Economics

What’s driving the potato chip shortage?

Potatoes are among Australia’s favourite vegetables. However, we are facing a shortage of processed potatoes, especially of frozen chips. Coles introduced a two-item limit for shoppers seeking frozen potato products. Fish and chip businesses are under pressure and some are outraged McDonald’s is launching a new potato product in the middle of a crisis. As…

Central banks hike rates, but for how much longer?

Following interest rate hikes in the US, Europe and the UK, we examine the different economic outlooks the respective central banks are facing. The US Federal Reserve (Fed), European Central Bank (ECB) and Bank of England (BoE) have all raised their respective policy interest rates in the past 24 hours as part of ongoing tightening…

The case for lifting rates in February

Interest rates are almost certain to rise again in February, after the latest Consumer Price Index figures showing inflation hit 7.8% in 2022 – its highest rate in 33 years. The data from the Australian Bureau of Statistics shows a 1.9% increase in the CPI in the December quarter. Combined with the strong increases in…

Has the peak in official rates been reached?

With increasing signs that inflation has peaked and will ease in 2023, the peak in official interest rates in the US and Australia looks to have been priced by markets with only one or two rate hikes remaining. After a tumultuous 2022 we move into 2023 with the possibility that inflation starts rolling over, which…

Reassessing the Whitlam government’s economic legacy

After leading the Australian Labor Party to its first federal election victory in 23 years, Gough Whitlam wasted no time. The Tuesday after his election on December 2 1972, he formed an interim two-man cabinet – a duumvirate – with his deputy Lance Barnard, and set about changing the nation. Modestly, he took only 13…

It’s time to add climate change to the RBA’s top 3 economic goals

Increasingly, climate change is at the centre of government decision-making. This year’s federal budget devoted pages to an examination of the fiscal impact of climate change; Treasury has established a climate change modelling unit; and it’ll be front and centre of next year’s intergenerational report. Yet it is still nowhere near the centre of the…

What drumbeat will different assets march to in 2023?

The conventional wisdom about trying to time the market is that you shouldn’t. Catching the tops and bottoms with any degree of accuracy or consistency is near impossible and the cost of getting it wrong can take a heavy mental as well as financial toll. But there is a difference between an all-in, all-out approach…

RBA an easy scapegoat for record interest rate rises

Reserve Bank Governor Philip Lowe is getting terrible press, most of it undeserved. “Lowe Blow” and “Take a Hike” were two of the headlines on the front page of one of our newspapers. “We’ve had our Phil” was on the front page of another. His critics – the ones complaining about continual increases in interest…

Why has the RBA raised interest rates for a record 7th month?

Pushing up interest rates isn’t something the Reserve Bank does lightly. But what’s worrying the Reserve Bank – and why it increased interest rates for a record seventh consecutive month on Melbourne Cup Tuesday – is that inflation seems to have become completely detached from the bank’s target band. That target band of 2-3% was…

Australia needs a conversation about tax and budgets

Jim Chalmers is a wily operator. Ahead of delivering his first budget next Tuesday, he has given himself room to do the things a treasurer needs to do. For a while, his predecessor Josh Frydenberg denied himself that room. In his first budget as treasurer under Scott Morrison ahead of the 2019 election, Frydenberg promised…