Continued: Part 2 of a 2 Part Report
The massive decrease in housing sales volumes has decimated State Government budgets as they lose hundreds of millions of dollars in would be stamp duty revenue. The flow on effect through to builders, other trades people, real estate agents and so many others throughout the economy is in the billions of dollars – so why the inflation obsession and the foresight of a child?.
For the last 5 years monetary policy and fiscal policy in Australia have been in conflict The RBA had been trying unsuccessfully to slow the economy by increasing interest rates to breaking point while the government led by Prime Minister John Howard was happily cutting taxes and increasing spending. This is a blatant example of the many problems of an independent central bank – I am not a huge fan of either model as both have major drawbacks – the topic is worth discussion.
The interest rate increases in February and March, which were undertaken in response to what looked like irresponsible election promises by Labor Prime Minister, Kevin Rudd were really the last straw as the Reserve Bank Directors continued to increase rates to fight their own war against the ever spending politicians, instead of looking ahead to the coming war against recession. In other words the Australian public was forgotten about – totally unacceptable and completely destructive. Should we still have an independent Central Bank? Certainly worth debating!
As this week unfolded – The Melbourne Cup which stopped the nation, the US Elections which stopped the world and bad economic news all round, no more thought was given as people escaped their problems, dressed up and went to the races in an attempt to forget the economic mess that is unfolding. Our Banks seem to be ok – but the RBA and its obsession with inflation over economic growth have made the situation difficult when it need not have been.
Yesterday (Tuesday) the daily barrage of doom and gloom outdid itself, with the actual release of statistics from the Australian Bureau of Statistics (ABS) – retail sales, performance of manufacturing index, job advertisements, house prices, inflation gauge – all down – A LOT!
We at Marquette Turner Luxury Homes see that our role is to lobby hard for change and to keep all of our clients, family and friends informed of every issue that may affect them. It just isn’t good enough to sit on the fence and play it safe.
A dear friend once said “to have no opinion is similar to having a lobotomy”.
FYI: read Part 2