Committee for Economic Development of Australia

Economic misery in Australia has returned to near post-pandemic highs, with households facing years of financial pressure.

New analysis from the Committee for Economic Development of Australia shows rising prices and interest rates have wiped out earlier improvements.

The report warns its Economic Misery Index will remain well above recent historical averages until at least the end of twenty twenty-eight.

CEDA's Head of Economics is Liam Dillon.

[news jingle] Economic misery in Australia is on the march.

New analysis from the Committee for Economic Development of Australia has found it's back near its post-pandemic highs and is expected to stay well above recent historical averages until at least the end of twenty twenty-eight.

The report says the misery is being driven by higher prices and interest rates compared with unemployment, which was the biggest contributor through the twenty-tens.

Head of economics at CEDA, Liam Dillon, says productivity growth is the only thing that can bring down all three drivers of misery.

He's just published a book entitled Waves of Plenty: A History of Australian Immigration.

And Melinda Cilento, who's chief executive of the Committee for the Economic Development of Australia, a former chief economist at the Business Council, and is now a member of the Reserve Bank's Monetary Policy Board, where, among other things, she has to vote every few weeks on what'll happen to interest rates.

Congratulations, Melinda, and welcome, Mark.

Thank you, Peter.

But instead, what has happened is the permanent migration program places have been pretty stable, but the number of arrivals each year through the temporary migration channels has been greater than the number leaving, and that has been the principal driver of why we've had relatively high rates of immigration in the two decades since two thousand and six.

Of course, we should always remember that it's something of a vote of confidence in Australia, particularly after COVID, that we had that surge.

How to wrest back more control is what we're about to discuss here on The Economy, Stupid on ABC Radio National with me, Peter Martin, and our guests, Mark Cully, formerly the Chief Economist at the Department of Immigration, and Melinda Cilento, who's Chief Executive of the Committee for the Economic Development of Australia.

[upbeat music] Melinda, the Minister's unveiled a suite of tough measures designed to get him closer to the target, as, uh, hard as that is to directly control.

None of that matters, so long as the economists and bureaucrats are happy with the numbers on the spreadsheet and how they gel with their economic theories.

Now, Bullock told a Committee for Economic Development of Australia event in Sydney, the kind of place where she's comfortable.

But she and the RBI board considered the labour market was too tight.

We needed more people out of work because according to their economic theories, that would ease pressure on inflation.

Who's head of

CEDA, Committee for Economic Development of Australia.

And the treasurer has set The unemployment or the full employment agenda.

Yep.

So we've got this sort of awkward sequencing event at the moment, where in Australia at least, We are in a situation of excess demand and the AI boom is adding to the demand ahead of any potential supply impacts that it might have going forward.

This is what Bullock told the Committee for Economic Development of Australia on Tuesday.

Her comments implicitly cast doubt on the speed of the productivity recovery which underpinned the intergenerational report.

New research by Commonwealth Bank of Australia said AI adoption would be uneven across industries with technology, telecommunications, finance and professional services more likely to reap the productivity benefits.