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This week’s Senate estimates hearing (“Lowe denies RBA is targeting recession”, 16/2) was a missed opportunity to broaden the conversation around causes of inflation; and alternatives to hiking interest rates. The Reserve Bank employs some of our country’s brightest economists. And yet, the complexity and multi-faceted nature of inflation is only dealt with using one mechanism, namely interest rates.
Most Australians, especially young home owners, would like to have heard the governor’s views on alternatives to raising interest rates. A temporary lift in compulsory superannuation contributions is one approach. Selective tax increases is another. In 2023, we should have moved well beyond relying on a single, very blunt macroeconomic tool such as interest rates to curb or encourage spending. In the current economic climate, we need to be asking the governor whether there are any changes or alternatives in fiscal policy that might also help slow inflation.
Charles Reis, Flinders
Blaming governor not constructive
Reserve Bank governor Philip Lowe does not have a crystal ball, nor is he a politician. He should not have to be held to a considered prediction made in late 2021 about the level of future interest rates. His job is to smooth economic activity by altering the cash rate.
Monetary policy is a blunt instrument – changes in interest rates either up or down result in both winners and losers – so there will always be some groups hurt. We all know (including Lowe) the pain higher interest rates has caused, especially to those with a mortgage. However inflation outside 2-3 per cent (RBA target rate) has a corrosive and widespread impact on all sections of the economy.
While it is important for the RBA governor to be accountable, blaming him and, as Greens senator Nick McKim did, asking him “why he should continue in his job” is not helpful. Further, it could lead to less transparency by future RBA governors.
Jane Robins, Moonee Ponds
The punishment we choose to inflict
Two of the main economic policies are fiscal and monetary policies, and over the past 30 years the political response has been to demonise the impact of tax increases (fiscal). This has left interest rates (monetary) to do the heavy lifting to address the changing economic conditions within Australia. Consequently, those who have had to borrow money (mainly home owners) have been “doing the lifting”. If there had been the capacity to implement tax reform via fiscal policy, the pain of carrying the burden to ride out the changing economic conditions could have been more reasonably shared across other sectors within the economy.
As Ross Gittins commented in a recent column, “To someone with a hammer, every problem is a nail”. If the Australian electorate is not prepared to support a political party that suggests some form of broader fiscal policy reform, the electorate cannot bemoan the impact of interest rate increases.
Michael Cowan, Wheelers Hill
More nuance needed
Philip Lowe appears to regard inflation as a raging beast to be captured and killed. His only weapon, increasing the official cash rate, is producing a scattergun effect that harms many borrowers and leaves the beast to rampage. The supply side of the equation can be the province of fiscal policy, but often involves external matters beyond a government’s control. Australia’s low productivity levels reflect a declining complexity of our economy, a fall in the skills profile of our workforce, and an imbalance in the distribution of earnings between capital and labour. Excessively long supply chains are easily disrupted by things like the Ukraine war. These matters were exacerbated by the recent Coalition government prioritising digging things up and shipping them out.
The misplaced confidence the RBA governor expresses in our low unemployment rate may reflect a lack of attention to upskilling our workforce and over reliance on migration. Lowe, it is time for you to encourage a more nuanced debate.
Joy Mettam, Hawthorn East
Australia is prohibited from housing nuclear weapons as signatories to the South Pacific Nuclear Free Zone treaty. So, do American B-52 bombers based in Darwin carry nuclear weapons? (“Nuclear or not?”, 16/2). We will neither confirm or deny, say the Americans.
Penny Wong tells us “to recognise that the US has a neither confirm nor deny position, which we understand and respect”. A neat avoidance of the issue.
Peter Randles, Pascoe Vale South
Our sovereignty at risk
As John Howard famously said, we get to choose which people come into Australia. But choosing which war machines come here …. oh no, that’s up to the US and they won’t be bothering to tell us. Seriously?
When it comes to sovereignty in Australia, Lidia Thorpe, and the rest of us, have much bigger worries than the Voice. Why are we allowing Australia to become another base for US wars? Haven’t they got enough?
Margaret Callinan, Hawthorn
Blind faith poses risks
Regardless of whether successive governments have obliged the US in permitting B-52 bombers on Australian soil is irrelevant. The Labor government has a duty to protect its citizens, regardless of intent or accident with nuclear weaponry. It seems we are being foolishly drawn further into the US military complex and losing more and more of our sovereignty and integrity. We would do well to remember that next month is the 20-year anniversary of the invasion of Iraq, which is well known to have been based on a lie.
Judith Morrison, Nunawading
Defend our leaders
First Jacinda Ardern, now Nicola Sturgeon, both strong, principled women (“‘It is right for me’: Scotland’s First Minister Nicola Sturgeon resigns”, 16/2). It is sad the price of leadership is so high.
We need to protect our leaders as they try to find solutions to
the pressing problems facing all nations.
Carmel McNaught, Balwyn North
No sooner has Jacinda Ardern resigned as New Zealand prime minister than the country is beset by floods, cyclones and now another earthquake. She had better return before another disaster strikes the Shaky Isles.
Nick Toovey, Beaumaris
Image of interconnection
Every time I see a publicity-driven shot of Prime Minister Anthony Albanese – perhaps with young children, the elderly, music festival attendees, factory workers, the LGBT community, the Indigenous community, non-anglo people, non-male people etc – I juxtapose Peter Dutton in that scenario with my imagination and the results are truly harrowing. Try it yourself.
Jae Sconce, Moonee Ponds
Gambling’s deep hooks
Voluntary systems to stem soaring gambling losses (“State’s pokie losses soar as scheme fails addicts”, 16/2) cannot compete with the massive advertising of gambling permitted in Australia. Not only do we have the highest per capita gambling in the world but we are a staggering 40 per cent ahead of the next ranked country, Singapore, according to shocking and shameful figures from 2017.
Our primary school-age children have never watched the AFL or NRL without associating it with betting. We are allowing the gambling lobby to groom our children to become gamblers.
We often scorn the power of the National Rifle Association in the US while the gambling lobby has become our NRA. Just as tobacco advertising was banned so, too, should we ban all advertising of gambling.
Bryan Long, Balwyn
I am concerned that Australia will have to import much more white copy/graphic paper now that the only Australian mill (Opal, in the Latrobe Valley), which normally makes 200,000 tonnes of such paper each year, has run out of wood to make it (“White paper plant to close, jobs lost”, 16/2).
Apart from the extra cost to import copy paper, hundreds of regional jobs in timber harvesting and paper production now appear to be lost – effectively due to Labor-sanctioned activist groups. The Gippsland timber industry is now more at risk than the apparently threatened possums – especially given the small percentage (approximately 5 per cent) of Victorian native forests that could ever be potentially harvested.
Peter Fagg, Forest Scientist, Blackburn
Clash of two cities
Your city editor, Cara Waters, writes excitedly about the future of central Melbourne as a site for both entertainment and living (“Changing the heart of Melbourne”, 15/2). Waters fails to examine the challenges of combining the two successfully. That the two can clash was dramatically illustrated recently when the council allowed a boat on the Yarra River to play music so loudly and for such long hours that more than 100 residents complained to the EPA about the disruption of their lives.
I and some fellow residents have been vainly trying to draw the attention of Melbourne City councillors to noise and safety concerns caused by permissive entertainment practices in Carlton. We residents are very supportive of mixed use but more attention is needed to achieve a reasonable and fair balance.
Josef Szwarc, Carlton
Reputation at risk
While the Nationals shun the Voice and the Liberals quibble over it, many of us would welcome steps beyond the Voice to truth-telling and a treaty. We might even take note of movements in other nations, such as Chile. In that country, a number of parliamentary seats are allocated to elected representatives of Indigenous people proportionate to their numbers within the general population. Given our tragic history of settlement, if the very moderate proposal of the referendum on the Voice fails, how will Australia then be regarded on the international scene?
Peter McCarthy, Mentone
The Sunday Age (12/2) reprinted a historical image of “James Cook taking possession of the land” with Jack Latimore’s explainer on Indigenous sovereignty. This image, from the 19th century, is a prime example of white washing. It is a modified version of the original engraving by Samuel Calvert, from a painting, now lost, by J.A. Gilfillan. (The Calvert etching may be found online in the Nan Kivell collection of the National Library of Australia.) In addition to minor alterations to the Calvert engraving, there is one egregious omission of three crouching First Nations people in the right foreground, one of whom appears to be covering his ears on hearing the proclamation.
It is no wonder that, with this type of white washing, conscious or otherwise, our original Australians feel aggrieved.
Robert La Nauze, Camberwell
Jenna Price makes thoughtful points about our spare bedrooms (“Bedroom secrets that might help the housing crisis”, 15/2), but there’s another way of looking at it. As an architect, I aim to make living space more flexible and adaptable over time. The bottom line is that we can easily live with much less space than we think we need, if we concentrate on using space more efficiently.
Size does matter, and empty-nesters rattling around a family home makes no sense on a large scale, economically or socially. There are possible co-operative housing models, and there are more coercive tax-per-room options. No matter how we look at it, it’s an environmental imperative to be more creative in using and reusing our existing housing resources.
Jenifer Nicholls, Armadale
High rates were hairy
I must take issue with Ross Gittins (Comment, 15/2) when he implies that the 17 per cent interest rate we paid in the 1990s wasn’t too bad because it didn’t last very long. Because of the recession then and the drop in house prices, I owed more on my mortgage than my house was worth on the market, and that was not a nice experience. No one could predict when that situation would end. I hung on, and all was well eventually.
As for investing in homes, I’m not impressed by the spate of recently published books urging young people to “Own 30 homes by age 30” and then retire on a passive income. That’s not in my version of the social contract, and I also believe that it’s necessary for a person’s mental and emotional health that they have a job through which they contribute positively to their society. It seems that this is overlooked by politicians when they measure everything in terms of money, and not well-being.
Don Jordan, Mount Waverley
Schools sold short
It’s disappointing to read that “the Andrews government has committed to funding non-government schools fully in 2023, but has yet to commit to fully funding state schools” (“Catholic schools see drain of students”, 16/2). I have worked in both public and private schools and our children have attended both. The teachers are excellent and committed in both sectors, but the government sector is often very under-resourced in terms of facilities and special resources for children with learning issues. This increasing inequality needs to be addressed as soon as possible by more funds for government schools. What happened to Labor’s vision of social justice and more equality?
Jan Marshall, Brighton
Your correspondent (Letters, 15/2) may be correct that a “better” legislation was passed in 2011 after the Greens opposed Rudd’s emissions scheme. But by joining with Tony Abbott to vote down the CPRS scheme in 2009, the Greens ensured that we got Abbott and everything that followed. Abbott swiftly repealed the “better” legislation and the rest is history.
Abbott was a one-trick pony and the Greens aided his rise to power. The Greens need to acknowledge this, and start working more constructively with this Labor government. Unfortunately, this may be a decade or so too late.
Graeme Gardner, Reservoir
And another thing
Credit:Illustration: Matt Golding
So Philip Lowe saying that interest rates may be low for two years was the reason that people overstated their incomes, understated their living expenses and committed to 30 year loans?
John Murray, Hawthorn East
Philip Lowe “understands the pain of rate rises”, but does he have a mortgage?
Mike Jackson, Ringwood
It’s unfortunate that there have been personal attacks on Philip Lowe, who is just doing his job. His primary aim is to attempt to stop inflation from taking a hold and the only policy lever he has is interest rates.
David Fry, Moonee Ponds
It seems that the only organisations keeping up with galloping inflation are the big four banks.
Steve Dixon, North Melbourne
Oh dear. The Commonwealth Bank might never make $5 billion again. How worrying for them (“CBA shares fall on profit peak fears”, 16/2).
Lindsay Zoch, Mildura
Secondary school double-entry bookkeeping taught me that to have a profit on one side, it’s got to be coming from somewhere else. Record profits at this time don’t really look very nice.
Bryan Lewis, St Helena
Visit Darwin, home to weapons of mass ambiguity.
Paul Custance, Highett
Dan Andrews’ failure to get on board with Perrottet’s planned pokies reform has shaken my faith in him.
Patrice McCarthy, Bendigo
Peter Dutton’s rehabilitation is going well. Now for some children’s books.
Tim Durbridge, Brunswick
Maybe they should have painted those balloons blue, to make them less detectable. Wait, maybe someone’s thought of that already.
Robert Scopes, Hurstbridge
I am an ordinary Joe, or Josie, but if anyone were to offer me an investment opportunity yielding 40 per cent interest, I would smell a rat.
Marie Nash, Balwyn
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