Last night, the dinkum Aussie treasurer, Wayne Swallow, released his first budget for the nation.
The budget had numerous prongs, one of which was to help Aussie working families and another of which was to fight inflation.
Inflation has been blown up into this enormous, vicious, flesh-consuming enemy. We all know, from sometimes bitter experience in the home, that budgeting can be fraught with competing demands, wishes and completely nutty fantasies. The same things apply at the national level. Budgetary tactics can take many tracks, all of which are arguable, depending upon your world view and your ambitions. However, we in the Land Down Under have had a long succession of federal treasurers who have followed the “inflation is a bogeyman” dogma. Isn’t it about time that we had a treasurer, and perhaps a budget that openly and candidly addressed the pros and cons of inflation?
To balance up the scales a bit, let us look at what inflation can do for the working family.We will do this by first acknowledging that inflation does have important ramifications for Aussie exporters and globally oriented industries.
If we have $100 and we invest this at a fixed simple interest rate of 10% per annum, then in about seven years, provided we do not draw on the capital or the interest, our little nest egg will have roughly doubled. Let us now bear that in mind to guide the following argument. As genuine, fair dinkum little Aussie battlers, we aspire to own our own homes. To do this, we take out a housing loan. Let us make sure that we do this on a fixed interest rate. If we have a wages system that ties wages to an honest annual calculation of inflation, then if we have a “high” inflation rate, let us say, for example, 10% per annum, after a period of five years, our home loan repayments will be the same as when we started, but our wages will be approximately twice that of when we started. Consequently, our home loan repayments will be only half as onerous and burdensome. In another five years (which is only a mere decade from the starting time) our home loan burden will be only a quarter of that which we endured at the beginning.
What gives me the pip, is that our governments, irrespective of which wing they play on, on their level playing fields, lack the guts to come out and admit that they hate inflation because it re-distributes wealth from the excessively wealthy (for example banks) to the working class families.
Governments cannot be servants to low inflation and servants to working families at the same time.
Battler
The budget had numerous prongs, one of which was to help Aussie working families and another of which was to fight inflation.
Inflation has been blown up into this enormous, vicious, flesh-consuming enemy. We all know, from sometimes bitter experience in the home, that budgeting can be fraught with competing demands, wishes and completely nutty fantasies. The same things apply at the national level. Budgetary tactics can take many tracks, all of which are arguable, depending upon your world view and your ambitions. However, we in the Land Down Under have had a long succession of federal treasurers who have followed the “inflation is a bogeyman” dogma. Isn’t it about time that we had a treasurer, and perhaps a budget that openly and candidly addressed the pros and cons of inflation?
To balance up the scales a bit, let us look at what inflation can do for the working family.We will do this by first acknowledging that inflation does have important ramifications for Aussie exporters and globally oriented industries.
If we have $100 and we invest this at a fixed simple interest rate of 10% per annum, then in about seven years, provided we do not draw on the capital or the interest, our little nest egg will have roughly doubled. Let us now bear that in mind to guide the following argument. As genuine, fair dinkum little Aussie battlers, we aspire to own our own homes. To do this, we take out a housing loan. Let us make sure that we do this on a fixed interest rate. If we have a wages system that ties wages to an honest annual calculation of inflation, then if we have a “high” inflation rate, let us say, for example, 10% per annum, after a period of five years, our home loan repayments will be the same as when we started, but our wages will be approximately twice that of when we started. Consequently, our home loan repayments will be only half as onerous and burdensome. In another five years (which is only a mere decade from the starting time) our home loan burden will be only a quarter of that which we endured at the beginning.
What gives me the pip, is that our governments, irrespective of which wing they play on, on their level playing fields, lack the guts to come out and admit that they hate inflation because it re-distributes wealth from the excessively wealthy (for example banks) to the working class families.
Governments cannot be servants to low inflation and servants to working families at the same time.
Battler
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