The inflation genie was out of the bottle!Kevin and Wayne gave the RBA the nod to increase interest rates at will.The reasons for inflation were mostly external ie fuel and the cost of food due to the lack of competition in our domestic market.Increasing interest rates will do little to stop the consumption of fuel because of it's relative demand inelasticity and it won't stop retail cartels from increasing the price of food,another fairly inelastic commodity.

So what was the real motivation behind all this alarm?Well Labor want to be known as economic conservatives but don't really have the nous to back it up.The solution?Create a false sense of alarm and blame the previous Govt for the present pain.In other words the cancer patients of NSW need a lot more chemo-therapy than they need,so when the election comes nigh,they will feel better as the chemo is reduced,but still may die from this Labor cancer.The psychology is that we will feel greatful for the reduction of pain.

Wayne and Kevin are playing with fire since thay are relying on the RBA to measure the tolerance levels of the real economy.If they drive us into a recession next year,it will be too late for a recovery before the next election.

This is why Peter Costello has a hop in his step and does not look like retiring from politics.Interesting times eh?

Looks a lot like the situation when Keating was replaced by Howard, only then the new Government were bleating about the "ten billion dollar black hole" and not "the legacy of rising interest rates and inflation".

The more things change, the more they stay the same.

Oh, and who was it that gave the RBA independence to set interest rates?

arjay you are a dreamer save your thread I have and will remind you of it many times in the next few years.
Rudd has won the next election already a increase in his majority is assured care to bet I am wrong?
Thanks for the grin maybe you should include reality next time.

Belly 10 bucks to a charity of your calling, based on the increased majority bit, and visa versa? I trust you.

As I've said here before, Labor played up the negatives in the economy for political gain. Now I'm wondering if they are just another team of economic fearmongers. Time will tell.

Arjay, I'm disappointed that Swannee didn't go for swingeing cuts to 'middle class welfare'. What a cop out. After Keating and Costello this guy is vapid.

Palimpsest the real no brainer for me was the dropping of the gas conversion subsidy for cars.We now have a deficit of $20 billion pa due to petroleum imports.If more Aussies use natural gas,they will have more money in their pockets thus a higher living standard and reduce the balance of trade deficit.It makes our industries more competitive since they can reduce costs and makes our cities a lot cleaner.ie health benefits.

They floated the idea of terminating work for the dole,but when the Tele ran with on the front page,the idea was canned.This is testing the water before the economic policy is implemented.I'm told they are going to water down work for the dole,so obligation will be minimal.They have just secured another 500,000 voters.Add to that 700,000 on the DSP and 350,000 single parents.Big minority groups.

Every time Malcolm Turnbull opens his mouth,Wayne Swan cringes with anticipation of his economic ignorance being laid bare.This present Federal Labor Party have to be the most scant in the talent stakes since the 1960's.Wayne is a nice genuine bloke,but also is Morris Iemma.

I don't want them to fail because it is ordinary punters who suffer the fallout.The Coalition are smacking their chops in anticipation.I just hope they don't get too cocky.

Belly,we shall see!

ok ten bucks truth is I bet more than that yesterday but you pick the one.
Grave doubts some understand the budget I here every word the ABC says then haunt the web .
Hear both sides every word will look over Brendon the losts speech tonight in digs, away again till Saturday.
A hunger to understand politics drives me so a few tips on why I will win our bet.
Labors majority is not large, the win was but more seats exist for a popular leader, few for such as Brendon the complainer.
Budget had to be both a slow down tool but not a hard break one.
It did not have to bring us to a screaming halt, did not do too bad.
Tax saving a conservative promise should have been put in super it is inflationary but world wide slow down is coming.
Even right now in my state NSW my team the ALP has a chance of wining the next election , why?
Oppositions who wait for the rotting flesh to fall to the floor ,who fatten the pig on market day do not win.
Both federally and in my state complaining is not policy development.
I oppose NSW Labor in its present form but it is no easy task removing any government one with polling like Rudd's is not going any place.

Belly- your on pal, a Labor victory nexy time, but with a decreased majority. If we're both wrong and the Libs get up?

Arjay, sorry for being so tardy in responding. My belief is that between the 2 parties we get degrees of difference, but no fundamental changes anymore. I'm mostly curious about the perceptions and tactics. After 10 years of hearing how the dastardly JWH used fear and loathing to manipulate us all I can't believe the alternative who won power by playing on the fear of Global Warming, the fear of economic hardtimes ahead and the fear of allowing free association between employees and employers.

I'll bet that if the old team was running the joint still, this 1% rise in inflation would be dealt with as a blip in the economy, and not as the iceberg that threatens the good ship Oz.

Gotta agree about the gas thing. Hypocritical or just plain dumb?

palimpsest I will not be wrong now I am as usual trying to be funny I like a grin.
But if the federal ALP does not get returned I know nothing about politics save this I am fair dinkum.
Howard ran a tight ship Brendon would not win a raffle on Friday night if he bought all the tickets.
If the Liberals win I will paint myself bright yellow and impersonate a portable round about for a week.

If todays polls speak my money looks safe Rudd has a 53% lead over whats his name, who is asking his future leader to leave Parliament.
Come on this is funny!
Swan leads as preferred treasurer.
NSW with the party Branch's at war with the monster, the leadership, is a real chance of winning the 2011 election, well its not funny is it?
What has happened to the conservatives in this country?
Are they dead forever or will they one day take the party back from the NSW right of Right Liberals?