Too often we are told by economists that the only way to reduce inflation is by the Reserve Bank hiking interest rates. But this ignores that the government can actually reduce the prices and costs of many items and services.
We know this is true because it has happened before!
Just last year the Treasurer, Jim Chalmers, said when the government increased the childcare subsidy
What we’ve tried to do is to provide cost of living relief in a number of areas so that we can make things a little bit easier. Cheaper childcare will make life easier for a lot of families in a way that doesn’t add substantially to the inflation challenge in our economy.
Over the last year, the government has continued to provide cost of living relief that also reduces inflation. Inflation (measured by the Consumer Price Index) is the change in prices of goods and services paid by people. The government has control over many prices in the economy. For example, the price of university degrees or medicines listed on the Pharmaceutical Benefits Scheme (PBS). Lowering these prices not only directly reduces inflation but also provides cost of living relief for those who now have to pay less.
Here is a list of 6 inflation-busting ideas for the upcoming budget that would also provide cost of living relief.