The Treasurer's Crystal Ball
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What is the Intergenerational Report and why is it important for Australia’s future?
Hello, I'm Alan Kohler, editor at large of Intelligence Investor and Finance Presenter, Economist and Podcaster for the ABC.
And I'm Stephen Main, contributor and intelligent investor, founder of Crikey and Shareholder Activist. And this is the Money Cafe. Alan with a special guest later on.
Well that's right. And it's the only guest we have on uh Money Cafe is Jim Chalmers. The Treasurer. Um I keep getting these um uh requests from people that come on Monday Cafe and I have to c say to them, um, you know, no, sorry, we don't have guests, it's just it's just us. Um, except w when we occasionally get the treasurer.
Well, twice now. Intergenerational report's a pretty big thing.
So I I
think it's worthwhile. It was a good job.
That's right. And he's he's gonna join us from uh cafe in his electorate. So it's um It's all cafes. Getting into the spirit of things, isn't he? That's right. But we um we have not got a uh picture of him doing that. It's just audio. But you can hear the Logan Cafe, the name of which I forget, but uh it uh it's certainly you can hear it in the background. But um anyway, we'll get there. Uh so a couple of uh couple of things for us to talk about before we move to The Intergenerational Report and Jim Charmers. Interest rates next week, Stephen, gonna go up for sure, right? Well watching it on
the news last night, all four big fan big banks are now saying uh up they go to f four point six and uh ninety two percent chance and then likelihood another two after that and official interest rates get above five percent for the first time. Since pre GFC. So this is pretty brutal and it's a global trend 'cause inflation is out of control. Or not out of control. Inflation is too high.
Inflation's too high. They can't get it down. They've got to slow the economy down to make to you know, and hammer everybody with uh higher interest rates to You know, get the inflation down. So yeah, that's what's looks like it's gonna happen for sure. And uh I, you know, I I just think that this is uh th this is terrible. It's terrible. I mean real disposable incomes are already uh flat to declining. Um, you know, people are already in strife. Um but mind you, you go out to a restaurant these days and it's full all the time. They're always full. I mean I was it's amazing. So I don't know. What do you think, Stephen?
Well, I think it's uh I mean I don't want to sound too gloomy, but Could we could this be a recession? I mean, particularly if we suddenly get a big crunch in immigration. Um, and we've got sentiment around house prices. And rising interest rates. I mean, it's it's it's gonna hurt hurt a lot it's gonna hurt a lot of people. I agree and you know So I'm if I do three rises, uh you know, I mean I guess they're terrifying, you know, they're trying to get inflation down and There was a bit of an uptick in unemployment, but uh I thought we were done and that the next r move was gonna be down. I was on a I was on a investor call Jeff Wilson's Wilson Asset Management and a couple of their fund managers were on yesterday and they were saying
Everything was going great, you know, until Melbourne Cup Day last year and we had that sh really unexpected inflation and then we all of a sudden had interest rates on the rise and it's been It's been terrible since then. Uh but it'll turn the cycle will turn hopefully. But uh You know, people see the most negative thing in the economy is rising interest rates. And the fact that uh we thought we'd reach the top and now up we go again. Uh, it's very gloomy and um if you got a big mortgage, it's a cash flow crunch, isn't it?
It is, that's right. And that's what the Reserve Bank's trying to achieve, a cash flow crunch and they're trying to Um, they're trying to make sure that everyone has a cash flow crunch and every and that's what uh is gonna happen. So I don't know.
And meanwhile internationally, geez is hard to keep up with the all the action in New York. The United Nations, I mean, Trump's there and everyone's meeting with everyone. Trump with Burnham. Steve Whitkoff with the Iranian Foreign Minister.
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Chapters
8 chapters
1
What is the Intergenerational Report and why is it important for Australia’s future?
0:12–5:56
2
How are rising interest rates expected to affect inflation and household cash flow?
5:56–12:05
3
Why did the Treasury settle on a 1.2 % productivity growth assumption in the IGR?
12:05–19:28
4
How is artificial intelligence being incorporated into the IGR and what risks does it pose?
19:28–26:34
5
What is the government’s stance on migration levels and how will they be adjusted?
26:34–34:43
6
How will upcoming tax reforms and AGM changes impact investors and companies?
34:43–41:36
7
Should the beer excise and other hospitality taxes be re‑structured to boost the sector?
41:36–50:12
8
What are the key take‑aways from Treasurer Jim Chalmers’ appearance on the Money Café?
50:12–58:13