Latest / Best of Business / Murray Olds: Australian correspondent on economists criticising the Reserve Bank of Australia's approach to rates

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Murray Olds: Australian correspondent on economists criticising the Reserve Bank of Australia's approach to rates · Best of Business

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  Speaker 1: You're listening to a podcast from news Talks'd be follow
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  Speaker 2: If you know it, you know it, and if you
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  Speaker 2: know it, you love it. An American fan of Bluey
• 0:26
  Speaker 2: has only this week learned why the Healer family are
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  Speaker 2: all wearing paper crowns in the season two episode Christmas Swim.
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  Speaker 2: So while the crowns being worn at Christmas time are
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  Speaker 2: clearly recognizable to us and to Ozzie viewers as the
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  Speaker 2: silly hats that we all reluctantly wear over Christmas, it
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  Speaker 2: turns out that Christmas crackers aren't really a thing in America.
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  Speaker 2: And did you know that Ozzie's sometimes refer to Christmas
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  Speaker 2: crackers as bombonds. We're going to get Murray Olds to
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  Speaker 2: explain that the man, the myth, the legend is with us. Now,
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  Speaker 2: you don't call them bombonds, do you marry mate?
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  Speaker 3: I think I have heard them called bonbonds, Jack. But
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  Speaker 3: a bon bond can also be a small piece of
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  Speaker 3: con lectionary cards. Yeah, I think it's probably more where
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  Speaker 3: my linguistic kind of leanings would would would head in
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  Speaker 3: terms of a sweetie. I think a bond bond I mean,
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  Speaker 3: a cracker is a cracker.
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  Speaker 2: Right, But a bond bond sweet is also wrapped in
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  Speaker 2: the kind of style of a Christmas cracker, isn't it.
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  Speaker 3: It's true, that is true.
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  Speaker 2: So I wonder if it's got something to do with
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  Speaker 2: the kind of you know, the style of the two
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  Speaker 2: ends outstanding. Well, these are the issues that matter, clearly, Hey,
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  Speaker 2: this is this is something else our great nations have
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  Speaker 2: in common. Your reserve bank, your central bank, is compon
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  Speaker 2: criticism for getting it wrong again.
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  Speaker 3: Well, that's what a lot of economists are saying. The
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  Speaker 3: Australian cash right four point three five percent. It's been
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  Speaker 3: that way for if I said eighteen months, it must
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  Speaker 3: be nudging up towards two years. So four point three
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  Speaker 3: five percent, and people are squealing and screaming and debate
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  Speaker 3: about the extent to which australia Is Reserve Bank is
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  Speaker 3: hanging on to that to those settings is now ramping
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  Speaker 3: up because the nine newspapers has the story. A number
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  Speaker 3: of economists doesn't. They call it the dismal science economists,
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  Speaker 3: some of them believe the bank is getting it wrong
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  Speaker 3: by fixating on an unemployment rate of four and a
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  Speaker 3: half percent. That's where the Bank has already said it
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  Speaker 3: wants unemployment to be to take some of the heat
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  Speaker 3: out of the economy. Well, these economists say, hang on
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  Speaker 3: a second, that's you know, you don't have to go
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  Speaker 3: that deep. It could be four and a quarter percent.
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  Speaker 3: I mean, right now, what's the employment rate? Let me
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  Speaker 3: just have a quick look at you there you go. Look,
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  Speaker 3: they want the inflation rate the Reserve Bank to be
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  Speaker 3: between two and three percent. The unemployment rate currently four
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  Speaker 3: point one percent. If you go to four point five percent,
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  Speaker 3: here's the note I was looking for. That means an
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  Speaker 3: extra seventy five thousand people out of work. And do
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  Speaker 3: you really want that? I mean, I'm not sure you
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  Speaker 3: want that. But here's the thing. The Reserve Bank does
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  Speaker 3: not want to take the foot off the break and
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  Speaker 3: let inflation get away again having gone through all this pain.
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  Speaker 3: That would be simply untenable. They could not do that,
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  Speaker 3: couldn't afflicted in the population. And I suggest Michelle Bullock
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  Speaker 3: might buy herself out of a job if that happens.
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  Speaker 3: So look at the balancing Act. And you've got e
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  Speaker 3: columnists saying one thing, you know, I mean, there's a
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  Speaker 3: lot of debate about this. Reserve Bank has got it.
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  Speaker 3: You know, Michelle Bullock is a very very strong Central
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  Speaker 3: Bank governor. She will take no rubbish from the government
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  Speaker 3: and she'll do it her way.
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  Speaker 2: So we are currently at four point two five percent
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  Speaker 2: as of Wednesday of last week. So I'm just comparing
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  Speaker 2: it and right, no, no, no for oursion cash. Right. Yeah,
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  Speaker 2: So a one year fixed period in Australia right now
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  Speaker 2: on four point three five with an LVR of sixty
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  Speaker 2: percent or less is about six point twenty nine according
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  Speaker 2: to NAB six point twenty nine for a year. Yeah,
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  Speaker 2: I think I think you get. I mean, you can
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  Speaker 2: definitely get cheaper one year rates than that in New
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  Speaker 2: Zealand at the moment. But I might be putting you
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  Speaker 2: on the spot. He murray. Is there a we have
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  Speaker 2: this think called the dual or we had this thing
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  Speaker 2: called the dual mandate for the Reserve Bank. Reserve Bank
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  Speaker 2: had to keep in mind interest rates. I had had
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  Speaker 2: to keep a mind inflation as well as unemployment. But
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  Speaker 2: is that is that an explicit requirement of Australia's Central Bank?
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  Speaker 1: Now?
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  Speaker 2: Mind?
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  Speaker 3: Yeah, I've not heard that phrase applied to the beautiful
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  Speaker 3: building in Martin Place in Sydney. But look they are
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  Speaker 3: watching both of those of those metrics, There's no doubt
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  Speaker 3: about it. They're watching unemployment and they are very well
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  Speaker 3: aware of inflation. Yeah, and the two are inextricably linked.
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  Speaker 3: So to the extent that you've got a name for yours.
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  Speaker 3: I'm not sure we've got a name for ours. Yeah,
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  Speaker 3: that's your bottom gone. They're both looking.
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  Speaker 2: We had we had, we had a dual mandate. This
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  Speaker 2: was the first thing, the very first thing this new
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  Speaker 2: government did was scraped the dual mandates. And they're no
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  Speaker 2: longer focusing on maximum employment. They're focusing on focusing on inflation.
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  Speaker 2: And inflation only tell us about the teens have been
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  Speaker 2: breaking into train cars.
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  Speaker 3: Look, this is a thing that's apparently been going on
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  Speaker 3: for some time, but it's I think it's got some
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  Speaker 3: recent publicity because one young fella just about god himself killed.
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  Speaker 3: He broke if he broke his league in five places,
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  Speaker 3: ribs smashed his head up. Because what's happening. These kids
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  Speaker 3: are getting onto moving trains, putting themselves in the end
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  Speaker 3: carriage and then breaking into the guards a compartment at
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  Speaker 3: the end of the moving train. Right, because trains can
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  Speaker 3: go either way northward, can go south, so they've broken
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  Speaker 3: into the unoccupied into the train and then, for reasons
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  Speaker 3: best now to themselves, these silly little buggers that start
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  Speaker 3: dangling from the outsides of the trains. Now they can
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  Speaker 3: also be caught riding on the couplings that link the carriages.
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  Speaker 3: And here's the stat last five years, twenty people killed
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  Speaker 3: and thirty six injured inside secure will allegedly secure rail corridors.
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  Speaker 3: It's called buffer riding. And never guess why they're doing it,
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  Speaker 3: but he's social media. They want to get Facebook likes
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  Speaker 3: or whatever the tik took, whatever the hell it is.
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  Speaker 3: So some bloken lapland can go, oh look at that
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  Speaker 3: crazy ozzies he splats himself against a pole.
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  Speaker 2: Yeah, yeah, that's a horrible an. Yeah that's crazy. And
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  Speaker 2: Woolworths shelves are empty thanks to a strike.
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  Speaker 3: Not entirely empty, and it's apparently worse than some spots
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  Speaker 3: rather than others. But here's the thing. There are distribution
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  Speaker 3: workers at Big Woolworth's centers three in Victoria, one in
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  Speaker 3: New South Wales. The main ones are down South. And
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  Speaker 3: here's the thing. The workers are picketing. They're on strike
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  Speaker 3: and they're picketing to stop management and other other workers
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  Speaker 3: getting in because they are demanding failing significant wage rises
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  Speaker 3: and much better conditions. Wilworth says it's too much, can't
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  Speaker 3: pay it. So while this is going on, you've got
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  Speaker 3: you know, if you're coming over hold they bring your
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  Speaker 3: own toilet paper because we're bringing short. Wulworth stores, bread, drinks,
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  Speaker 3: frozen foods also are being impacted. The United Workers Union says, well,
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  Speaker 3: we're tough teddies heading into Christmas pay up, but we're
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  Speaker 3: going to keep going. And you know there's no end
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  Speaker 3: in sight at the stage. But look, I think if
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  Speaker 3: a push comes to show, you're going to have you
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  Speaker 3: lab all the stuff on the store shows by Christmas.
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  Speaker 2: Yeah, I'm pleased to hear that that would be a
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  Speaker 2: real crisis. Thanks Murray, appreciate it as ever. Australia correspondent
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  Speaker 2: Murray Oldsy thank you for your feedback as well.
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