I can't help feeling that the decision-makers for this country are out of touch with the average person they represent.
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The latest interest rate hike announced on November 7 is intended to help slow down the economy, in particular inflation, but how is this so?
The direct target is people with a mortgage or loan - possibly a business loan or those with credit cards - and in many cases these are young families, and mum and dad businesses. These are the people who have already tightened their financial belt - almost to the point of strangulation.
How is another interest rate hike going to curb their spending when there is often already nothing left in their coffers?
In some cases, the rises will only serve to push people over the edge, maybe even into bankruptcy or foreclosure on their mortgages.
From my own experience, and that of those around me, people are not buying more, but they are spending more. They are spending more on the same or fewer things - such as groceries, insurances and petrol to name a few.
The common solution is to "tighten monetary policy". In simple terms this means the Reserve Bank raises interest rates. Of course increased interest rates will benefit those with money in the bank - but that just means they have more to spend.
What else can be done to reduce the pressure on those in dire financial straights while managing inflation responsibly?
According to the Reserve Bank of Australia the high cost of fuel is a significant contributor to inflation. In simple terms the higher fuel price makes it more expensive to transport goods from one location to another which, in turn, will result in increased prices for items like groceries.
This is a resource that almost everyone needs and uses. So if the government stepped in to reduce that cost across Australia by removing or reducing the excise, that could have a huge financial boost to all who are trying to make ends meet. It has been done before why can't it be done again?
Surely there are other options so that the problem facing the entire country is not the burden of only some of the people.
Jackie Meyers, editor
