And on that note, we are going to shut down the snap blog – thank you for joining us today!

We will have more to say on the interest rate decision and its implications, as well as everything else as we inch towards the election.

For now, we hope there is a tiny bit of light on the horizon with this decision. And that there is a bit more light to come.

We’ll be back with you soon – until then, do good, and take care of you. Amy x

Ellen Fanning: Finally, let me ask you this with respect what Australians are being asked to believe is that you are compared to Peter Dutton, a weak leader, that he is a strong man, and when the tough decisions need to be made, he’s better placed to do that. How do you respond to that?

Albanese:

Well, he he’s yet to make a tough decision. He’s saying that there’ll be cuts in the budget, that if he is Prime Minister, they’ll make all these massive cuts. He’s speaking about $350 billion of waste. But he won’t tell you what they are. I’ll tell you what a tough decision is. A tough decision is saying I’m going to, in the interest of Australians, change the tax cuts that have been legislated so that everyone gets a tax cut, not just some. I’m going to argue the case. I’ll go to the National Press Club.

This is a guy who thinks a tough interview is speaking to Peta Credlin for an hour and a half.

Anthony Albanese is in Sydney where he will open the new ABC headquarters in Parramatta this evening.

Asked if the interest rate cut has had an impact on election timing, Albanese says:

No, this won’t have an impact on the timing of the election. We’ve been really working hard. We’ve been working hard, and we’ve been preparing, we’ve prepared a mid year economic forecast in December. We’ve been working on the budget, and the ERC expenditure Review Committee met for many, many hours yesterday and again this morning. We’ll continue to work, and we’ll continue to look at ways in which we can provide support for Australia.

So will there be a budget next month?

Albanese: Yeah, we’re working on a budget.

Fanning: That’s not what I asked. I asked, Will there be a budget?

Albanese: Well, there’s always a budget.

Fanning: Will the treasurer get to his his feet in the House of Representatives and bring down a budget?

Albanese: Well, yes, he will. That’s what, that’s what happens every year.

Fanning: And it will happen next month?

Albanese: Well, that that’s the plan. We’re working hard on all of those processes.

On what he can tell voters, Anthony Albanese does a lot of asking for a cookie for things not being as bad as they could be.

Which is a valid argument. But voters don’t tend to give cookies for things not being as bad as they might have been. Voters deal with the reality in front of them, which has been tough.

Albanese:

Obviously, global inflation has had an impact right around the world, but in other comparable countries, you’ve seen double digit inflation. You didn’t get to that here, you’ve seen double digit unemployment as well our neighbors just across the ditch in New Zealand in a deep recession, and we haven’t had that here.

The government has been responsible in the way that we’ve managed the economy. We accept that people are doing it tough. That’s why we work together with people on achieving the outcome, which has seen inflation decrease to almost a third of what it was at 2.4% and now the Reserve Bank has been in a position to make this decision today, to see interest rates falling, and when you’ve got a situation where inflation is falling, employment remains strong, wages are growing, and now interest rates are falling, as well as tax cuts being delivered, then those are economic figures that are better than just about anywhere else in the world, we have had the fastest employment growth, faster than any of the g7 countries, the seven largest economies, and indeed, our average unemployment rate has been lower than any government in the last 50 years.

Now that is something that any Labor Prime Minister would be proud of, because keeping people in jobs is absolutely central to the standard of living.

Ellen Fanning says the prime minister’s office rang her and asked if she would like to speak to the Prime Minister.

Yup. Election is in the air.

Anthony Albanese is very keen to focus on the Coalition here:

I saw some of Angus Taylor’s media conference, and I’ve never seen anyone look so miserable. The truth is that Australians will welcome this fall in interest rates today, they are still under pressure It’s certainly not job done, but they’ll welcome it.

The only person who wouldn’t welcome it is Angus Taylor, and of course Peter Dutton who just on the weekend was making the case for higher interest rates, and it’s up to him to explain why he was doing that we have.

On the 12th, Dutton said the RBA was “risking” cutting rates too early and would potentially have to raise rates later on – that is what Albanese is referring to there.

The prime minister has chosen ABC Brisbane host Ellen Fanning as his first interview after the interest rate cut.

In a forward sizzle to the the pre-recorded interview, Fanning says Albanese suggested a budget was coming (which he would) but spent most of the interview trying to frame Peter Dutton:

I’m certainly not getting ahead of myself. I noticed Peter Dutton’s measuring up the curtain. He’s got to do the hard work. He hasn’t done the hard work.

‘Measuring the curtains’ is exactly what Scott Morrison used to accuse Albanese of doing in the lead up to the 2022 election.

Ok, so what about house prices?

Alas, we will likely see house prices rise.

This though is not a reason not to cut rates again. The RBA has a few more things to worry about than housing affordability, and also the problem is waaaaaaaaaay beyond the impact of a rate cut.

Since March 2022 for example, while the RBA has been raising rates, the median house price in Brisbane has gone up 15%, in Adelaide up 25%, and in Perth 41% – that’s faster than happened in those places during the 2010 when the RBA was cutting rates.

Our housing market is massively distorted by a tax system that favours investors. The RBA should not be trying to somehow reverse that, because rate rises (or a lack of cut) actually won’t stop investors being in a better position.

One thing that could be done is a fancy thing called “macroprudential rules”. These are things that for example limit the amount banks can lend to investors. That means rate cuts don’t set fire to house prices as much, and the benefits of rate cuts better flow through to owner occupiers.

These are done by the APRA (Australian Prudential Regulatory Authority) and some were temporarily put in place a decade ago to limit the huge surge in investor lending.

And guess what? They worked!

Asked about housing prices, Michele Bullock gives a long answer about what the RBA’s job is, ending with:

We are focused on inflation, not housing prices. If you want to fix housing prices you got to go to different policies.

YUP.

Michele Bullock is still speaking – because it seems most of the nation’s journalists are in the room at Martin Place and she is doing a very good job of not saying ‘come on guys, aren’t you bored yet’ as journalists ask variations of the same questions we have heard every single press conference since the RBA Governor started holding press conferences.

Asked what her message to Australians is, Bullock said:

My message has been in the past and continues to be – I understand that you are hurting and I understand that mortgage rates are – have increased a lot and you’re finding that hitting your disposal income. But we need to get inflation down, because that’s the other thing that’s really hurting you. If we don’t get inflation down, interest rates won’t come down, and you’ll be stuck with inflation and high interest rates. So, we have to be patient. I understand it hurts. But it’s really important that we get inflation down.

“Today’s decision does not imply that further rate cuts along the lines suggested by the market are coming. We removed to cautionary increase we put in 2023 to a level that’s still restrictive. The board needs more evidence that inflation is continuing to decline before making decisions about the future path of interest rates.”

That she keeps saying it is restrictive means it is very unlikely  that this will be the only cut – otherwise she is saying the economy needs to keep been slowed, and well, no one of their estimates for the next 2 years suggest the economy is going too fast.

In November the RBA was estimating GDP growth in 2024 would be 1.5%, now they think it will be just 1.1%, and whereas by the middle of the year the RBA previously was thinking the economy would be growing at a still bloody weak 2.3%, now it think it will be an even more pathetic 2.0%. Pretty much if that is their outlook there is no way they could not have kept rate high.

Weirdly though the RBA now thinks unemployment will only peak at 4.2% rather than the 4.5% it thought it would get to.

The other big difference is that whereas in November the RBA did not think underlying inflation would only get below 3% near the end of this year, now it thinks it will get there by June.