Nicola Willis

And so when you enter the crisis with inflation already running outside your target band, when you've got expectations for inflation already very high, and when, and I want to be diplomatic, but you've got bigger spending government that is stimulating the economy with its spending, then all of those things mean that the ability for your economy to absorb what is a real price shock for everyone that no one can avoid,

as well.

And so they have had their inflation rates spike higher faster.

We're all dealing with exactly the same international events, but they started in a worse position.

It is difficult, and I actually have a huge amount of sympathy for the people in that poll who were saying, look, just give me some relief.

I really want some relief.

I understand that.

But my job as the finance minister is to say, OK, but what would be the effect of that if I did that?

And to understand what those effects would be.

And history tells us very plainly that governments that respond to inflation crises by pumping up the spending ultimately make it worse for you.

And so right, as I said at the beginning of all of this, I said, look, we've got to be careful here.

to not avoid short-term pain and create longer-term, deeper pain.

And that's the balance that we're seeking to strike.

And I admit, it's uncomfortable.

Yeah, look, you have seen our dollar depreciate and that is part of the way that the economy adjusts to these things happening in the world.

On the one hand, it makes our exporters more competitive so they can keep going.

On the other hand, it makes imports more expensive and that in turn can put some pressure on inflation.

I think we've all settled the debate on do we want to have a fixed exchange rate?

No, we want the exchange rate to float.

In terms of where the Aussies end up, their economy is different from ours.