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The problem with that graph is that CPI is no longer at 7% - it's now halved. Also wage negotiations don't stop - workers will naturally keep asking for more.
They want pay rises to continue, that it what resets the Government debt by inflating the tax take, the only downside is it inflates asset prices and devalues people's buying power.
Peoples wages have gone up 5%, but at the same time the cost of everything has gone up 20% and the cost of housing/rent more, so people feel they are poorer while being told they are better off.
The only other option is to have a recession, but that doesn't increase the tax take, but it does maintain the value of your money and stop the inflation of assets eg houses.
With bracket creep fuelling record tax collections, fresh data has revealed Australia’s personal income tax burden grew faster than any other advanced economy last year.
Australians’ personal income tax burden, already among the highest in the world, grew faster than any other advanced economy last year, as bracket creep fuelled record Commonwealth tax collections.
According to a fresh report published by the Organisation for Economic Co-Operation and Development (OECD) on Thursday evening, a single, average wage-earner without children paid approximately $24,791 in personal income taxes last year — up 7.6 per cent on 2022 levels.
In comparison, Luxembourg, which recorded the second-largest increase in personal average tax rate rose by just five per cent.
The reality is that the Government needed more money, there is only one way to increase it tax, unfortunately it just means a reset of the buying power the wage slave has.
People adapt, they are good at that, IMO the real problem is, it is making doing business in Australia a lot less competitive and the money is being taken from the productive side of the economy to bolster the non productive side.
If it was being used to improve the productive side, that would be fine, living standards would improve, but it isn't so where living standards settle is a work in progress IMO.
View attachment 181794If you're feeling too scared to spend money right now, some relief is on the way
While the cost of living crisis continues in Australia, there is some relief on its way from July.www.abc.net.au
Which is what the Government wants, as I said.The problem with that graph is that CPI is no longer at 7% - it's now halved. Also wage negotiations don't stop - workers will naturally keep asking for more.
.. let's call it 7% ( with multiple jobs ' )View attachment 181778
View attachment 181780View attachment 181779
Note the divergence right at the GFC? The private sector jobs market simply never recovered. Hence why the jobs market for grads has been so bad for (as a millennial) our entire adult lives (unless we studied something that employed us in the public sector, anything in healthcare for example).
60-80 years after a baby boom you have a healthcare boom.
And this private sector contraction-public sector (healthcare in particular) expansion divergence has gone into overdrive post-covid. Just look at the red vs blue at the end of the bar graph. When you consider the base effect that the private sector numbers will show once the vaccines are announced (i.e subtract the negative blue in covid from the positive blue in 2021-2022) you can see that net, private sector growth has gone nowhere since the end of 2019.
Comically, underemployment, which used to be an absolutely chronic problem, has actually improved, not because of any kind of actual macro level improvements in the jobs market, but because so many people are now working multiple jobs to make ends meet:
View attachment 181781
This trend (problem) is not going to improve. Inflation is going to continue to soar and the jobs market is going to continue to get worse and worse.
that doesn't work while there is underlying inflationJust stop the pay rises. Wage stagnation ala 2008-2020.
This is why they want inflation to run hot.We should also be paying attention to the near trillion dollar debt we have. What's the interest?
$61 million per day?
Also the high levels of immigration.This is why they want inflation to run hot.
Not sure what rate it was all borrowed at but 5% on a tril is 50 bil a year which is a bil a week which is just under 150 mil/day.We should also be paying attention to the near trillion dollar debt we have. What's the interest?
$61 million per day?
Seems one problem breeds 10 others.Not sure what rate it was all borrowed at but 5% on a tril is 50 bil a year which is a bil a week which is just under 150 mil/day.
We will be fine for 50 or so years, plenty of resources and a relatively small population.Seems one problem breeds 10 others.
Inflation is high.
Everyone stops spending.
People stop having kids.
Import immigrants that send money offshore.
Housing too high and no one can afford to build.
No where to live, rents go up.
Governed by idiots at every level.
It's like a bad clown show.
How does this not blow up in the end?
Realistically Canada and the US is still kicking.
BOE cuts rates to 5.0%.
No signals on which direction next move is.
Mick
This is looking more and more likely.My bet, writing this here so I can say I said it.
USA stays to high for to long, employment cracks, USA goes into a recession, fed chases its tail down with cuts, hard landing
They usually overcook it.This is looking more and more likely.
Stocks Sell Off a Day After Furious Rally as Volatility Returns
Notable quotes from the article:
View attachment 181846
View attachment 181847
good for interest rate sensitive assets though?
Possibly. They've typically been growth plays, but if there ain't no growth...good for interest rate sensitive assets though?
the 'big inflation fix ' is coming don't worry ( she'll be rightThe other absurdity is that things like the unemployment rate have actually remained quite good not because of any real decent jobs market but because people are now having to work more to pay their bills. This is why paying attention to things like the participation rate are so important. The same goes for GDP growth vs population growth (we can be in a per capita recession despite not being in an actual recession for example).
The reality is that if your inflation is a supply side driven problem there is nothing that monetary (or even fiscal, really) policy can do to solve it.
Like if there's a big war to fight or something, you have no choice but to restructure your economy around the problem, and this is the bind that policy makers now find themselves in because doing this is going to hurt. It's not so much a "recession we have to have" but a "reset we have to have".
Until we see any kind of real political will to do that we are going to continue to eat the shite sandwich we are being dealt and so need to invest assuming that things will continue in this way because, to be honest, they're probably going to.
Mmmm I'm halfway with you on this divs.the 'big inflation fix ' is coming don't worry ( she'll be right)
sure it will look like sanctions and extra tariffs on China ( to you and me )
but it will all work out ( for somebody )
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