Dr Richard Denniss

Now, again, the RBA governors just said, look, there's no signs that inflationary expectations are rising at the moment, comma, but they might.

Let's get ahead of it.

It's chopping off someone's leg because you fear they might get gangrene in their toe one day.

Because again, all the RBA is worried about is inflation being above 2.5%.

they are terrified of being above this range.

So even though we know the inflation's going up because of something external beyond our control, even though we see no signs of workers and households and employers expecting it to last forever,

Even though we know that, why don't we whack it with a hammer just in case, just for good measure?

But again, who bears the risks of that?

Who bears the costs of that?

Well, people with mortgages.

And Michelle Bullock just said, oh, you know, inflation is really hard on the poor.

Well, you know what's really, really hard on the poor?

Unemployment.

What's really hard on the poor is a recession.

And there's no doubt that increasing interest rates in a slowing economy...

You know, we are getting very close to policy-induced recession, and that's the risk that she's comfortable to take.

They're not very good at forecasting.

And we know they're not very good at forecasting because remember they said under the previous governor, oh, we won't be increasing interest rates for years.

So people went out and borrowed a lot of money because the RBA governor forecast that the RBA wouldn't increase interest rates before they increased them a dozen times in a row.

So we know they were bad at forecasting a few years back.