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The Economy, Stupid

Did the RBA just choose recession?

3/19/202630 min

The Reserve Bank says it’ll do whatever it takes to crush inflation, even if it means Australia falls into recession. But for millions of Australians, the pain is already here with petrol prices soaring and mortgage repayments climbing. So did the RBA really have no choice but to lift rates again? Or is this a risk the Bank didn’t need to take?

Guests: 

Gianni La Cava, Former Senior Research Manager at the Reserve Bank of Australia; now Senior Economist at the e61 Institute.

Cherelle Murphy, Oceania Chief Economist, EY

Clips

Mortgage pain didn’t cut spending
Australia’s secret buffer explained
The rise of STIK spending
Can government really cut it?
Forecast: another hike likely
Hold rates amid uncertainty
Recession risk underplayed
COVID 2.0 supply shock fears
Consumers starting to flinch

Transcript preview

First 90 seconds

  1. Gianni La Cava· Guest0:00

    ABC Listen. Podcasts, radio, news, music, and more.

  2. Sisonke Msimang0:05

    The world right now is a disaster. It's easy to feel helpless, but there was a moment when millions of people around the world said, "Enough." I'm Sisonke Msimang. Join me for Boycott, the fight to end apartheid, how Australians joined others around the world to push back against racism and won.

  3. Sherelle Murphy· Guest0:24

    Whites-only teams, we thought that to the average Australian that would be despicable.

  4. Sisonke Msimang0:29

    Boycott, the fight to end apartheid. Search for ABC Rewind on ABC Listen or wherever you get your podcasts.

  5. Peter Martin· Host0:36

    To hear the Reserve Bank talk, it's prepared to put Australia into a recession if it has to in order to bring inflation back down.

  6. Michele Bullock· Soundbite0:46

    We don't want to have a recession, but if it's hard to get inflation down, then, you know, we're going to have to deal with that possibly.

  7. Peter Martin· Host0:55

    Governor Michele Bullock said she hoped that by lifting rates now before we come to expect continuing high inflation, she could avoid doing worse damage later. But those of us who use petrol are already suffering damage from relentlessly climbing prices, and it's set to get worse. The Prime Minister has called together the national cabinet. The Governor acted as if she had little choice but to push up rates this week. But did she?

  8. Unknown speaker1:25

    [upbeat music]

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