Greg thanks so much for joining us on the daily Oz this morning no problem it's good to be here let's say that I'm the economy and I come to you and you're a GP and I sit down and I want to just kind of have a chat about how my General Health is what would your assessment be oh jeez I mean you're all over the shop really parts of you are looking really.
Trim and good and other parts um I'm wondering if you've been overindulging or you you haven't done any exercise for a while I mean so you know if you look at the the real big picture things you think about unemployment well unemployment's really good at the moment 3.8% that's kind of astonishing really it's it's amazing that uh we've been.
Under 4% for so long um so that's really good inflation which is how much prices are rising each year um the latest figures have got that going up by 3.6% that's coming down uh about 18 months ago it was over 7% which was far too fast now it's coming down it's slowing a bit uh in its fall but it's uh you know 3.6% is livable I think right.
Um still you're okay you're okay with how things are going on the inflation side yeah I mean look you know there's a lot of people who are like oh we got to get it under 3% as fast as possible and I'm like look I can live with uh inflation above 3% so long as it is slowly steadily coming down I'd rather that than going hard and trying to get.
It under 3% and risking you know a recession or something like that so right but if you look at the overall economy the GDP figure which measures everything we produce in the economy everything you spend that's pretty crap at the moment to to be blunt it's it's really low it's this sense that actually the economy is.
Not uh performing all that great and it's kind of a a bit astonishing that actually unemployment is has kept so low because if you look at uh how weak the economy is growing each year um normally that would be associated with unemployment going up fairly quickly and and the fact that it's remained steady kind of is is some good news but um.
Certainly on the um the the inflation front I think again it's this case of yeah you look good but actually if we take a bit of an x-ray and have a look at what's going on there yeah I'm seeing a few dark patches and things I I would not like to see and and that really gives across the the problem with inflation and cost of living Rises at.
The moment is a lot of where people uh or a lot of the the things that are rising fast are in the areas that people can't avoid they're really and you know brents is just a classic uh rental prices are growing really fast at the moment while overall inflation might be looking okay and getting back to where the Reserve Bank would like it the cost.
Of of what we call essential items they still Rising pretty strongly like in in the last year they didn't go up by 3.6% they went up by 4.2% I can understand why people are a little bit confused because they'll see signs of oh things are going well things are going down and they're like but yeah I'm still getting it in the neck I'm still really.
Struggling and and you know that's quite understandable and I think it's in that kind of um difference in in what we see being reported versus what's actually happening in the hit pocket of a lot of our listeners that really confuses young PE young Australians especially uh and he wrote a piece for the guardian last week and he talked a lot about those.
Particular issues that are particularly relevant to our young people so rent prices and hex you made a really interesting comment in the piece you said this is not how the system was meant to work what did you mean by that hello I'm James and I produced the video you're watching if you're enjoying what you're watching we'd love it if you.
Considered subscribing and checking us out on our other platforms it would really helping getting the word out about what we're doing here at TDA thanks very much and now back to the Deep Dove well that's sort of especially relating to that hex and help debt I mean the system was devised on this whole provisor that oh well if you go to.
Union you get a degree you're probably going to earn more than the average person certainly more than the person who doesn't go to UNI so as a result Your Capacity and your likelihood of repaying uh that debt is going to be a lot better you're going to be able to do it and so we'll start you repaying it when you get to around 90% of average.
Earnings now what you have is a system where the debt the actual you're starting with is much much bigger quite quite significantly so and you're starting to repay it when you're just earning a little bit over minimum wage that c is not how the system was devised the system was devised that it reduce your debt each year out of your good.
Sized income now you're not even being a to repay it because you're paying a huge amount of debt outside out of a fairly small income it's it's really screwed up and so I think what I'm hearing from you in terms of this um this quite nice metaphor of a health check-in for our economy is that we're okay we're stable we're things are looking you know fine.
On the X-ray machine there are particular ailments that are affecting younger populations more and now we have the budget on the 14th of May and that's kind of then to continue the metaphor where we go and get told what booster shots we're getting this year and what pills we need to take what are you expecting Jim Charmers to say on the.
14th what he's dealing with is yeah we've got a a slowing economy and normally if you got an overall economy that's growing as pathetically as Australia's economy is normally in that type of situation you be expecting the government to really be spending big or investing big trying to get the economy going one of the risks with that at the.
Moment is we do have a pretty tight labor market there's low unemployment and so if you put out a lot of money and a lot of spending that might drive up inflation even more so that's the danger with something like a stimulus payment for example I don't think there's going to be any stimulus payments as such what they might be looking at is subsidizing.
Things actually lowering the cost of child care reducing the cost in effect reducing the prices of things we saw this happened during the the pandemic uh there was a period where Child Care essentially became free and that actually had an impact on inflation it reduced inflation because the cost of child care is a part of the the.
Inflation bundle of goods where they calculate and if the price of something goes to zero well that actually reduces inflation the prices have been coming out one coming out from overseas that there has been a lot of that prices sort of imported companies over the past 2 years have been taking advantage of the supply side issues to raise prices more.
We certainly saw that with groceries it's not happening so much now mainly because they have got a lot of attention on them but also as we see in the in the last uh inflation figures the biggest drivers of inflation were rents and it's not like oh yeah people want to rent more know it's just you know um landlords would be able to take advant.
AG to raise rents Education costs again it's not a case of our you know universities and high schools and everything are dealing with lots of people suddenly want to be educated and so they're able to raise costs that's not driven by demand healthc care again you know when you're feeling flush with cash you don't suddenly think oh yeah I.
Want to go to the GP and and the hospital you know that's driven by other cost factors and then the final biggest driver of inflation was insurance and again you know you don't you know when you get a a a wage rise you don't think oh well I'll add a bit more to my car insurance or anything like that if you're gym Charmers and you're looking.
At that you're thinking okay the big issue here is making sure I'm not spending a lot of money on things that are going to force it to be a competition for workers yeah um and so he really needs to think about some um investment that actually is going to grow the economy I think for youth I mean the obvious thing for hex is do.
Something about this indexation it's not actually going to help people's cost of livings as such because you're and that can change with a change of policy right yeah your repayments are based on on your income so it doesn't but what it can do is if they if they either maybe capped in uh they could cap indexation they they could say hex and help will go.
Up by whatever the CPI formula is but we'll cap it at 3% because that's what we're targeting for inflation so they could do that or they could just get rid of indexation completely that cost about $15 billion a year which sounds like a lot of money until you hear the government talk about how they're investing $50 billion in defense and no.
One bats an eyelid and we'd also expect given just what we've seen over the last week I would suggest if they don't have anything to do with demestic violence they're going to look very stupid so I'd expect something there as well Greg thank you for that very uh thorough health check on the economy I really appreciate your time I really appreciate.
You talking us through the big issues uh and how to make sense of this this world around us no worries Sam really good to chat
