It’s time to rethink how to control inflation

November 4, 2026 — 8:00pm

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Those struggling with mortgage payments have been punished again when their lifestyle choices have little to do with the inflation number we are now facing in Australia. Meanwhile, the big end of town gets more bang for their buck with higher yields from their investments. Surely, it is time for some bright economist (or AI) to work out a way of tackling inflation without causing hardship and suffering to struggling mortgage holders. This one lever used by the government through the RBA only widens the gap between rich and poor. It’s time for some lateral thinking and maybe a rethink on whether 2 to 3 per cent inflation is even possible in these turbulent times.
Graeme Lechte, Pascoe Vale

An Australian-specific solution is needed
It should be no surprise to anyone that the Reserve Bank has again upped interest rates in response to unfavourable inflation statistics. What option did it have? Its consistent, set-in-concrete and sole solution to current inflationary trends is to inflict higher interest rates primarily upon people with mortgages. If that’s not bad enough, hold on to your hats, because this rate increase is not going to solve any of the major problems that are generating worldwide inflationary outcomes (is Donald Trump going to solve the Iranian issue and reduce oil prices to help Australian borrowers?). It looks like we have to expect more of the same with each bad statistic – unless, of course, someone can implement an alternative, Australian-specific action to properly define and deal with this issue. Does the RBA have the talent?
Maurie Keenan, Balaclava

As rates rise, so does lack of faith in RBA
As Ross Gittins suggests (Comment, 4/11), the Reserve Bank would be concerned that almost 60 per cent of people think interest rate increases make inflation worse. However, that finding is not so surprising. When interest rates rise, the cost of servicing debt goes up and so the broader cost of living rises. Many people equate that with inflation.
In addition, the relationship between higher interest rates and falling inflation is opaque, hard to predict and slow to take effect. For example, in theory, higher interest rates cause the Australian dollar to appreciate, import prices, and hence inflation, to fall. However, the value of the Australian dollar depends on many factors in addition to the level of interest rates.
In addition, people might wonder how putting up interest rates in Australia will affect global oil prices which directly affect Australian fuel prices, and prices more broadly.
Given this uncertainty, it is not surprising that many Australians have little faith in interest rate rises to curb the Australian inflation rate.
Rod Wise, Surrey Hills

The cause and effect of policy
I am bewildered by government policy and decisions regarding interest rates, inflation, supposedly assisting first home buyers and telling the Boomers that they have had things too easy and need to be penalised with endless taxes. And yet here we are with young people who bought homes with government supported minimal deposits now facing rising interest rates and with falling house prices may in fact now have negative equity in their properties. On the other hand, Boomers who are retiring and down-sizing have reduced their commitment in the property market and are relishing rises in the stockmarket and rejoicing in rising interest rates for their cash at hand. Do the economists advising government need a refresher course in cause and effect?
Felicity Browne, Toorak

Don’t panic, just relax
Just think in 1982, interest rates hit 21.39 per cent under prime minister Malcolm Fraser, and John Howard was the treasurer. Just relax, all will be well.
Breta Cohen, Blackburn North

THE FORUM

Back to basics
As a retired primary school teacher, (and a grandmother of two year 5 students), I cheered when I read the article ″⁣Laptops down: Yr 5 Naplan tests to return to pen and paper″⁣ (4/11). There is much research in neurology and educational psychology demonstrating that the skill of handwriting brings significant and unique improvements in brain development in children and adolescents. It improves cognitive processing and learning on many levels, as well as developing fine motor skills. This development is not replicated by touch typing. For this reason, future tests should also include year 7s and 9s in the reversion to handwriting.
The teaching and practice of handwriting should also be given much more emphasis throughout the primary years, to capitalise on that brain development, which is crucial to learning.
Lyndell Whiting, Greensborough

Out of their hands
Ross Gittins (Comment, 4/11) reflects a macro economics focus and assumes that everyone has the capacity to prioritise their spending and or on their personal needs. This is simply not the case.Those who are unable to reduce their spending are fuelling the rise in One Nation because they see no connection between the decision of the RBA and their cost-of-living struggles. Gittins’ article shows that macro-economic decisions are in the main business decisions not designed to assist individuals but rather the investor, the saver and those who may have the capacity to reduce their spending. Savings in publicly funded services can only mean more struggles for those already feeling a lack of choice or direction.
Ray Cleary, Camberwell

Just cut and run
In regard to the airport rail link, Jessica Wilson states that ″⁣the route is the route″⁣ and ″⁣contracts have been signed″⁣; but this is no reason for her committing to these arrangements. If costs are involved, so what?
To throw good money after bad is fiscally irresponsible, and this is exemplified by her refusing to put a stop to the SRL. Does Wilson not realise that in business the best outcome is sometimes simply to cut and run?
Peter Drum, Coburg

Free speech and harm
Amelia Luca’s experience with social media (″⁣Families take action against Meta over harming young″⁣, 4/11) provides context for the debate over the current Digital Duty of Care Bill, which the Coalition says gives excessive powers to government and regulators.
This is consistent with their vigorous defence of relatively unfettered free speech, despite the immense harm it might do. This is the organisation that gave us ″⁣lifters and leaners″⁣, supporting an environment where Robodebt unfolded – that labelled demands for a fair go as class warfare – where common decency became political correctness.
The bewildering pace and effect of developments in AI and digital tools probably justifies what the Coalition might usually find heavy-handedness in dealing with on-line content providers.
Kerry O’Brien’s recent Thea Astley address discussed the decline in democracy and hazards of the digital revolution. He observed that the propaganda tools available to Goebbels in 1930s Germany were ″⁣child’s play compared with the digital tools for propagandists today″⁣. His warnings about the difficulty of sustaining serious, honest and inclusive debate on anything remotely contentious or complicated are timely.
Norman Huon, Port Melbourne

Cafe was shining light
The irony of the Footscray cafe being shut because it is too popular (″⁣Salvos’ Footscray cafe shut after five months for being too popular″⁣, 4/11). The purpose of the cafe was to offer vulnerable people free meals while also connecting people to local support services. It appears that locals were concerned that its location would bring more disorder to the central shopping district. Surely the fact that there are many vulnerable people in Footscray is the real concern, and the cafe was there as a support making it a positive thing. While it cannot meet the complex needs in Footscray, it has been a shining light for many. The suggestion that the cafe opens somewhere far from the CBD suggests an out-of-sight, out-of-mind attitude.
Julie Ottobre, Brunswick East

Rates of insanity
The RBA has for the fifth time this year increased the interest rates. The last four did nothing to reduce unemployment or the inflation rate and the cost of living. The saying “Insanity is doing the same thing over and over again and expecting a different result” comes to mind.
Richard Crago, Burwood East

Raise the GST?
With the current rash of interest rate rises, is it a crazy idea to suggest a temporary jump in GST to say 12 per cent for a two-year maximum? Interest rates would be frozen for that same period.
Mortgage holders would no longer need to shoulder the brunt of the rate rises and the economic ″⁣pain″⁣ would be spread evenly as a consumption tax.
An idea worth exploring?
Peter Schmideg, Caulfield Nth

Concerns with both sides
Like your correspondent (Letters, 3/11), I am concerned with some of the policies that will be implemented if the Coalition wins this month’s election.
It would be particularly disappointing if the Opposition Leader Jess Wilson carries out her promise to abolish the First People’s Assembly without giving it an opportunity to demonstrate its worth. However, in spite of these reservations, I simply cannot bring myself to vote for a state Labor Party which has completely lost its way for all the reasons canvassed in so much detail in The Age over the past couple of years.
Ivan Glynn, Vermont

Powerful article
I’ve not read an article (“Secret Men’s Business″⁣, 31/10) that’s more revealing about misogyny in Australian football.
We’ve always known it’s there but to have it so thoroughly exposed down to the roots of the drivers and perpetuating ingredients, I found very gratifying. Horrifying – but gratifying.
If we want to address violence against women in this country – and we think we do – let’s look closely and reflect deeply on the parts of our culture where misogyny is embedded, revered and rewarded. I can’t imagine many mothers and fathers wanting their sons to join the AFL after reading this article. Many readers, especially female, will also be questioning their allegiance to the sport. Let’s hope the AFL read it too.
Rachel Donovan, Camperdown

The ‘least-worst’ option
Labor is past its expiry date. After three terms in office, it carries heavy baggage and a deep trust deficit. Notwithstanding that the Coalition, being in disarray, has made no inroads.
Looking backwards may be cathartic but looking forward is imperative. Labor claims a new direction under Premier Ben Carroll and brings experience in government but holds little political capital. The Coalition promises renewal, but its new leadership is unproven. Jess Wilson is only in her first parliamentary term, has never been a minister nor led a major organisation. Her team is inexperienced in governing, and she needs 16 additional seats, filled by novices, for a majority.
With fixed four-year terms, Victorians must decide who is best to lead until 2030. Sadly, Victorians are faced with choosing who is the “least-worst” option, discredited tired Labor or the uncompelling Coalition. The “best” option may be a joint Labor/Liberal grand coalition over the next four years, providing both parties the time to rebuild.
Carlo Ursida, Kensington

People come first
There must be ways of containing inflation that don’t involve forcing mortgage holders to bear the brunt.
Raising taxes would share the burden more equitably, especially as taxation is progressive, so those experiencing hardship would not be affected.
AUKUS, whether we ever get submarines or not, is an expensive, uncosted impediment to be built for the US but is more likely to make a target than defend us. Scrapping it would save trillions. The government should stand up to the Reserve Bank and lobby groups and look after ordinary people.
Helen Pereira, Heidelberg Heights

Just be grateful
Each day the paper and letters are full of woe about what is not good in this state and country. For all the whiners, go and live in a under developed country for a couple of years, that will bring you back to earth. We need to stop the infernal whining and start to feel some gratitude.
Nola Cormick, Albert Park

Advice for politics
Your correspondent’s mother’s dictum (Letters, 30/10) never to write down something she would not want read out in court may be sound advice but leaves me wondering: was her mother a ministerial adviser?
James McDougall, Kyneton

The gold in Golding
Looking forward to Matt Golding’s continuing call of the Victorian election race (Cartoon, 4/11).
We’re going to need more than the usual doses of cartoons and other satirical commentary to keep us sane and see us safely through the next few weeks, let alone years.
Jenifer Nicholls, Windsor

Race to stop One Nation
Re. the Victorian election: Be it a race that stops One Nation!
Luise Mock, Tawonga South

It was a cartoon?
Golding’s opinion piece (″⁣The Victorian election race that stops the nation″⁣, 4/11) is not a cartoon!
Peter Price, Southbank

AND ANOTHER THING

The RBA and the Cup
Interest rate rise on Cup Day, and the winners are bookies and banks.
Pepe Salvatore, Fitzroy North

Can anyone explain how increasing interest rates will open the Strait of Hormuz?
Ross Hosking, Blackwood, SA

Thank you RBA for the latest interest rise. How is making loans more expensive not going to increase the cost of living?
Bryan Lewis, St Helena

Which Australia do you live in – the money and wine being spent on a horse race or the hardship of a 0.25 per cent increase in interest rates? Clearly not everyone is poor.
John Rome, Mt Lawley, WA

One can only feel compassion for those poor unfortunates suffering their own particular ″⁣cost-of-living″⁣ crisis at the Cup. Thoughts and prayers to you all.
David Martin, Mt Martha

With the latest interest rate rise Iso look forward to the big drop in imported petrol prices as dictated by the laws of economic science. Anyway must be off to attend evensong at the level playing field.
Thos Puckett, Ashgrove

Why is it that every time we have a rate rise, those with mortgages have to bear the pain? Perhaps it’s time the banks stepped up and held rates rather than pass the pain on to home owners. Aren’t their profits adequate?
Ron Bade, Wheelers Hill

Furthermore
Candidates and their supporters should focus on evidence-based policies and being respectful to the other candidates rather than mudslinging and negative campaigning. Our democracy depends on it.
Sarah Russell, Mt Martha

Donald Trump’s idea of self-reflection: talking about the plumbing at the ″⁣Trump Reflecting Pool″⁣.
Bernd Rieve, Brighton

Finally
Before going back to pen/pencil and paper tests, the teachers might have to teach the kids how to hold a pen/pencil correctly. It is a bit of a lost art for the younger generation.
Marie Nash, Balwyn

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