Does 'Intergenerational Justice' include massive debt? The ODD Cast

Added: 2026-05-13

[00:00:00]you're supposed to have a bad economy with low inflation, at which point you can ease the monetary supply and raise inflation, but also boost the economy.

[00:00:06]Or if you've got a really hot economy, then you're going to have high inflation, and you need to pull the inflation down, which means um raising interest rates and lowering the the money supply, and that'll cool the economy. No one is going to talk about the fact that actually an average full-time Australian income earner who is simply keeping up with inflation will be paying nearly $1,000 more tax next year than what they paid last year.

[00:00:26]There is positioning happening right now. Jim Charmer as the treasurer and Anthony Albani the prime minister are positioning in preparation for this budget. This is a really tricky one. If you believe in Kingsian economic theory, which is the dominant economic theory that most Western countries operate under, I think it's completely wrong. I think we use econ I think the fact that we use Keynesian economic theory explains a lot of the trouble that we're in. However, it is the dominant economic theory. Under Keynesian theory, the economy runs basically with a big thermostat that the government can control via monetary policy. They control it using interest rates. If they lower interest rates, then they increase the money supply because people will borrow more. Increase in the money supply leads to increased economic activity leads to an economic upturn. If the economy gets a bit too hot, which you will know, which you'll see because of inflation supposedly, uh then you can turn the thermostat back down again, which means you raise interest rates, you make borrowing money more expensive.

[00:01:20]people won't borrow money. The money supply contracts and therefore you can slow the economy down. I think it's a absolute load of horseshit. Um I am very much in the Austrian economics bucket.

[00:01:31]Um and essentially the way that we see it is when you turn the thermostat up, i.e. when you make monetary supply more abundant, that's what that is what causes the inflation. It is there's a direct correlation between money supply and inflation. But anyway, that's another story from Jim Chararma's point of view. He's coming at it from a Keynesian economic perspective. he has two competing things that aren't supposed to happen at the same time and that is a high inflationary period ahead with rapidly rising costs due to the cost of shipping and the cost of transport as a result of the the global uh oil supply shock and a contracting economy and we know that the economy is contracting on a per capita basis. It went backwards I think8 of a percent on a per capita basis in 2025 u and it's going to contract again this year on a per capita basis. The only reason the GDP of Australia is growing is because we're importing extra people. So this under Keynesian economic theory, this isn't really meant to happen.

[00:02:24]You're not supposed to have a bad economy and high inflation at the same time. You're supposed to have a bad economy with low inflation, at which point you can ease the monetary supply and raise inflation, but also boost the economy. Or if you've got a really hot economy, then you're going to have high inflation, and you need to pull the inflation down, which means um raising interest rates and lowering the the money supply, and that'll cool the economy. These two things are meant to move in lock step. That's how the whole thermostat theory works, but it doesn't work in reality. So what he actually has under Keynesian economic theory, which like I said, it's wrong, but that's the lens he's looking through is an impossible situation. And we're going to hear a lot of rhetoric from the prime minister and also from Jim Charas all about how difficult this is, how tricky it is, how they're balancing so many competing things. Oh gosh, we've got the domestic concerns here about cost of living and productivity collapsing and all of this, but we've also got the oil supply shock and the inflationary pressures internationally. Oh, how are we going to balance this? Well, thank God that I'm such an incredible treasurer that I have the wisdom to guide this country through these difficult times. That's going to be the tone, right? I'm sorry. [sighs] >> You know I'm right. You hate it, but you know I'm right.

[00:03:34]>> It's B1 B2 with Elbow and Charas, isn't it? Sorry. I I have to look at my screen cuz it's driving me nuts.

[00:03:41]>> That's right. I wouldn't look at me either if I had a choice. Um so so that's going to be the tone. But from his p he's completely wrong, but from his perspective, that's completely real.

[00:03:53]He thinks that he actually has to balance those things with monetary policy and with with government spending. And so what we're going to see is actually a mishmash of things that don't make sense when they're put together. So, for example, what [clears throat] we have is an increase in taxes in the form of bracket creep.

[00:04:09]This is something I've talked about a lot in my videos. Every year, inflation means that our money is worth less, which means we have to get a pay rise just to be being paid the same amount relative to the cost of living. But that payriseise, the the the new amount of money we're getting is all in our highest tax bracket, which means that our taxable income goes up and our actually the the tax as a proportion of our income actually goes up. Let me spell this out for you. for this particular financial year. There is a adjustment to the income tax brackets that is already baked in. It's already been legislated that takes effect on the 1st of July this year. It's a very slight reduction in the lowest tax bracket. I think it's the $18,21 to $45,000 tax bracket if my memory serves me correctly. I'm going off memory here, but it's the lowest of the actual taxable tax brackets. Below that is 0%. And that's going from a 16% tax rate to a 15% tax rate. And that will save you, if you're earning $45,000 a year or more, that'll save you $268.

[00:05:04]Now, it's a lot of numbers, but the number you need to remember is $268. You are going to save $268 because of this tax deduction that has already been legislated or this adjustment to the tax brackets. But the thing is, they're not changing the thresholds. They're not accounting for inflation at all. They're just changing that one by one percentage point. What does that mean? Well, according to the ABS, and I did look this up earlier today, the average, which is higher than the median, but the average full-time worker in Australia is earning $16,000 a year. Now, that's a terrifying number because I tell you what, most of us are getting left behind on that on that number. But $106,000 a year is the average for someone who's working full-time. For them to get a 3.8% pay rise, which would simply be keeping up with inflation from last year, that's all it would be doing. 3.8% 8% uh puts him in something in in the realm of $4 a half or so thousand in or you know just over 4,000 I can't remember exactly dollars in uh increase in pay but all of that is taxed at that individual's highest tax bracket which because they're on $100,000 a year is 30%. So 30% of the new tax of of the new pay is lost immediately in tax. That worked out to be aboutund $1,200 something. I don't remember the number.

[00:06:18]The upshot was this. That $268, which is a number I do most definitely remember that was saved from the adjustment to the tax bracket. Well, that's nice. But that same individual, the average full-time income worker, is going to be paying an extra $1,200, which means the difference is going to be something like $950 more tax that will be paid by an individual who is simply keeping up with inflation. But here's the thing. Jim Charas is going to tell you all about the tax cut.

[00:06:46]He's going to tell you all about how yes, we're changing the tax rate in that tax bracket. It's going to save Australians $238. No one is going to talk about tax brack uh tax bracket creep. No one is going to talk about the fact that actually an average full-time Australian income earner who is simply keeping up with inflation will be paying nearly $1,000 more tax next year than what they paid last year.

[00:07:07]>> I don't I really don't think that messaging is going to do well for Jim because remember how they said we're going to get $275 off our electricity.

[00:07:14]No, no disrespect. I know to some people $258 is a lot of money, but $258 like that's not even our weekly grocery bill.

[00:07:22]That's that's not even a week's worth of rent. It's it's inconsequential. It's such a stupid number that you're like, >> "Yeah, yeah." Yeah. It's insane. It's insulting.

[00:07:32]>> And it's And yeah, it is insulting. If they bring that to market, watch them get absolutely ridiculed. A perfect example of this, you know how Elbow was flying around trying to secure us some more diesel or some more crude >> and he's like, I got us 100 million lers of diesel or crude, whatever it was. And it's like, wait, we used 900 we we use 90 million a day. So, you got us a day in a bits fuel.

[00:07:59]>> Yeah. Yeah, that's right. Now, I'm just trying to find a video.

[00:08:02]>> Sounds like a lot, right?

[00:08:04]>> Just trying to find a video here which is my coverage of bracket creep using um using poker chips.

[00:08:16]Um to field bracket creep. Uh poker chips. I'm trying I'm using Google using Sorry, >> I said I can't see the comments when I'm on my little screen. So, >> ah, okay. Yeah. Um, okay. So, there was a comment asking me to explain it all again. I was just going to say I'm not going to explain it all again. Um, but go to this video, but I can't find the video. So, I have um I have done a video where I used poker chips, different colored poker chips to explain the different tax brackets and how bracket creep works. Um, I don't know how to find it cuz I couldn't when I just had a look at it. Um, but >> time to do a new one.

[00:08:55]>> Yeah, if you can find it, if you can find my bracket creep video, then that'll explain how the whole thing works. But that's only one part of what's happening with the budget.

[00:09:02]Another part of what's happening with the budget is finally they're tackling the outofcontrol growth in the NDIS. Did you read Did you read all of the headlines? Jim Charas is Oh, he's getting tough on the NDIS. Oh my goodness. Did you know that ND >> NDIS recipients are lying awake at night in fear of what Jim Charmers might do to their NDIS? Well, I'm happy to tell you have no fear because the press around this was so bad for Labour, they actually had to already preface what they're going to do. Normally, they try and keep most of it under wraps. They have already said there will be no actual cuts to the NDIS. They're going to cut the growth which is currently running at about 10 to 10.3% peranom.

[00:09:51]Their target is to cut the growth of the NDIS down to 5 to 6% perom which by the way is still higher than inflation. So what they're going to do is they're going to try and keep a certain amount of headlines running about cuts to the NDIS because they know that plays well to voters in the middle who are concerned about the budget. Meanwhile, they're going to be making sure that they don't actually cut the NDIS because that would cost them too many voters from within their own home base, which are a lot of welfare recipients. All right. Whoa, whoa, whoa, whoa. You mean to tell me you've watched all the way to this point, an entire segment of the podcast, and you're still not subscribed? Seriously, what is wrong with you? Just subscribe, like, share, tell everybody. You had fun, right? Tell everybody else. Let them have some fun, too. And listen, buy me some coffee, please. I'm desperate. I'm like, I'm starting to get the shakes. Like, just there's a coffee. There's that one. That scan that coffee please now. Thanks.

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