The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Saturday, July 17, 2010

Pork-barreling, full employment, wage claims, Nov 2007 precedent all risks to August hike

As The Australian reports today:

"Macquarie chief economist Richard Gibbs said the RBA would also closely monitor the current round of enterprise bargaining under way at some major Australian companies for signs of potential future wage inflation.

The minimum wage, frozen in 2009 after the global downturn, was raised by $26 a week in the current financial year.

The current wage inflation rate is 4.1 per cent annualised, but is forecast to rise, particularly in WA because of the mining boom and in South Australia, where the state economy has been rejuvenated.

"On the wages front, we're starting to get a reports on the EBA negotiations pushing on," he said.

"We are seeing it in the resources sector and if we start to see outcomes that are north of 8 to 9 per cent, and with arguable full employment in some states, then the RBA is going to worry about supply-side constraints."

Mr Gibbs said the prospect of higher government spending during an election campaign and the likely flow-through to consumer discretionary spending levels would also be taken into account by the RBA."