We have an apology to make, and we offer it sincerely to the Financial Review.
Yesterday on social media we engaged in some rather easy satire in the wake of the dramatically lower inflation results for the December quarter revealed by the Australian Bureau of Statistics, suggesting the AFR would note that inflation had fallen but demand the Reserve Bank continue to lift interest rates. It was a joke — we didn’t think that even the AFR could be that stupid and that its hatred of ordinary Australians could be that intense.
As it turns out, rather than parody, the tweet was almost perfectly accurate: today the AFR notes that while there has been an “encouraging” fall in inflation, the RBA needs to lift rates again. The only thing we got wrong was that instead of blaming Labor’s changes to the stage three tax cuts, the AFR blames higher wages growth for the need to keep punishing Australians.
Undoubtedly, the results caused deep rage at the in-house journal of Australia’s last remaining neoliberals and the much larger phalanx of business shills. Both the quarterly and the monthly CPI indicators for December have now come in lower than forecast — and much lower than expected by the Reserve Bank in its last set of forecasts in November’s final Statement of Monetary Policy for 2023. Gosh — who said the RBA doesn’t understand inflation?
Quarter-on-quarter inflation slowed to an increase of 0.6% in the three months to December, half the 1.2% in the September quarter and less than a third of the 1.9% jump in the December 2022 quarter. Core inflation as measured by the trimmed mean method fell for the fourth quarter in a row to 4.2% annually from 5.1% in the September quarter and the peak of 6.8% in the December 2022 quarter. That was much lower than most forecasts.
The outcome — and the evidence from the December (and revised November) retail sales data, showing consumers have been smashed — won’t see the RBA change tack at next week’s first 2023 meeting (the first two-day meeting ever), but it will give its ideologues something to think about with few signs of embedded inflation.
There remain some areas of concern: insurance costs were still up 3.8% in the quarter and a massive 16.2% for the year. That’s down to the big rise in road accidents that marked 2023 (especially in NSW, Victoria and South Australia) and the continuing impacts of climate change on the frequency and intensity of major weather events (it turns out, constantly electing politicians who think climate change is nonsense doesn’t actually stop climate change… who knew?)
Insurance premia aren’t going away as a source of inflation — they are one direct example of how our refusal to do anything about the climate emergency will make for a more volatile and inflationary world.
An increase in tobacco excise also drove a big increase in the tobacco and alcohol category, for the few remaining Australians unable to quit. The diminishing ranks of smokers really do deserve our thanks (delivered from a distance) — they don’t just pay for the full costs their addiction inflicts on the health system, they continue to provide a generous stream of additional revenue.
Otherwise, it was all smiles across most goods and services categories. The cost of meat and fruit fell in the quarter as farmers either took advantage of better growing conditions and the lack of wet weather that made life tough in 2022 and 2021 or were forced to sell off stock in what looked like a developing El Nino dry spell — which now may not continue. The extent to which the supermarket duopoly is passing on these reductions in full — after increasing their margins over the last couple of years — is now under investigation by the Australian Competition and Consumer Commission, and not before time.
And power prices should fall significantly mid-year when dramatically lower wholesale power prices are reflected in retail prices. If they’re not, the relevant regulators, and the governments who oversee them, should be chucked out on their ears. Ordinary Australians have already endured far more than they should from business, governments and the galahs in the business media.
I’m glad someone has finally exposed the AFR for the failing newspaper it has become. Apart from being male, pale and stale, its editorial stance is becoming irrelevant. Its constant blaming of higher wage demands on inflation is completely wrong and its call for a continuation of higher interest rates when we are dealing with cost inflation, not demand inflation is ludicrous. I used to take 15 minutes to read the AFR, now it’s about 4 minutes….when I have the time!
That’s sexist, racist and ageist. Reverse the criteria and see how you fare online.
Disclaimer.
I’m not in anyway advocating The Smirk’s rags.
I think it’s a metaphor, rather than the truth. A newspaper can’t be male.
Like US media talking down the economy defying reality, but setting up negative talking points for the GOP vs. Biden & Dems in next election; ditto Oz….
You might want to fact check this comment: “The diminishing ranks of smokers really do deserve our thanks (delivered from a distance) — they don’t just pay for the full costs their addiction inflicts on the health system, they continue to provide a generous stream of additional revenue.”
As Health Minister prior to the 2013 election, Nicola Roxon was quoted in the media with words to the effect that she would be happy to see revenue from tobacco taxes drop to zero because that would mean no one was smoking and that the cost (to the health system) of smoking-related illness was greater than the revenue raised by tobacco taxes.
My sister died from lung cancer from smoking, a few months before she was due to get an age pension. So twenty years of saved pension should be in the mix as well. But the whole thing is a typical case of putting the budget first and people last. Money in the budget is just numbers on a computer screen, while someone coughing their lungs out is horrible. Just saying. And you’re right, of course.
Of course politicians are going to say something like that. What do you expect them to say? “ Go ahead, smokers, puff away. All good for our coffers”. It’s basic PR. People need to remember that politicians have images to maintain. Some are better at it than others. Some are more calculating than others. Some more honest, which can get them into trouble , as often as it can enhance them.
The AFR is a metaphor for Australian business leadership: venal, aging dinosaurs.
Extinction beckons.
I never get tired of this: “The Financial Review. Where the only good worker is a dead one”.
The AFR are just doing the normal media thing – speaking to their readership who comprise the 1/3 of Australians with no debt and positive savings and who benefit from rate rises. Everything they publish needs to be assessed through that lens.
1/3? You’re dreaming, mate. Your definition of the AFR’s readership is absurdly broad; the vast majority of “Australians with no debt and positive savings” would include young Australians legally unable to access debt or credit, recent migrants with a couple grand in a rainy-day fund and no credit history, and pensioners with a paid-off house and not much else. The AFR’s readership would largely consist of ideological neoliberal capitalists who have yet to notice the writing on the wall, and those who derive significant portions of their income from dividends and capital gains, “investment property” (AKA amoral rent-seeking), or tax scams, and those the Libs love to term “aspirationals” (those who have yet to figure out how to exploit their own community for personal profit.) 1/3?They’d be lucky to make up 1/30 of our population.
A grim picture. And you’ve left out the financial planners, financial journalists and economists as readers of AFR. Not to mention the copies dropped off at Parliament House for the economically blind to study so they can formulate policy (after considering vested interests).
I disagree with most of what the AFR says but as I work in financial markets I read it. It’s handy to know how the ‘titans of industry’ think about how to run the country. Then plan out ways to do the opposite
I read the AFR for the same reason we watch Sky – always good to know how the other side thinks.
Not necessarily – the more you do that the more the algorithms measuring you will target you with more and more skewed stories and spin…and little by little your own understanding of a moderate middle-ground will shift to the right.
No, not if you the input of family members like mine who are extremely adept at analysing right-wing spin, as well as outmanoeuvring algorithms. You can’t anticipate nor counter the right wingers if you don’t understand where they’re coming from. You can bet political parties do the same.