A no-nonsense n woman has called out the government over the cost of living crisis – and said not enough is being done to help the middle class.
Gayle Hardiman, an audience member on ABC’s Q+A, voiced her concerns about the growing cost-of-living burden during Monday night’s episode.
‘My husband and I have cut right back on our spending. We’re not going out for dinners, not using toll roads, not having numerous cups of coffee a day,’ Ms Hardiman said.
‘We’re really thinking about how we can save money, because it really is hurting everybody.’
Ms Hardiman asked the Q+A panel what immediate measures the government could implement to alleviate the cost of living pressure.
Jo Masters, chief economist at Barrenjoey, explained that inflation is the main reason many people are experiencing financial hardship.
‘The truth is the best thing we can do to help all ns is bring inflation down,’ Ms Masters said.
‘That means we need the government not to spend too much in this economy. We don’t want them to stoke more inflation.’
Ms Masters said the government had already introduced some measures to ease the cost of living, such as tax cuts and subsidised electricity, and suggested additional relief might be considered.
‘They still put in some policy relief for those ns that are the most vulnerable, but what we know from history is that relief has to be timely, it has to be temporary, and most importantly, it has to be targeted.’
However, Ms Hardiman fired back at the suggestion, and said action needed to be taken immediately.
‘What about dental, medical, house insurance, car insurance, registration, tolls on the road, petrol, groceries? I mean the list goes on,’ Ms Hardiman said.
‘Most people who are middle class and below, I don’t know how they’re getting by day-by-day. I seriously don’t.
‘Think of people who won’t go to a dentist now because they haven’t got enough money. There’s just so many aspects of what we’re talking about here that need immediate attention.’
She explained that the cost of living crisis was causing people to lose hope for a better quality of life.
‘My husband and I’s grocery shop is just staggering,’ Ms Hardiman said.
‘Knowing a number of people who don’t have a house, they’re paying rent every week.
‘And if they’ve got a couple of children, how do they pay rent, pay all these heavy tolls, huge grocery bills, education, I mean medical, the list goes on.
‘People are getting to the point where they’ve lost all hope in there being a better way of life than what they’re experiencing now.’
She also criticised the government for toll roads, arguing that the cost for motorists keeps rising, with many being forced to spend a significant amount of money just to get to work.
Warwick McKibbin, a former Reserve Bank board member, warns that high government spending is keeping inflation higher for longer.
‘It’s not just high immigration, it’s also excess demand by state and federal governments – they’re still pumping money into the economy which is not necessarily a problem if you’ve got productivity growth,’ he told Daily Mail .
‘The problem is we have no productivity growth.
‘You’ve got too much government demand in the economy; you haven’t got enough effective workers in the right sectors.
‘It’s a whole, multi-faceted set of mistakes in policy that’s causing inflation to be higher than the central bank target.’
The underlying inflation rate of 3.5 per cent is still above the Reserve Bank’s 2 to 3 per cent target, but services inflation in the year to September was even higher at 4.6 per cent.
Headline inflation fell to a three-year low of 2.8 per cent, mainly as a result of one-off factors like the government’s temporary $300 electricity rebates and cheaper petrol prices for now.
But the Reserve Bank is forecasting the consumer price index soaring to 3.7 per cent in late 2025 after those power rebates expire.
Reserve Bank Governor Michele Bullock has in fact talked up the prospect of another rate hike, despite borrowers copping 13 increases in 2022 and 2023.
‘The reason why we’re not ruling anything in or out is we do think there are still some risks on the upside,’ she said earlier this month.
‘And what that’s suggestive of is that demand is still above supply, which we talked about before, and we still have a labour market which looks on the tight side.’
Another 25 basis point increase would take the RBA cash rate to a 13-year high of 4.6 per cent and add $100 to monthly repayments on an average, $600,000 mortgage.
Ms Bullock, who has independence from the government, did not mince her words on when she blamed high population growth for keeping inflation high.
‘What’s keeping aggregate demand – even though it’s not growing very much – what’s keeping the level high is population growth,’ she told reporters half an hour after the Melbourne Cup.
‘Aggregate demand is still above the ability of the economy to supply – even though it’s not growing, it’s still above aggregate supply.’
n borrowers are missing out on relief even though the U.S., UK, Canada, European Union and New Zealand have this year cut interest rates.
The futures market sees no rate cut until June next year – after the next election is due.
Westpac and NAB are forecasting a May rate cut while the Commonwealth Bank and ANZ see relief occurring in February.