Joe Hildebrand: The one thing that will save Australia from ruin

Australia is hurting as financial stress hits us at levels not seen in a generation or more. But there is one solution that could save us.

OPINION

The world famous Serenity Prayer has been invoked in times of desperation for almost a century.

It reads as follows: “God, grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

It is fair to say there is not much serenity in Australia at the moment and the reason why is because we are lacking that wisdom.

The nation is hurting. Mortgage stress, rental stress and an inability for millions of ordinary families to even put enough food on the table are all at levels not seen in a generation or more.

The Cup Day rate rise was a bludgeon to that pain. The fact that it came on a day that is supposed to be our most carefree national moment only made it more brutal.

But crueller still is that it is a blow we probably didn’t need to weather. As many commentators observed — including my more well-groomed doppelganger at The Daily Telegraph John Rolfe — the RBA’s drive to crush spending doesn’t actually address the primary cause of inflation.

A cost of living crisis is smashing Aussies. Picture: NCA NewsWire/Tertius Pickard

Already the vast majority of Australians have drastically cut spending because they simply have no choice.

Disturbingly, as the latest Foodbank report revealed, this included 3.7 million households who had to go without enough food over the previous 12 months in order to pay their rent or power bills.

Yet inflation went up more than expected due to international supply chain problems — still disrupted after all the Covid lockdowns and closures — and skyrocketing petrol prices due to the ongoing War in Ukraine fuelled by — although not literally, sadly — the ever-opportunistic price gougers of OPEC.

None of this the RBA can do anything about but rather than have the serenity to accept that, it has instead opted for courage.

In the early days of the rate rise cycle the Reserve Bank was rightly trying to flatten a post-Covid spending boom — another unforeseen consequence of excessive lockdowns and border closures — but that parrot is now well and truly dead.

However, out of a need to be seen doing something even if it is not really doing anything, the bank continues to thump the poor bird into the ground. Meanwhile the real driving causes of inflation carry on unmolested.

And so the RBA has gone from smashing a walnut with a sledgehammer to trying to jack a car door with a Rubik’s cube. The tool it is applying is no longer excessive, it is simply not fit for purpose.

Michele Bullock, governor of the Reserve Bank of Australia. Picture: Lisa Maree Williams/Bloomberg

So what can Australia do to solve a problem that we are all suffering from but whose cause is as far beyond our shores as it is beyond our control?

There is an obvious solution staring us in the face.

We need an Accord. As with the economic crisis of almost half a century ago that was dealt with by Bob Hawke, bringing government and business and unions to the table, we now need a new wages and prices Accord to fix this current mess.

If — as business groups are so fond of complaining — increased wages are fuelling inflation, then they need to put their money where their mouth is by showing some restraint of their own.

This is no utopian fantasy, it is a matter of history — it was done before and it worked.

And corporate Australia actually needs this desperately, whether it knows it or not.

After the recent PR implosions of giants such as Qantas and Optus — not to mention the big four banks clawing back ever-higher interest rates on existing loans — Australian big business, especially the biggest and busiest, need urgent salvation.

What better way to show they are as committed to Australians as their heartwarming ads suggest than to sit down with government and unions to bring down price rises by temporarily absorbing increased costs in exchange for greater productivity in the workforce and a temporary restraint in wage claims.

Recent profit results suggest many big retailers could easily afford to cop a few for the country and still end up happily in the black. And even if this meant they wouldn’t rake in quite as much for their shareholders as projected in the here and now, the long-term benefit to their brands would be outstanding.

Corporate Australia is still making huge profits. Picture: NCA NewsWire/Tertius Pickard

But most importantly, this should not and need not come at any detriment to workers — especially the lower paid.

On the contrary, as with the previous Accords, if price growth is kept roughly at the level of wage growth and the government steps in with targeted services and subsidies — as it has already started to do with childcare and energy bill relief — then workers should come out ahead.

Perhaps even more simply, Awards and Enterprise Bargaining Agreements — industry wide and company-wide pay deals — could be negotiated so that increases are back-end loaded and weighted in favour of lower grade employees, thus ensuring workers who gallantly submit to temporary restraint are still rewarded in the long term.

The only missing piece is a government figure — a cost-of-living commissioner or minister or tzar or whatever — who has rock solid pedigree with the business community as well as impeccable Labor credentials.

There is an obvious candidate but I won’t embarrass him here.

Far more important is the will. Anthony Albanese has been bruised by the shambolic Voice campaign and needs to find a way to channel the mainline of middle Australia amid disturbing polls showing blue collar voters are turning away from the ALP.

A new grand coalition of government, workers and business would be the perfect way to do this, smashing inflation and cementing his legacy at the same time.

A nation’s serenity is at stake.