Economy slipped on a Banana

As the Melbourne Age put it:

FORGET the Swiss-crafted watch or Italian-made shoes as measures of wealth. A peek inside a person's lunchbox will do the trick.

With bananas costing up to $3 a pop, the fruit is more than just a nutritious treat — it's become a status symbol.

Fuel and banana prices have driven Australia’s inflation to an 11-year high.

The annual inflation rate has jumped to an uncomfortable 4 per cent, the highest since 1995…

Prices rose 1.6 per cent in the June quarter alone.

So what kind of economy is it than can be toppled by a banana? Not a banana republic alas, downunder remains a ‘constitutional monarchy’.

Inflation is now a full percentage point above the Reserve Bank's target of between 2 per cent and 3 per cent and the bank's weighted median inflation rate, which allows for one-off price fluctuations, has risen to 3 per cent.

The banana crisis stems from Australia’s Katrina, tropical Cyclone Larry which wiped out much of the northern Australian crop. For some unexplained reason the loss of the banana crop sent prices of other fruit higher as well.

You have to hand it to the Aussies, they obviously love their fruit. But global fuel price are also reflected in the figure, base prices rises and the flow on multiplier to transport of consumer goods.

The bad news for the economy is good news for those longing to see the back of John Howard’s Liberal government.

While a majority of Australians have been opposed to Howard’s dalliance with Bush and the agenda of aggression, they invariably vote on the economic wellbeing which Howard claims to deliver.

Equally, there is no guarantee that the government in waiting will take a substantially different tack on military issues. Only the language will change there, not the substance.

Still, the idea of a government slipping on a banana has a sort of overarching appeal.