The sad news from Labor’s weak and poorly-received Budget is that economists have all broadly predicted that inflation will only get worse because of federal government policies.
The primary problem with the Budget is that it hands out subsidies to cover to the cost of rising household and business costs – subsides needed because government policy is increasing the price of everything.
Economist Chris Richardson said: “You can’t subsidise your way to low inflation”.
As Senator Malcolm Roberts said on Sky News’ panel during budget night: “Subsidies add to inflation because sellers know the subsidies exists and just raise their prices to eat that subsidy up.”
The Reserve Bank has stated that rent subsidies add a serious component to the rate of housing inflation.
At every turn, every Labor government policy setting is adding to the cost of living, the cost of housing and the cost of doing business. This Budget just kicks inflation down the road for a few months.
As one analogy goes, an attempt to spend your way out of a recession is like standing in a bucket and trying to lift yourself up. Subsidies is one way the government is trying to mask the fact Australia is in a ‘per capita’ recession.
Like everything that Labor touches, people’s lives are suffering, and Labor only makes things worse.