This week, the prime minister, Anthony Albanese, said he would not be pushing for payments for households to deal with the rising costs of energy, groceries and other financial pressures, because to do so would risk further inflation.
The easy option would have been for us to funnel these savings straight into a cash-splash, a one-off giveaway to buy a headline. Cheap politics and hugely expensive economics.
Not just because of the dollar cost. Not just because that’s exactly the sort of short-term approach that got Australia into this situation. But because the untargeted spending would make the problem worse.
Instead of helping households, it would only add to the inflationary pressures that are eating away at family budgets and devaluing wages. Fiscal policy needs to work with monetary policy, not contradict it.
