Fiscal policy must belatedly step up to inflation fight
Australia’s treasurers could do more to help the Reserve Bank to navigate the narrow path to a soft landing and reduce the need for further interest rate increases.
Young parents with children in daycare, overflowing supermarket trolleys and lost hopes of being mortgage-free before their toddlers turn into 20-somethings are rightly miffed when they hear about the bluntness of monetary policy.
They understand that interest rates couldn’t stay low forever. Inflation is too high. But it’s difficult for them to digest higher and higher mortgage repayments, while policymakers fail to collectively defend them from yet another blunt whack. Equally, business can’t afford higher rates and tighter financial conditions.
