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Perception is everything. If you spent last week glued to the economy, you'd have thought the sky was falling in. Inflation was rampant, you were told. Growth forecasts were gloomy. Real wages were going backwards and there was pain to come. And then, mid the hyperventilation, came this tweet about inflation from the avuncular Alan Kohler, ABC's finance guru and editor in chief of The Eureka Report: "Missing from the shouting about 6.1% is the fact that inflation is declining. Prices rose 2.1% in the March quarter, 1.8% in June. Probably less in September. Annual rates simply affected by the base effect. Inflation has peaked." Mischief? No, just a different way of interpreting the data. In a subsequent tweet, Uncle Alan predicted interest rates would be being cut by this time next year. Glass half full.
If you actually went shopping, and shopped around, you might have noticed a few things. The price of iceberg lettuce, which momentarily became an economic indicator, had fallen by 30 per cent. Still six bucks but that's way better than 10 - and anyway who eats lettuce in the middle of winter? Avocados - once the expensive luxury blamed for keeping millennials out of the housing market - were dirt cheap. Fuel was down too - still high but not as bad as it was, at least not in this neck of the woods. And property, which went through a hell storm of unsustainable growth only last year, was right off the boil, ripe for the bargain hunters.
Ah, shopping around, that old skill our grandparents, who lived through much tougher times, tried to pass down. Davo, the wily old father-in-law, demonstrated it the other day. Lined up to order coffee, he asked the price. "That's too much," he said. "I can get it downstairs for 40 cents cheaper." He had to walk a bit further for his cup of Java but was determined to send a price signal to the seller. It was the second time in a fortnight I'd seen inflation-fighting consumers stand their ground. In a Vietnamese restaurant in the city, a punter walked in off the street, asked the price of a banh mi, and declined: "Sorry, luv. I can get one cheaper around the corner."
An economist with whom The Echidna was jaw-boning on Friday made the same point about interest rates. While the media focuses on the cash rate, over which borrowers have no control, the mortgage rate charged by lending institutions, which is open to negotiation, is much more relevant. Watch that and hunt out a better deal. The banks want your business.
The old wage price spiral bogeyman is not what we should fear now; it's the price-price spiral. The temptation to charge what they think they can get away with is hard for business operators to resist. So it falls to us consumers to spot a gouge and take our precious dollars elsewhere. It might seem we're powerless when it comes to non-discretionary costs, that stuff we can't do without. Some of it we can at least influence, like mortgage costs, and shopping smarter at the supermarket. But we do hold the power in our hip pockets with the discretionary spend, the stuff we choose to buy. And we should use it.
HAVE YOUR SAY: Have we lost the art of shopping around? Are we too tempted by instant gratification these days? What lessons from our grandparents have served us well? Email us: echidna@theechidna.com.au
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IN CASE YOU MISSED IT:
- Almost two-thirds of grants given from a $1 billion regional infrastructure program were against department recommendations, a damning audit has revealed. The audit office's report into the former Coalition government's Building Better Regions Fund has revealed 65 per cent of 1293 projects awarded funding were not put forward by the Infrastructure Department as the "most meritorious".
- The disabled and their carers will be the focus of a text message campaign to improve Australia's uptake of second COVID-19 boosters and antiviral treatments. More than a million disability pensioners and their carers will from August receive texts highlighting access to fourth vaccination doses and antivirals to counteract the potential for severe illness.
- Academics are urging the federal parliament to support a bid to restore territory rights when the proposal is introduced this week. Labor backbenchers Alicia Payne and Luke Gosling will attempt to gain parliamentary support for their bill, which would allow territory governments to legislate on voluntary assisted dying.
THEY SAID IT: "There are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation." - Herbert Hoover
YOU SAID IT: We spoke about the first week of the new parliament, MPs' behaviour and whether Labor needs to end the blame game on the economy.
Melody was not impressed: "Question time in the Senate on Thursday was an appalling display of selfish, unruly behaviour by Liberal and other senators, who repeatedly and pointedly refused direction from the Senate President to come to order so that Question Time could be used constructively. Citizens of this country are entitled to be able to listen to parliamentarians working hard to make this country a better place. Instead we heard grown men behaving like an uncontrolled, primitive, childish rabble. Blatant Dorothy Dixers don't exactly fill me with admiration either. Put them on a strictly moderated blog and use Question Time for the adult, informative, real debate that voters deserve. No wonder so many voters are so cynical about you all. Grow up!"
Elaine wanted an end to the blame game: "I believe most Australians are well aware where the said blame originated. Now is the time to govern for the people of Australia, shame the Liberals still have not got the message. I guess Dutton will continue to follow Abbott's destructive rhetoric but Labor needs to rise above this and follow the example they have said about respectful negotiation."
Elaine said it was time to get on with the job: "News is gradually, and sometime quickly, surfacing about the rorts and mismanagement of the previous government, but we already knew they were bad. That's why they got voted out. And I love the approach of Penny Wong - she personifies doing politics differently. She tackles the opposition with patience, all the facts at her fingertips, and above all, humour. And Peter Dutton is just doing same old, same old. A nasty piece of work, IMHO."
And poor old Darrell? He's pretty much given up: "Having been around for six plus decades, I really can't rate the first week of Parliament now I have a clear understanding of how theatrical and facile political parties are and how corrupt/crooked governance is. Sadly, no optimism or enthusiasm whatsoever."