So, the inflation numbers out today were, in a word, ordinary.
But that probably underplays the result.
While the quarterly CPI fell from an annualised 6% in the June quarter to 5.4% in September, the monthly numbers tell the real – sad – story.
Annual inflation in July was 4.9%.
In August, it was 5.2%.
In September, it had jumped again, to 5.6%.
That trend… is not pretty.
Will it be enough to see the RBA raise rates?
That's the $64 question. And the answer is 'no-one knows'.
At least two of our major banks have stuck their necks out and predicted new Governor Michele Bullock will raise rates on Melbourne Cup day.
Frankly, that's the most likely outcome, I'd reckon.
The RBA has said, repeatedly, that it would do whatever was necessary to get inflation down. And while they're prepared to wait a couple of years for it to get back to the target of between 2% and 3%, they'll presumably not want to see increases along the way.
Unfortunately, those with mortgages will probably be the biggest losers on Melbourne Cup day.
Speaking of biggest losers, it is well past time we had a serious national conversation about our national debt, and the sorry state of the Federal Budget.
When the last government left office, they forecast deficits (and so, rising national debt) for as far out as the Budget estimates would take us.
The new government has done nothing to make a dent in those estimates.
So, while neither side of politics wants to say the words 'fiscal discipline' out loud, we'll just keep adding more debt to the pile.
Let's be clear: our national debt is way too high. And a forecast that it'll get worse, not better, is something our Parliament should be ashamed of.
See, not only is the debt getting larger, but the interest bill continues to grow, too – both on the back of that larger debt, and because interest rates are increasing. A classic double whammy.
It beggars belief that both major parties (and most of the minors, from what I can tell) have no plans to deal with a growing debt pile.
"We're better than some countries" is one reply.
Sure, but I'm not sure being the least sick bloke in the hospital ward is something to which we should aspire.
"There's no need to pay off the debt" say others.
Which is technically true. Except that the interest bill needs to be paid. And the more debt we have, the riskier we'll seem to lenders who'll demand a higher interest rate again. And the less 'dry powder' we'll have when the next crisis rolls around.
We try to teach our kids financial responsibility. Perhaps we should start with our politicians.
Speaking of our kids, they're the ones who'll inherit a structural budget deficit and a growing pile of debt.
There you go kids… not only did we mess up the planet, but we also saddled you with debt.
You're welcome.
"The government is not like a household" is the other retort.
Again, that's true. There's technically no limit on the national credit card. And households can't print money.
Unfortunately, that doesn't make all of those potential consequences disappear. And we know what happens when interest rates get too low and governments get too spend-happy.
The bottom line?
Running a Federal Budget on the basis of 'it could be worse', 'we're better than them' or 'if we're lucky it'll be okay' isn't good policy. Or governance.
That some people think that's the case just underlines how far our public discourse has fallen.
We had zero national government debt (on a net basis) only 15 or 16 years ago.
Since then? We gave ourselves sugar hit after sugar hit, running up debt without anything sustainable to show for it.
We have countless examples, over the past couple of decades, of what happens when we kick the can down the road.
A little prudence is called for. A little old-fashioned financial discipline.
First step: restore the Federal Budget to structural balance.
Then, make a plan to pay down the debt.
We don't have to do it today. Or tomorrow. But we should have a plan to do it. And then we should stick to it.
Something our grandparents might have taught us. And something we should heed.
Fool on!
