For years we have known that inflation is a tool that serves the needs of those who have money, to transfer more of it from folk who don't and ultimately a zero sum game that ends with a GFC if we're lucky!?

Or an intractable deep dark depression if we're not!

Never before have we carried more pro rata domestic or foreign debt and never before have our assets been so overvalued or so over leveraged! And when not if, this ever expanding bubble bursts! No happy endings for anyone!

Austerity? Only if you want to exacerbate the problem!

Answer? Rationalized growth as government facilitated/financed cooperative endevour, decentralization, savings (as non contributory 15% super) genuine tax reform as opposed to endless tinkering at the edges, that change little; and expanded housing supply for (first bite of the cherry) Australian owner occupiers!

Assisted with housing commision home roll outs that put the building industry back to full production without forcing the cost of housing through the roof!

The financing as off budget government investment protected by a new pool of salable assets! And given a good history as reliable tenants, able to rent to buy? So as to free up capital for more of the same?

Will the cooperating state governments charge themselves stamp duties or other front end loading, fee and charges!? Probably not?
Alan B.

This is what you get when someone with no economics background writes an article on economics. What is happening is called monetary stimulus. The interest rates are dropped creating a greater demand for money which stimulates investment and growth.

The danger is when inflation starts to increase, which is when the economy has grown to the point where there is competition for resources it makes no difference to the government debt. Presently with inflation in the range of 2% this is not a problem. However, we can already see the beginnings of interest rate increases.

This is what Australia is doing

Quantitative easing as has been implemented in the USA goes far further with the treasury buying up company bonds, essentially lending businesses money which provides further stimulus, but increases government debt as it borrows money to fund these loans.

This is not what Australia is doing.

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Dear Alan,

«For years we have known that inflation is a tool that serves the needs of those who have money»

What?@#!

Inflation is a tool to separate people who have accumulated money over the years from their hard-earned savings!

This is especially true in Australia where savers pay income-tax on their nominal "gains" from interest, thus cannot keep the value of their savings and buy with it the same pair of shoes next year.

This is scary stuff indeed.
Over the last few years I have thought there was something fishy when the Fed was simply printing $80 billion per month while we were allegedly acting fiscally responsibly and yet the Oz dollar was still depreciating against the greenback!
At least the Yanks had the decency to admit they had the printing machines going full blast.