IF the RBA had tighter regulations on all our lending institutions, we would not be in the credit squeeze that is hurting so many at the moment.Credit cards particularily have been an evil device,enslaving people with high interest rates to feed consumer frenzy.This enormously adds to inflation.
Note also the RBA does not discern between inflation caused by wages and those due to fuel prices,Govt taxes/charges,or food price inflation due to the drought and market domination of Wollies and Coles.The effect of rate rises in this climate is to reduce our living standards so we have to work longer and harder for less.
Our GDP was $800 billion just a few years ago,it is now over $1000 billion and we all feel worse off.Where has all the wealth gone?

Go ask your Mr Howard, or better still, Mr Costello (truly, a wonderful spin).

rj, run the compound interest equation on 800 x 1.025 (the target inflation rate). i suspect you will find the answer in about 10 years of iteration.

i don't know why they don't set an inflation target of 0%, but maybe the "free taxes" it provides is the answer.

Demos in 2006 our estimated GDP was just $700 billion.Inflation does not account for the rise of $300 billion in 2 yrs.We can account for $90 billion in the future fund for pollies and PS,but there is another $200 billion unaccounted for.Has this merely been absorbed by high fuel prices and Govt taxes etc?Perhaps it just the Labor rust belt of NSW that is really feeling it, because in my industry prices have not changed in 7yrs with more competition and many other industries I've spoken to are in the same boat.

It would very interesting to see the unstated charter of the RBA because it seems to me that they are intentionally keeping our incomes low to address our balance of payments deficit of over $500 billion.It is about time that they came clean and then we all can debate the sanity of continuing to lower tarrifs.

Desperation will make a conservative do anything.
Except ask this question.
How did we turn 2004 into 2007?

Belly I checked the 2007 figures of GDP out on the net but have come to the conclusion that there is a time lag of 1yr so we don't get the official figures.If my memory serves me right the correct GDP 2 yrs ago was about 8 billion.What has 2004 got to do with anything?This yr was never mentioned.A Belly red herring perhaps?

In any case the RBA must have a wider agenda than just controlling inflation.They must also want to get our balance of payments under conrol.Notice how our interest rates are always higher than the US so we draw in foreign capital to offset the deficit.

Belly do you really think much will change for the positive when Labor assumes the mantle of power?I've heard that if Labor lose it and totally scrap IR reform,the major car companies will pull out of Australia.There will be a loss of 500,000 jobs.What are your solutions Belly or are you just out of your depth like many Labor supporters.