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Ryan Bridge: Our economy is still in the wilderness · Best of Business

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  Speaker 2: So we have a number inflation that is, which is
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  Speaker 2: better than not knowing. But it didn't do exactly what
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  Speaker 2: we wanted to do, which was to come down two
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  Speaker 2: point two percent for the year to December, no change
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  Speaker 2: from the quarter before it. And crucially, non tradable inflation
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  Speaker 2: that's the stuff that we should have more control over
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  Speaker 2: domestically was down slightly but still four and a half percent.
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  Speaker 2: Two problems here, one for us, one for the government.
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  Speaker 2: If the key we dollar keeps falling, the stuff that
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  Speaker 2: we buy from the rest of the world, think fuel
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  Speaker 2: and food will get more expensive. If that stuff gets
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  Speaker 2: more expensive, yep, that means you guessed it inflation. Add
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  Speaker 2: that to your sticky domestic number and you may start
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  Speaker 2: to have a problem. Suddenly the Reserve Bank gets the
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  Speaker 2: jitters and tie hose on rate cuts. Then we all
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  Speaker 2: get the jitters and pull back on spending, and then
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  Speaker 2: we're riding this seemingly never ending roller coaster that is
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  Speaker 2: the cost of living crisis. The gift from labour, it
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  Speaker 2: just keeps on giving. The other problem in these numbers
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  Speaker 2: is for the government. At the election, they promised, remember this,
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  Speaker 2: that rents would come down once they delivered the landlord
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  Speaker 2: interest deductibility relief. Now I agree with them doing that.
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  Speaker 2: It was mad that Labour took it away, but they
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  Speaker 2: were wrong to claim that it would bring rents down
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  Speaker 2: when rents are by and large dictated by supply and demand.
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  Speaker 2: How much the market is willing to pay for a
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  Speaker 2: three betty in Mountvick is what the market is willing
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  Speaker 2: to pay. Right, So, now eighty percent deductibility has kicked
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  Speaker 2: in and guess what. Rents are up four point two
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  Speaker 2: percent in yesterday's numbers, So not exactly what was promised
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  Speaker 2: by the government now, to be fair, they will be
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  Speaker 2: hoping that once the full landlord deduction kicks in and
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  Speaker 2: it's given more time, it may help. And it might,
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  Speaker 2: but at the margins it is not and won't be
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  Speaker 2: the main driver of slashing rents, and yesterday's numbers only
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  Speaker 2: proved that.
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