Aidan,

You say inflation is a temporary matter caused by supply-side problems. They've been saying that in the US for over a year now and only recently did the authorities there concede that, it is indeed an on-going and immediate problem. Hence the raising of rates there by the largest jump in a generation.

The inflation in Australia is caused by over-spending by the government. Of course, the only way they could implement the lockdown was by throwing money at people who were no longer productive, but that does have consequences, which we are now seeing. Whatismore, in classical fashion the inflation is being locked in with demands for wage rises coming left and right, and rising transport costs flowing throughout the economy.

I know that you are wedded to the concepts of Modern Monetary Theory and think that governments can borrow and spend without consequence. But that fallacy is now being exposed all around the world. It may be true that governments don't have to and may not pay the debts back, but that doesn't mean the country doesn't pay for those debts. We are starting to see those payments now with higher inflation, higher interest rates, lower growth and declining consumer confidence.

The notion that we could borrow money, spend it willy-nilly and not suffer consequences was always bonkers. The next generation may not have to pay the debt back but they will pay with lower standards of living than would otherwise be the case.

PS..."Inflation is taxation without legislation." Friedman.

The point here is that the next government will be faced with these emerging economic problems (is disaster too strong a word?) and neither party are suited or prepared for the challenge. But as the problems grow and become more apparent, the government, whoever they are will be blamed.

Although the real culprits are the most recent leaders, the current government will carry the odium. This is why winning will be a poisoned pill. Addressing the errors of the last 5 years will take a generation, but the government for the next 3 years will carry the burden and blame for not doing so.

This is caused by Josh Frydenberg and Morrison, so its to be hoped that they will exit the scene. But there is no one, literally no one, in the ALP who is capable of doing what is needed. The last time a Labor government was greeted with economic problems of this scale they had the personnel to do what was need. But Albanese ain't Hawke and Chalmers definitely isn't Keating.

Interesting times...and you know what the Chinese purported say about interesting times.

Not so shore Labor had the right man to handle the problem mhaze. I was living on a resort island, with all keep provided, [I don't drink smoke or gamble], so my bank A/C grew quite quickly. Plus I was getting $17,000 a year in interest on just $100,000 deposit. It was great for me, but those with borrowings were often in sever trouble at over 17% interest. Quite a few I knew lost homes & businesses.

Business loans were even worse. The division I ran was paying over a million in interest on just over four million borrowings. We were profitable to handle it, but many were not.

The whole covid thing is even more ridiculous when you think just half a dozen covid cases had Victoria locked down for months, but now anyone can fly in no questions asked. All the destruction of lives, & money wasted was for absolutely nothing.

The next real challenge for whoever "wins" will be making home ownership easier despite rising interest rates and inflation without allowing the value of existing property to fall.

Shorten was on the right track about "grandfathering" existing negative gearing and then restricting it to new dwellings but now the ALP has been spooked into abandoning it.

The best that the Libs have suggested (besides buying a house in order to avoid rising rent costs) was to "get a better job that pays more money".
Visionaries!

mhaze: "The last time a Labor government was greeted with economic problems of this scale they had the personnel to do what was need."

Well, to be fair, they were in a way better position to handle it because they had a lot of public assets that they could flog off to get them out of trouble (a trick which was continued in Howard's era).

Note however, that in me saying this that I'm not against the privatisation of national assets that has occurred. Indeed, I'm all for it: the public sector simply can't run things as efficiently as the private sector. But I'd dead against is the racking up of public debt and treating it as a good thing- current monetary thinking is foolish. What the government should be doing is saving a bit of money in the good times (ie: the last 30+ years pre-covid) for the bad times (eg: covid that we've just had). Public debt will almost always* eventually cause inflation and inflation is more than as mhaze quoted "Inflation is taxation without legislation", but rather a taxation without legislation on the poor.

*:theoretically public debt spending can increase the productivity of the economy enough to offset the cost, (eg: building a new bridge or educating the young and (re)skilling the workforce) but in reality most of the spending is wasted on non-productive programs. And when it is spent on a project that successfully boosts productivity, since it is the government doing it you can be london-to-a-brick sure that it would have been better for the private sector to handle it.

Stopping all the green garbage restricting subdivision would go a long way towards making housing affordable, as it would drastically bring down land costs.

I am not allowed to split off a block off my 19.5 acres for my daughter to build on, nor can she build a second house on my property, all for greeny ratbagery. This despite 3 acre blocks opposite me on the other side of the road, 4000 Sq Mt blocks just a kilometer away, & 400 Sq Mt just a couple of Ks up the road.