The spin just got shredded.
RBA Governor Michele Bullock hiked rates to 4.6%, a 15 year high, and then refused to play Albanese and Chalmers’ blame game.
She said it straight:
“Inflation is too high and has been driven by domestic capacity pressures, the inflation impulse from the Middle East conflict is in addition to this, domestic spending and investment have been stronger than expected”
Then the killer line:
“The bottom line is that productivity is doing nothing”
Labor’s entire script collapsed in one press conference.
Albanese spent the morning blaming Morrison, Frydenberg, Putin and Trump.
Chalmers said “Middle East” ten times in 20 minutes and claimed the RBA statement made it “abundantly clear” that international factors were the driver.
Bullock said the opposite.
Domestic demand is too hot, supply isn’t growing, productivity is dead and extra government spending is making it worse.
Handouts, tax cuts, free TAFE and bulk billing announcements are not an economic strategy.
They are demand stimulus in an economy that already has excess demand. That is why mortgage holders are copping another hike and why more could still come.
The time for talking points is over.
Cut the spending. Fix productivity.
Stop pretending wars overseas explain a homegrown mess.