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Chapter 1: What is the main topic discussed in this episode?
This is a Squiz podcast, where your shortcut to being informed. Good morning, I'm Alice Dempster.
And I'm Andrew Williams.
It's Wednesday the 6th of May. In your Squiz today, another rate hike as inflation bites, Craig Silvey pleads guilty, the Met Gala's done for another year, and a sight to see in the night sky. This is your Squiz today.
Chapter 2: What are the implications of the recent rate hike on inflation?
As many experts expected, the Reserve Bank raised our cash rate by 0.25% yesterday, bringing it to 4.35%. It's the third rate hike in a row this year, and it's likely to add more pressure on Aussies who are already struggling to afford higher fuel and grocery prices.
Yeah, and a common theme in the coverage this morning has been just how honest Reserve Bank Governor Michelle Bullock was in addressing this. She says that she knows it's a very, very tough time, but it's necessary to act now to stop inflation from getting out of hand.
She said that rising oil prices due to the war in the Middle East are making us poorer, but the risk of uncontrolled inflation is much worse. And she also said that even without the effects of the war, the trimmed mean, which is the rate of inflation without sort of the extremes at the margins, is still sitting at 3.3%. That is higher than the RBA's target range of between 2% to 3%.
The big banks have already begun passing on the increase. So if you have a $600,000 mortgage, experts say it'll add around $91 to monthly repayments over 25 years. And that's where that extra squeeze on household spending comes in.
Which takes us to the other part of this conversation. Household spending is something that the federal government is looking at closely before next week's budget on Tuesday. So reports say that Treasurer Jim Chalmers is considering a possible tax cut of between $200 to $300 this for workers to try and lighten the load on that.
But that idea has not calmed the coalition's criticism that the Albanese government is spending too much, which it says has added to our inflation headaches in the first place.
The Coalition doesn't think that's the best idea. It says a one-off tax cut would likely fuel inflation, and Bullock seems to agree with that. She says that handing out money at budget time to cover shortfalls for households makes it harder to dampen demand.
The PM and Chalmers are staying tight-lipped about that, though, so workers will have to sit tight until next Tuesday, the 12th of May, to find out exactly what's in store in the budget. Australian author Craig Silvey was back in court yesterday. He's pleaded guilty to possessing and distributing child exploitation material.
And you may well recognise his name. We spoke about him when these charges were first laid against him back in January. At the time, police raided Silvey's home, seized his electronic devices and charged him with possession, distribution and production of child exploitation material. They've since dropped the production charge.
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Chapter 3: How is the Australian government addressing household spending pressures?
The Aussie Nikita Su will be taking on the undefeated Spanish boxer Oscar Diaz. That is in Newcastle. The undercard begins at around 7 o'clock local time, so 7 o'clock Eastern. Whenever Su and Diaz goes on is anyone's guess, but that's when the event proper starts.
Great. That's us done. Thanks for listening. We'll be back with you again tomorrow.