Chris Richardson

And what we are essentially talking about is saying that, well, maybe we can spread this pain differently.

In Australia, home borrowers tend to think that they are feeling the bulk of the pain, and that's true partly because we have such big borrowings as a nation, partly because our mortgage rates jump up and down every time the Reserve Bank does something.

And the underlying question is, well, you know, how can we spread that burden a bit differently, maybe less falling on those with a mortgage and more in superannuation?

We're talking about more falling on wage earners.

Now, in many cases, that's going to be the same people, but in some cases not.

Oh, absolutely.

You would temporarily increase what is essentially a tax on shopping.

And again, what we are saying is still paying, you know, you're still trying to reduce the amount of money getting spent in Australia to bring it more in line with what the economy can produce.

That's what would drive inflation down.

But instead of relying very much, as we do at the moment, on the shoulders of those with a mortgage, or we talked about the superannuation contributions that shifts it onto the shoulders of wage earners, you could use the GST and shift it onto the shoulders of shoppers.

But what you can't get...

is something that removes the pain.

A lot of the discussion, people keep saying there must be a better way, but in the back of their mind, I suspect they're all thinking, well, is there a way to do this without pain?

No, we can shift the pain around.

But sadly, a fight against inflation is a fight that involves pain.

Well, and again, it depends on how big the inflation fight is.

And the GST comes with the initial complication that it would simply push up prices further, obviously, though the Reserve Bank would ignore that in terms of setting interest rates.

Mm-hmm.

But how much you shift interest rates or how much you take away from that response and put it into more money going into super or more going into GST and hence the prices that you're paying in supermarkets and elsewhere, that would simply depend on how big an inflation fight we have.

Yeah, and that side of it, when you're talking about super contributions, you are picking wage earners.