Chris Richardson

Our politicians, by the way, aren't make or break around a lot of that.

But they can either stand in the way of our productivity gains, our prosperity gains, or they can help them along.

And for some decades now, we have been in a nation where our politicians have not challenged us as much as they should, haven't made us change as much as we should, and therefore we haven't

had our political classes giving us a boot along on that prosperity front.

To be fair, it does look at all that.

But again, you raise a really important point around the backdrop.

You know, at times people pretend there is a magic wand, you know, well, we could all just be more prosperous if this, if that.

Sometimes it's let's just, you know...

raise everybody's wages, which at one stage, Australia in the mid-1970s did that.

And of course, we got a lot of inflation and we did not get any change in prosperity.

There are all sorts of people out there who will peddle simple solutions for complex problems.

If you look at the problem that the Reserve Bank has to juggle, it promises Australians that over time it will stay on top of inflation.

And what is inflation?

Inflation, it crops up when we have too much money.

chasing too little stuff when our spending runs ahead of the ability of the economy to produce the stuff that we're spending on.

Or in the economist's jargon, demand is ahead of supply.

And that is a situation that we had before the Iran war.

Inflation had looked as though it was going down for a while, but it had popped its head back up.

The Reserve Bank had brought out the hammer and was whacking that nail.

and then this war happened.