Health News at Your Fingertips

Scott Morrison has addressed the Coalition party room for the last time before the May election in a speech full of ra-ra about how this is “our room, the government party room”.

Morrison expressed confidence the Coalition would be re-elected due to the wisdom of the Australian people, and the sharper focus on the “consequences” of voters’ choice closer to the election; and the hard work of his MPs.

Morrison said that Anthony Albanese, if elected, would be guided not by the principles he’d espoused in speeches “pretending to be John Howard” but 30 years of his own philosophy – and that he would be the most left wing Labor leader since Doc Evatt.

Morrison dropped two big hints about the budget:

• That after Australians had “worked hard, sacrificed and pushed through” the pandemic the government would “give them the support they need” and this would not amount to “giving people anything” but redeeming “what they’d worked for”. This narrative would be a “strong counterpoint” for what critics might say about the budget. So, expect handouts.
• That it will “transform regional Australia” and deputy prime minister Barnaby Joyce should be proud of what he’d sought for regional Australia. So, big investment in the regions.

Joyce himself described electing a government as like choosing a dentist. “I don’t care if the dentist is my friend, I care that he or she knows what they’re doing,” he said.

As per that earlier post about those inflation expectations …

Let’s say the RBA does “lose its patience” with both rising prices and consumers’ expectations, and starts raising rates as investors are currently expecting from June.

If the rates rise as the CBA forecasts (and they are the biggest mortgage issuer in the country and so have an eagle eye on this bunny), there will be a rising interest rate toll for those majority borrowers who are on variable rates.

RateCity.com did some number crunching for us (we did ask nicely) based on the CBA’s prediction that the RBA’s cash rate will rise from the record low 0.1% now to 1.25% by next February.

They found the average new home loan customer in Australia would see their monthly repayments rise by an estimated $381 by February next year.

In NSW, repayments would rise by an estimated $495 a month by February, assuming their loan size is $804,675. (That’s the average recorded by the ABS for January.)

The calculation also assumes the mortgage holder is on the average RBA new customer variable interest rate of 2.52% and has a 30-year owner-occupier principal and interest home loan.

Those tallies are worth contrasting with the cost-of-living handouts we’ll learn about later today when we get our mitts on the budget.

Parts of northern New South Wales are again being lashed with heavy rainfall, forcing thousands of residents to evacuate for the second time in a month.

Widespread rainfall of up between 50 and 100mm is expected in NSW today, with higher localised falls of 150mm possible.

The low pressure system will bring heavy to torrential rainfall over the North Coast until Wednesday morning, with isolated severe thunderstorms possible.

The NSW State Emergency Service warned “life threatening flash flooding” and “significant riverine flooding” was possible as already saturated catchments were lashed with heavy rainfall.

The SES has already responded to 462 requests for assistance including 14 flood rescues over the past 24 hours.

The SES said:

There is a high chance of landslips. Damaging wind gusts are possible from Wednesday afternoon continuing into Thursday. Downing of trees and powerlines is therefore possible.

There were six evacuation orders in place on Tuesday morning and one evacuation warning for the Lismore CBD, east Lismore and Girards Hill.

Some 6,673 people across Tumbulgum and surrounds, low-lying parts of Mullumbimby and the CBD, low-lying parts of Billinudgel, North Lismore, low-lying parts of Kyogle and South Lismore had been ordered to evacuate.

There were 12 flood warnings in place across NSW including major flood warnings for the Tweed, Richmond and Wilsons Rivers.

The wild weather conditions have also caused rough seas, expected to peak at between four and six metres on Thursday, with beach erosion possible at south-facing beaches from tomorrow.

About 4,600 personnel including flood rescue teams, aircraft and high clearance vehicles were on the ground as part of the recovery effort that were being diverted to the unfolding emergency.

We know the treasurer, Josh Frydenberg, has a delicate budget balancing act.

That is, how to shower the electorate with sufficient short-term largesse to ease cost of living pressures enough so voters show their gratitude (as they apparently always do, so said the finance minister, Simon Birmingham, yesterday) on election day without fanning rising inflation that makes the Reserve Bank lose its patience and start hiking interest rates.

The latest ANZ-Roy Morgan weekly survey, then, won’t be what Frydenberg wants to see.

Inflationary expectations have climbed another 0.4 percentage points to 6.4%, the highest since June 2012. The rolling four-week average also rose 0.3 points to 5.8%, reinforcing consumers’ worries that prices are headed north and in a hurry.

Consumer confidence, though, mostly held its own, dropping only 0.1 points. Ominously, though, confidence is now worse than the 2020 budget and far below the level of the 2021 budget:

What’s all this mean for interest rates? Well, the financial markets have been betting on an RBA cash rate rise from the record low 0.1% rate to start from June.

If intervestors are right, there will be an interest rate rise EVERY RBA meeting for the rest of 2022 and the rises resume in 2023 when the central bank returns from the usual January holiday.

One thing to watch tomorrow will be whether the budget raises the prospects of (gasp) a pre-election rate rise by the RBA. Hence that delicate dance Frydenberg must perform.