Australian (ASX) Stock Market Forum

Inflation

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over9k said:
View attachment 177762

I am literally betting on it.
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well maybe my memory is a little bit fuzzy , but this time inflation ( if it has been tamed ) has been a bit of a whiny kitten

in the '70s/'80s it was a persistent mongrel , so much so Paul Keating concocted a compulsory saving scheme ( Super ) so the wage rises didn't all get sucked into higher spending , and all that with data that was a lot less 'massaged ' than it is today

but let's see what happens next , we seem to be heading into a very large war ( or civil unrest in several developed nations )
 
On the street, it feels like inflation is receding. young families with mortgages have tightened their belts, they are spending less on luxury items and services, less weekend trips away, and less spending on maintenance items for home and car.

Small to medium businesses in the service sector have started to drop their pricing because their booking numbers are dropping, and staff are doing less. It won't be long before we see those businesses reducing the hours of their workforce.

The biggest contributor to inflation, at the moment are energy costs which are ridiculous. Inefficient Government taxes like Stamp duty and payroll taxes. Local government rates on housing.

The pain is coming.
 
JohnDe said:
On the street, it feels like inflation is receding. young families with mortgages have tightened their belts, they are spending less on luxury items and services, less weekend trips away, and less spending on maintenance items for home and car.

Small to medium businesses in the service sector have started to drop their pricing because their booking numbers are dropping, and staff are doing less. It won't be long before we see those businesses reducing the hours of their workforce.

The biggest contributor to inflation, at the moment are energy costs which are ridiculous. Inefficient Government taxes like Stamp duty and payroll taxes. Local government rates on housing.

The pain is coming.
Click to expand...

Inefficient taxes and wasted tax dollars contribute to high inflation. Improved productivity improves inflation and wealth.

“Take stamp duty, a tax on people moving, or payroll tax, a tax on job creation. States are concerned if they remove or replace one of these, that the GST formula could punish them with less federal GST revenue.​
​
“Victoria’s rising debt levels should serve as a warning to us all states should not be bailed out of trouble, instead they should be rewarded for productive success,” he said.​
​
“Competition is about performance, and we need better performance at all levels of government. Because improved performance will support middle Australia with more homes, more jobs, more opportunity, and more hope.”​

Reform GST to abolish stamp duty​

Rules for carving up the GST should be overhauled to encourage the states to fix inefficient and unproductive stamp duty rules, newly elected Liberal MP Simon Kennedy says.

In his maiden speech to parliament on Tuesday night, the member for the Sydney seat of Cook said state governments were concerned stamp duty and payroll tax changes would cause them to lose out on goods and services tax revenue from the federal government.

Describing the situation as a handbrake on productivity, Mr Kennedy said sensible reforms would strengthen the national economy and help promote badly needed housing construction.

“Currently, in Australia, states are concerned they are disincentivised from improving productivity,” he said.

“Take stamp duty, a tax on people moving, or payroll tax, a tax on job creation. States are concerned if they remove or replace one of these, that the GST formula could punish them with less federal GST revenue.

“How can we better incentivise states to implement productive reform? Ensuring the Grants Commission will fund, not punish, the states for productive reforms must be part of the answer.

“How can we better incentivise states to build homes? I believe we should force the states and regions to compete for federal infrastructure funding based on housing completions.”

A co-founder of consulting firm McKinsey & Co’s Australian public sector business, Mr Kennedy won the seat of Cook in April, replacing former prime minister Scott Morrison.

The electorate takes in suburbs of Sydney’s Sutherland Shire including Sandringham, San Souci, Caringbah, Cronulla and Lilli Pilli. It has been a blue ribbon Liberal seat since 1975.

He warned small business and individuals were being made to feel small by business and government.

“Because large governments and corporations have never been larger,” he said.

“Large governments and large corporates share similar characteristics. They both believe their size gives them the power and moral authority to tell individuals and families how or what to think.”

Deteriorating state budgets​

Describing himself as “a product of middle Australia”, the father of two met his wife Nila while working in Washington.

Mr Kennedy used the speech to warn against deterioration of state budgets.

“Victoria’s rising debt levels should serve as a warning to us all states should not be bailed out of trouble, instead they should be rewarded for productive success,” he said.

“Competition is about performance, and we need better performance at all levels of government. Because improved performance will support middle Australia with more homes, more jobs, more opportunity, and more hope.”


Treasurer Jim Chalmers has ruled out sweeping tax reform or any changes to how GST revenue is carved up by the Commonwealth Grants Commission.

Mr Kennedy said Australia needed more home construction, including to house people arriving as part of record post-pandemic migration. He said the median house price in parts of his electorate was more than $3 million.

“We are at risk of letting down middle Australia on housing. The rhetoric of governments around Australia has been to scream about a housing affordability crisis, which is one that is largely of their own making,” he said.

“Today, in Sydney, up to 50 per cent of the cost of a new house is government – that’s tax, red tape and the planning process. How ridiculous is this?”

He called for the states and territories to compete for federal grant funding based on the release of land for new housing construction.

Mr Kennedy also singled out lacklustre productivity in the economy as an urgent challenge.

“Productivity has been responsible for 80 per cent of the increase in the average Australian’s living standards over the past 30 years,” he said.

“The average American worker produces 25 per cent more than the average Australian. But this is not the fault of the Australian worker.

“This is because successive governments have kicked the ball into the long grass when it comes to unleashing productivity.”
Click to expand...
 
JohnDe said:
Inefficient taxes and wasted tax dollars contribute to high inflation. Improved productivity improves inflation and wealth.

“Take stamp duty, a tax on people moving, or payroll tax, a tax on job creation. States are concerned if they remove or replace one of these, that the GST formula could punish them with less federal GST revenue.​
​
“Victoria’s rising debt levels should serve as a warning to us all states should not be bailed out of trouble, instead they should be rewarded for productive success,” he said.​
​
“Competition is about performance, and we need better performance at all levels of government. Because improved performance will support middle Australia with more homes, more jobs, more opportunity, and more hope.”​
Click to expand...
@JohnDe I don't think that Governments of whatever persuasion will give up easily these two cash cows.
Not in a hurry anyway.
Look at how long the banking taxes were left before they were removed.
 
farmerge said:
@JohnDe I don't think that Governments of whatever persuasion will give up easily these two cash cows.
Not in a hurry anyway.
Look at how long the banking taxes were left before they were removed.
Click to expand...
Several State taxes were meant to be removed when the GST was introduced, they still haven't been removed, so as you say @farmerge it is highly unlikely.
 
sptrawler said:
Several State taxes were meant to be removed when the GST was introduced, they still haven't been removed, so as you say @farmerge it is highly unlikely.
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@sptrawler I think that the best of the best is the Recording Fee that is on our WA vehicle registration paperwork.
This was inflicted upon us prior to the Commonwealth Games here in Perth in 1962 to help or pay for the staging of these games.
It was only supposed to be for the duration of a couple of years.
Hah, pigs will fly before this is removed.
Not so bad if only 1 vehicle is involved.
I have a car, ute, trucks, tractors and trailers.
Starts to add up
 
I wonder if the RBA boss has the nerve to put up interest rates, the last Governor didn't fare so well, by being brave.

www.abc.net.au

RBA should now 'in theory' hike interest rates in June, but will it?

Inflation is rising again, and that's a problem for both the government and the Reserve Bank, writes David Taylor.
www.abc.net.au www.abc.net.au
From the article:
Inflation is rising again, and that's a problem for both the government and the Reserve Bank.

It's rising because some once heavily discounted items in the shops, former Treasury economist Warren Hogan says, aren't being so heavily discounted any more.

"One of the reason inflation's fallen in the past year is because goods prices have been coming off and, in fact falling in recent times."

"They've [now] jumped right back up."

Bread and cereal products, for example, rose 5.1 per cent in the year to April.

And fruit and vegetables rose 3.5 per cent.
At the same time, says Warren Hogan, the cost of services -- including rents, healthcare, banking and insurance, and education, remain elevated.

"So we're no longer talking about inflation that's falling back towards target."

"It's questionable whether it's even sticky.

"It looks like it could be picking up in 2024," Warren Hogan says.
It's important to note that the Bureau of Statistics' monthly inflation data is known to be a little bumpy.

However, crucially, the core, or underlying, measures of inflation published Wednesday also show inflation is not just stalling but picking up again.

The trimmed mean measure, for example, which looks at inflation without or the ups and downs, rose from 4.0 per cent to 4.1 per cent over the 12 months to April.

There's no doubt shoppers have tightened their purse strings.

It's clear, however, there's still plenty of money being pumped into the economy and this is lifting what economist and the Reserve Bank call "aggregate" or overall demand.

"The reality is there's a huge amount of investment spending going on: infrastructure boom outside of mining and across the easter seaboard; the need to build new dwellings."

"Demand in the economy, overall, is too strong.

"At the moment consumers are the ones copping all the pressure from the income tax burden, from interest rates going up, inflation, consumption is soft, but everything else is doing OK," Warren Hogan says.

Perhaps this comment from senior Marcus Today markets analysts, Henry Jennings, provides some sort of synthesises for the interest rate debate.

"The interest rates will stay where they are for a long while yet," he noted.

"In theory, rates should rise, but anyone who has stepped out from Martin Place into the real world will know that many are doing it really tough.

"A rate increase would be 'courageous Minister' as Sir Humphrey would say.

"Not going to happen."

The Australian stock market fell sharply immediately following the release of the inflation data as investors pushed back their expectations of an RBA interest rate cut in 2024.
 
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The U.S debt auction the other day was absolutely abysmal too.

2456245762456724576.jpg

As you can see, we are right back on trend.

Meanwhile:

34563457634576.jpg3737375635673567.jpg

A lot of retail companies report earnings this week so salesforce's numbers are a hell of a canary in the coalmine.

For those who don't know, salesforce is basically a business that helps businesses sell their products online. Clothes, car parts, makeup etc.

So if their numbers are down then the consumer isn't spending money. Now don't get me wrong, seasonality has a lot to do with this, but the year-on-year numbers are still atrocious.

So inflation data continues to come in worse than expected despite the fact that spending isn't still red hot like it was post-covid.

That should tell everybody something ;)
 
4325632457324724574257.jpg

Remember when I was explaining how the rest of the world is going to be dealing with problems that the americans are almost entirely insulated from/unaffected by?
 
Jeda said:
No don't remember. give us a clue :wheniwasaboy:
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well the US has heavily sanctioned Russia and in the process of increasing sanctions on China so a growing Russian economy is less likely to trigger increased inflation in the US , and China is buying more and more gold ( silver and copper ) so is less likely to drive US treasury yields down , thus helping insulate the US from currency shocks
 

Danger! Inflation Traffic Accident Dead Ahead!​


Danger! Inflation Traffic Accident Dead Ahead!

The latest monthly data on inflation from the ABS which came out today reported Annual growth in the non-seasonally adjusted monthly CPI lifted from 3.5 per cent last month to 3.6 per cent, above market expectations, while seasonally adjusted CPI is even higher at 3.8 per cent, and annual...
invidious.privacyredirect.com invidious.privacyredirect.com
 

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