The author recalls 2018, when then-governor Philip Lowe sought to lift wage growth, and argues that today the main threat to living standards is high inflation rather than low wages. The bigger challenge for reform-minded policymakers, it says, is avoiding backsliding such as a larger government, a return to protectionism, or migration cuts that worsen labour shortages. The article lists drivers of a new inflationary era, including geopolitical conflicts and energy prices, climate-related disruption, weak productivity, onshoring of manufacturing, demographic labour shortages and concentrated markets, which it says monetary policy cannot easily control. It proposes a new anti-inflation toolbox: tougher competition laws with break-up powers, abolishing anti-dumping rules, removing remaining tariffs, and dropping local content requirements in government procurement. It also revisits Nicholas Gruen's 1997 proposal for an independent Central Fiscal Authority that could adjust tax levels to manage inflation.
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inflationmonetary policytariffsproductivity
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Related tickers and likely impact
AUD/USD
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/20/2026 | 0.70040 |
| Change that session | +0.35% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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