RBA Governor Michele Bullock has announced an increase in the official cash rate. Picture: John Appleyard
ANALYSIS
Interest rates have risen again and borrowers are strapping themselves in for another painful ride.
But it turns out we only have ourselves to blame.
The problem is that we can’t help ourselves, we keep going out and “panic buying” things. Even as petrol, rents and food items skyrocket in price, we just keep spending.
At least that has been the line from Energy Minister Chris Bowen, who has said panic buying is “very much” behind the surge of fuel prices in Australia.
I must confess, I was one of the guilty ones. Just this week I “panic bought” some fuel at a service station, which put further pressure on our fuel supply, keeping fuel prices higher for longer and pushing inflation further away from the RBA’s target band. This left the central bank with no option but to hike interest rates.
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If you’ve done this lately, you may be part of the problem. Picture: Abdel Majid Bziouat
What would possess me to do something so rash and ill-advised?
Well my tank was nearly on empty and I “panicked” that I would run out of fuel and be stranded on the eastern distributor if I didn’t pull in to the servo and frivolously splash my cash on some $2.30 per litre fuel.
Perhaps I should have made the calm-headed decision to instead park my car somewhere and walk the rest of the way to work, returning only to fill it up when everyone else had stopped panic buying long enough for prices to normalise.
And it’s not just petrol. If you take a look at all the other categories in the Consumer Price Index (CPI), which is the gauge the RBA uses to monitor inflation, you can find evidence of panic buying everywhere.
Take housing, which is weighted to make up more than 20 per cent of the CPI, and includes spending categories such as construction costs and rents.
I recently “panic paid” an exorbitant amount to have asbestos removed from my home. I got my knickers all in a twist over the small matter of the potential for a deadly illness for myself and my family.
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Meanwhile, if so many renters weren’t “panic spending” on their rent each week, for the privilege of having somewhere to live, housing may not have hit the lofty heights of 6.8 per cent inflation in the most recent ABS data.
Another big category is food and non-alcoholic beverages, weighted at 17 per cent of the CPI.
On the weekend, I went to the supermarket and “panic bought” groceries for my family. I even paid the prices that the supermarket was charging. How could I get so hysterical about needing to feed my kids? So economically irresponsible.
Maybe we could have gone without for a while and still been alive when inflation was brought under control and prices began to come down.
So much panic buying going on within these walls. Picture: Gaye Gerard
Way back in Covid time, I even “panic bought” toilet paper, after running out of it and getting frazzled at the thought of what might happen the next day if I didn’t find some.
I may be taking the mickey in this article, but if you didn’t laugh, you’d cry.
How many people do you know who have stored great quantities of petrol on their properties since the conflict in Iran began? Enough petrol to push up fuel prices nationally just a couple of days after the fighting broke out? And how many people then kept “panic buying” petrol once the prices had increased so much?
What a crock of sh*t.
The truth is that price increases in petrol, housing and groceries have all come about for reasons beyond the control of borrowers. But rate rises are all that the RBA has at its disposal to rein in inflation.
RBA Governor Michelle Bullock knows spending must come down, but even she can’t tell us how to do that.
At the rates announcement press conference, News Corp journalist John Rolfe asked Ms Bullock where families- facing higher fuel prices and now higher mortgage costs too- could find the necessary reductions in spending. She had no answer.
It’s time to stop blaming Aussies for the problem and think about a better way to solve it.
English (US) · 