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$50 billion recovered from waste is not enough to solve inflation

“They really have to be very careful about where they place additional demand in the economy,” she said.

Additional support for struggling households in the face of high interest rates would also undo the work of the Reserve Bank, Murphy said.

Dr.  Aruna Sathanapally, chief executive of the Grattan Institute, Dr Angela Jackson, national chair of the Women in Economics Network, and Besa Deda, chief economist of Westpac's Business Bank, at the Nationa Press Club on Wednesday.

Dr. Aruna Sathanapally, chief executive of the Grattan Institute, Dr Angela Jackson, national chair of the Women in Economics Network, and Besa Deda, chief economist of Westpac’s Business Bank, at the Nationa Press Club on Wednesday.Credit: Alex Ellinghausen

Besa Deda, chief economist at Westpac’s Business Bank, said the economy is not what the federal government or the Reserve Bank hoped for six months ago: there are fears that inflation will be more persistent than previously expected, and that the likelihood of multiple interest rate cuts later this year will be greater. year is almost over.

“So the problem for the federal government is that they can’t come up with a budget that will stimulate aggregate demand. At a time when inflation is still high… and there is a risk that it will take even longer for the rate cut to settle down,” Deda said at the National Press Club on Wednesday.

Angela Jackson, chief economist at Impact Economics, said these were tough economic times and it was not possible for the government to claw its way out of the challenge.

“Inflation is a truly bad problem, but we can mitigate its worst effects through smart and targeted investments and reforms that promote economic inclusion,” said Jackson, who is also a member of the government’s Economic Inclusion Advisory Committee.

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Last week the committee recommended increases to Commonwealth Rent Assistance and working age benefits, but Jackson said the recommendations were not necessarily intended to be fully adopted in the upcoming budget.

“It’s a building block situation and we’ve seen them carry over some of the reforms from last year,” she said on Wednesday.

“I have no idea what will be in the budget, but I hope we will see more in the budget in two weeks.”

Arun Sathanapally, CEO of the Grattan Institute, mentioned one of the biggest challenges
for the federal government, there was a structural budget deficit, and the federal government should consider tax reform to help with that.

“Whether or not we see a surplus in two weeks, Australia is not generating enough revenue for what we are spending,” she said.

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