The trouble with economic data such as the quarterly inflation report released on Wednesday is that by the time it lands it is often out of date. In this case the CPI data, which has prompted a flurry of speculation about an interest rate rise next Tuesday, and become the new battleground for an election the Coalition has hitherto been keen to fight on claims it is the superior economic manager, was for the quarter ending on March 31.
That was three days after a budget in which the government halved the fuel levy and announced a one-off $250 cost of living subsidy specifically targeted at people on Centrelink and Veterans Affairs payments and some concession card holders.
The 22 cent cut to the fuel levy started to flow through to the bowser in early April. World oil prices, which peaked at $119.40 a barrel on March 7 after war broke out in Ukraine, have dropped 3.44 per cent in the last month and 2.98 per cent in the last week. Oil was just over $100 a barrel on Thursday.
Given soaring fuel prices, and the flow on effect they have had on the rest of the economy, have been largely blamed for inflation jumping 2.1 per cent in the March quarter, that has to be good news one would think.
It is also why, even though the possibility the Reserve Bank will move to lift the cash rate from its historic low of 0.10 per cent is now greater than at anytime in more than a decade, it is not the absolute certainty many would have us believe.
Although headline inflation came in at 5.1 per cent for the quarter, underlying inflation, the RBA's preferred measure which excludes fuel, was 3.7 per cent. While almost three-quarters of a per cent above the bank's 2-to-3 per cent average inflation rate target, it has to be seen against the backdrop of the RBA's failure to move inflation up into that range for almost a decade.
It would not be out of the question for the RBA board to stay its hand on Tuesday in order to see what impact the excise cut and other factors have had.
So, while it is intriguing to speculate about the possible impact of a rate rise that may or may not happen during the campaign on the government's election prospects, all this sound and fury is cold comfort for the many low- and middle-income households already doing it tough for years as a result of COVID, insecure work, and wage stagnation.
These are the people who have been manning our nursing homes, stocking and staffing our supermarkets, selling us petrol, doing our landscaping and working in what has been an "off again, on again" hospitality sector. These are also the people living with a rental affordability crisis now compounded by a sudden spike in other costs of living and who will have to make hard choices between groceries and rent.
The $250 payment, while sure to be welcomed, is just a drop in the ocean which will soon be spent on essentials.
These are also the people who will, when the RBA does lift the cash rate, feel the most pain as landlords pass the additional cost on down the line.
One of the biggest unspoken crises in Australia today is the alarming growth in the divide between the haves and the have nots during COVID. The rich have got richer and the poor have got poorer.
Both the government and the opposition say the economy is the important thing. Both claim to be more competent to manage it than their opponents. The trouble is, as has often been said, we live in a society, not an economy.
If we measure the strength of the economy by its ability to deliver fair and proportionate financial outcomes for all then neither of the major parties has much to boast about.
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