Peter Martin, Crawford School of Public Policy, Australian National University
The 55 leading economists surveyed by the Economic Society see few signs of Australia aping the US, where inflation has surged to its highest level in 30 years.
Sub-2% mortgages are a thing of the past. The Reserve Bank’s governor has signalled variable rates will rise sooner than previously expected, but says he doesn’t expect it in 2022.
The Reserve Bank’s Term Funding Facility was meant to support lending during COVID. Instead the funds might be ending up in the accounts of bank shareholders.
Australia faces economic problems down the road if three big, structural reform areas — housing affordability, the tax mix, and decarbonisation — are not addressed.
The RBA shouldn’t be spooked into raising interest rates, but the prospect of inflation in the next few years is an important consideration for central banks around the world.