Greg Jericho

Australia's June inflation rate fell to 3.8% from 4.0% in May, sharply reducing market expectations of a Reserve Bank of Australia rate rise in August. Greg Jericho argues that investors previously overreacted to solid employment growth while overlooking rising unemployment, underemployment and labor underutilization. Lower petrol prices were the main contributor to the June result, although fuel prices are expected to rise in July because of higher oil prices and reduced fuel-excise support. Electricity subsidies also distort the annual inflation figure, while grocery prices such as lamb, beef, tea and coffee have risen much faster than the headline rate, and mortgage repayments are excluded from the CPI. Markets now expect any further rate rise to be delayed until early 2027, though the author criticizes the continuing search for reasons to tighten monetary policy.

Labor members are pushing to add a commitment to a fairer return from Australia’s natural resources to the party platform, signaling growing internal pressure for stronger gas taxation. The article argues that the petroleum resource rent tax has failed to capture sufficient revenue: despite a dramatic increase in LNG exports, receipts have fallen and are forecast to remain low. It supports the ACTU’s proposal to replace the system with a 25% tax on gas exports, which could raise up to A$17 billion annually—enough to fund dental care through Medicare, free childcare or substantially increased public-school spending. The proposed tax would target gas companies’ after-tax profits without directly raising consumer prices, while the government’s existing reforms are portrayed as favoring the gas industry.

Greg Jericho argues that most of One Nation’s economic proposals are poorly developed, particularly its plan to give the Reserve Bank power over government spending and its proposal for 30-year mortgages fixed at 5%. He supports the separate idea of a publicly owned “people’s bank,” saying it could challenge the oligopoly of Australia’s major banks, reduce fees and improve deposit and lending rates. However, he argues that subsidized long-term mortgages would increase housing demand and prices rather than solve affordability problems, while diverting Housing Australia Future Fund resources away from social and affordable housing. He concludes that One Nation’s bank proposal merits debate, but its broader economic agenda lacks substance.

The proposed changes to Australia’s capital gains tax discount are already coinciding with weaker house prices, despite having not yet become law. Greg Jericho argues that the 50% CGT discount introduced in 1999 played a central role in worsening housing affordability, countering claims that deregulation, inflation targeting and banking accords were more important. Australian Taxation Office data show that capital gains are concentrated among older and wealthier Australians: people over 65 receive substantially more capital-gains income than younger groups, while the richest 0.2% of income earners received 38% of net capital gains in 2023–24. The article concludes that opposition claims that the reforms harm young people are misleading and largely protect entrenched, affluent interests.

Reserve Bank of Australia governor Michele Bullock’s view that Australia can sustain only about 2% annual growth implies unemployment may need to rise to contain inflation. Greg Jericho argues this reflects an institutional bias toward protecting company profits rather than workers’ wages and employment. He contends that wage growth, household spending and broader demand remain weak, while data-centre investment is not creating enough jobs to justify the RBA’s excess-demand narrative. Although the bank has stopped raising rates for now, further increases remain possible.

Australian dwelling prices rose 10.3% over the year to the March quarter, far outpacing household-income growth, with especially sharp increases in Western Australia, Perth, Brisbane and Adelaide. Greg Jericho argues that decades of policies—including first-home-buyer grants, HomeBuilder and investor tax concessions—have increased demand and worsened affordability. Proposed changes to the 50% capital-gains-tax discount and negative gearing for existing properties could cause prices to fall by about 10%, but that would only return them roughly to late-2024 levels. Restoring the 1999 relationship between dwelling prices and income would put the average home at about $595,500, underscoring the scale of the affordability crisis and the long-term challenge ahead.

Australia’s economy grew 0.3% in the March quarter and 2.5% annually, but the main driver was a surge in private investment in data-centre machinery and equipment. The investment supported GDP without creating many long-term jobs, while increasing electricity demand could prolong coal and gas generation, raise power prices and undermine emissions reductions. The article also highlights falling per-capita household spending and disposable income, with higher interest payments contributing to the decline, arguing that GDP fails to capture climate risks and living standards.

Greg Jericho argues that Australia’s 2026 budget debate reflects distorted social priorities. The NDIS faces an approximately 11% real-terms cut, disproportionately affecting people with disabilities, including people with Down syndrome, while conservative politicians and media focus heavily on tax changes affecting family trusts, negative gearing and capital gains. He also highlights widespread cost barriers to dental care, noting that the Parliamentary Budget Office estimates universal dental coverage through Medicare would cost about A$13.6 billion annually, less than potential revenue from a gas-export tax. The article concludes that wealthy Australians’ lost tax advantages have received far more concern than the loss of essential disability services and unaffordable dental treatment.

Greg Jericho argues that conservative politicians, property interests and media outlets have exaggerated the effects of Labor’s changes to capital-gains tax, negative gearing and testamentary trusts. He says the reforms are unlikely to cause the predicted housing collapse and do not introduce a death tax, while existing testamentary-trust beneficiaries are protected by grandfathering. Although estate taxes could raise several billion dollars, their political cost would be high; Jericho instead urges the Albanese government to pursue a widely supported gas export tax that could raise substantially more revenue.

Australia’s weak wage growth is falling behind inflation, reducing workers’ real incomes while investment income and tax concessions continue to benefit wealthier Australians. Treasury analysis shows that the capital gains tax discount, negative gearing and discretionary trusts provide vastly larger lifetime benefits to the richest households and allow comparable non-wage earners to pay lower average tax rates than wage earners. The budget’s working Australia tax offset, reduced capital gains tax discount and proposed 30% minimum tax rate for discretionary trusts are presented as initial steps toward correcting this imbalance, although the reforms only partially address the inequality and housing-affordability effects of the existing system.

Australia’s 2026 federal budget contains few surprises because its major measures were widely signalled, but it makes significant reforms to housing and taxation by ending the 50% capital gains tax discount, restricting negative gearing to new builds and imposing a 30% minimum tax rate on discretionary-trust income. These measures are expected to raise substantial revenue over time and reduce incentives to treat housing as a speculative asset. The budget also forecasts smaller deficits and does not appear inflationary, with current price pressures attributed mainly to international factors. However, the government declines to introduce a gas export tax, leaves JobSeeker well below the poverty line and cuts projected NDIS spending by $36.2 billion, making the package socially mixed despite its ambitious tax reforms.

Australia’s wealthy derive much of their income from capital gains, dividends, partnerships and discretionary trusts, making it easier to reduce their tax liabilities than for wage earners. The government is reportedly considering abolishing the 50% capital-gains discount and introducing a 30% minimum tax rate on discretionary trust income. The reforms could significantly reduce tax avoidance and address inequality, although conservatives and farmers may oppose them over complexity and intergenerational farm ownership concerns. The article argues that exemptions for primary-production trusts could address farmers’ concerns while preserving the broader equity benefits.

March inflation rose sharply to 4.6% annually, but the increase was driven overwhelmingly by a 32% surge in petrol prices following conflict involving Iran and the closure of the Strait of Hormuz. Greg Jericho argues that the Reserve Bank of Australia cannot meaningfully reduce internationally driven oil-price inflation through higher interest rates, which would instead worsen pressure on households. Core inflation remained flat at 3.3%, domestic price growth and market-services inflation slowed, and petrol prices fell in April after the fuel-excise reduction. He contends that the RBA should wait for further data, including wages figures, rather than raise rates in response to a likely one-off fuel shock.

The Australian government is reportedly considering limiting negative gearing to two properties and reducing or replacing the 50% capital gains tax discount. Greg Jericho argues that decades of evidence do not support claims that these concessions lower rents or substantially increase housing supply. He favors cutting the discount to 25%, though returning to pre-1999 inflation-adjusted taxation would still represent meaningful reform. The muted political and public response suggests housing-tax reform may have become more electorally acceptable and that property lobby groups may have less influence than expected.

The IMF’s latest World Economic Outlook sharply downgrades the global outlook after the outbreak of war in the Middle East, presenting bad, adverse and severe scenarios involving sustained energy-price shocks, weaker growth and possible recession-like conditions. Greg Jericho argues that the IMF avoids attributing the turmoil to Donald Trump and remains overly focused on wage-driven inflation and interest-rate responses, despite its own research showing that rising corporate profits drove much of Europe’s recent inflation. Australia faces one of the largest growth downgrades, while the government may need to support households without worsening its budget position. A higher tax on LNG exports, such as the Australian Council of Trade Unions’ proposed 25% levy, is suggested as a way to fund relief and limit recession risks.

Australia is not currently near a recession, with unemployment-based indicators remaining relatively healthy, but risks have increased because of the Iran conflict, oil-price volatility and the possibility of stagflation. Donald Trump's retreat from threats against Iran has temporarily eased pressure on oil markets, yet inflation is expected to remain higher and markets still anticipate further Reserve Bank of Australia interest-rate rises. Historical examples show that aggressive rate increases helped produce previous Australian recessions, prompting concern that the RBA could again tighten policy too far. The article argues that recessions cause lasting employment damage and urges the central bank to stop raising rates if economic conditions and unemployment deteriorate.

Australian household wealth rose by $1.751 trillion in 2025, with nearly half of the increase coming from land values. Land now accounts for 42% of household assets and is worth roughly three times the value of dwellings, benefiting existing owners while making entry into the housing market harder for younger Australians. The article argues that the 50% capital gains tax discount for investment properties has helped turn housing into a wealth-accumulation vehicle since its introduction in 1999, without assisting people buying homes to live in. It calls on the government to reduce the discount in the May budget, despite opposition from the Liberal Party.

Australia’s February annual inflation eased slightly to 3.7%, while underlying inflation held at 3.3%, but the figures were quickly overshadowed by a sharp rise in petrol prices following the Iran conflict. The resulting supply shock is expected to push inflation substantially higher in June and possibly at year-end, increasing pressure on the Reserve Bank of Australia to raise interest rates despite recession risks. Wage growth has been slowing, while national accounts data indicate that rising profit margins, rather than labor costs, drove much of the late-2025 inflation increase. The fuel surge is also making mutual-obligation requirements unaffordable for people receiving JobSeeker, prompting calls from the Antipoverty Centre and Greens for their suspension.