it's unfair from the outsets, so I
23:58
Speaker 2: can see their hesitation means tested. It could be that
24:03
Speaker 2: there's an element of means testing in there where you know,
24:07
Speaker 2: and we see this in things like the childcare subsidy
24:10
Speaker 2: where you can claim for the childcare subsidy up to
24:14
Speaker 2: a household income of and I can't remember this, I'm
24:17
Speaker 2: going to go on the top of my head, but something.
24:18
Speaker 3: Like that, it's a really high right by proxy?
24:22
Speaker 1: Does a proxy? Does a proxy means test in there?
24:26
Speaker 3: There is?
24:27
Speaker 2: So it might be that you could introduce some elements
24:30
Speaker 2: of that, but I don't know that adheres to the
24:33
Speaker 2: principles that the Labor Party carry of fairness. And I
24:37
Speaker 2: think that's the problem with means testing. It's not fair
24:41
Speaker 2: in that regard. Mind you, the Labor Party is a
24:44
Speaker 2: party that employs a large number of means tests and
24:48
Speaker 2: there's been very successful at doing so. And you know,
24:52
Speaker 2: this budget maybe ndis aside. You know, if any relief
24:56
Speaker 2: is getting handed out, it really needs to be means
24:59
Speaker 2: tested on the NDIS I'm talking about, because if we're
25:04
Speaker 2: we're doing cash handouts right, we're seeing in you know,
25:07
Speaker 2: pre election budgets, you're handing over cash to people that
25:11
Speaker 2: don't need it, that are just going to add it
25:13
Speaker 2: into their giant savings buffers and keep spending in the
25:16
Speaker 2: economy and again is back to those inflationary pressures.
25:19
Speaker 1: That was really good. Thank you Sally for rolling around
25:22
Speaker 1: with us on a variety of subjects, both precise and
25:26
Speaker 1: imprecise and very good. As always, say thank you very much,
25:29
Speaker 1: Sally Tinder, their data insights director at Canstar Attacks.
25:33
Speaker 3: Sally, thank you for having me, James, and thank you folks.
25:36
Speaker 1: I hope that was interesting. We are going to have
25:38
Speaker 1: a look at private credit later in the week, and
25:42
Speaker 1: it's about time we had a good heart look at
25:44
Speaker 1: it because it is really starting to become an issue
25:48
Speaker 1: in the markets, which you should be aware of okay,
25:52
Speaker 1: let's have some correspondents the money puzzle at the Australian
25:56
Speaker 1: dot com dot au. Take a look at the videos
25:58
Speaker 1: on YouTube and we will be back to you shortly