What an Albo victory will do for home loans

LABOR leader Anthony Albanese is threatening – is promising – to unleash exactly the wages-prices spiral that would send interest rates really rocketing higher and devastate the finances of millions of Australians.

The disturbing indication from Albanese on day one of the election campaign that he hadn’t a clue what had been happening in the economy and indeed how the economy actually worked, turned seriously dangerous on Tuesday.

After loosely talking about wanting “real wage rises”, he went on to make the “obvious” promise – with inflation at 5.1 per cent, as prime minister he would push for wage rises of 5.1 per cent plus.

So, if inflation kicked up to 7 per cent, Mr – desperately – Wannabe-PM Albanese would have to push for 7 per cent-plus wage rises across the entire economy.

And if inflation then kicked up to 10 per cent, he’d be demanding across-theboard 10 per cent-plus wage rises.

That’s the “easy” disastrous bit: Economic Ineptitude 101.

It’s what, clearly, Albanese and – from their also “I’m utterly clueless about the economy” comments – both wanna be deputy PM Richard Marles and wannabe-treasurer Jim Chalmers, also don’t understand.

The really disturbing, utterly disastrous course, that a comprehensively clueless Albanese-led government would blunder down, is the way that promoting 5 per cent-plus wage increases when inflation is 5 per cent, is exactly what leads on to 7 per cent inflation.

Then, rinse and mindlessly repeat at 7 per cent, and you are headed for 10 per cent inflation.

That’s exactly the future that would force the Reserve Bank to raise its official cash rate not to the 2-3 per cent it currently intends, but to 5 per cent; and then 7 per cent; and indeed even to 10 per cent and potentially higher.

That’s exactly the future that would see home loan rates go, not to 4 per cent, but to 8 per cent; to 10 per cent and indeed higher.

Got a $400,000 home loan and pondering the impact of the RBA’s first, very, modest rise which is sending your repayments up by $60-70 a month.

How do you fancy repayments going up by $600-700 a month? By $1800-$2100 a month?

Got a $600,000 loan and being hit with a $100-amonth repayment increase? How would you fancy repayments going up by $1000-1200 a month? By $3000-$3600 a month?

Do you think a 5 per cent wage and salary increase – before tax, mind you – would compensate?

That’s if you didn’t lose your job like over 10 per cent of workers did into the 1990s – and lose their jobs for years if not permanently, not months like with Covid – the last time we had a wages-prices-interest rate spiral.

It would be all thanks to a blunderingly inept PM, “supported” by equally inept deputy-PM and treasurer, who are all clueless about the economy and seemingly don’t care.

Now, that “I’m just not fit for purpose” ineptitude Albanese had already displayed was bad and disturbing enough.

What’s the cash rate? Why should it matter to a wannabe-PM just a week before it goes up and is about to keep going up; as he hasn’t a clue how a rising cash rate drives home loan rates higher.

What’s the jobless rate? Does it matter I can’t get within a third of what it really is?

That’s a casual fundamental ignorance that should have made every voter – both every person

with a job and every person looking for one – seriously alarmed.

A wannabe-PM who doesn’t have a clue about the utterly central position of interest rates – how they link to everything: wages, prices, future jobs, house prices, productivity, everything – is announcing that a vote for him is a vote for economic chaos and devastation.