![\"Shane](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1793170349_733_057daa8f1b51682d1d002d4c2720328233762dc5.png\")
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Updated October 28, 2026 \u2014 5:08pm,first published 3:51pm<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n No gift articles left<\/p>\n You’ve used all of your gift articles. 3 more will become available on the 1st of every month.<\/p>\n Close<\/p>\n AAA<\/p>\n Christmas is going to be tough enough for those of us with a mortgage or struggling to put food on the table. But an inflation surge affecting gamers is a significant portent of even greater price pressures ahead that is likely to make this Yuletide even tougher for all of us.<\/p>\n As hard as it may be to feel sympathy for those angsting over the price of consoles, the global spike in computer chip prices – and the associated AI building boom – is just another policy problem facing the Reserve Bank, Jim Chalmers and the phalanx of state and territory treasurers.<\/p>\n The latest monthly inflation figures<\/a> from the bureau of statistics all-but guaranteed that the Reserve Bank\u2019s monetary policy committee will inflict another rate rise on the economy on Melbourne Cup Day.<\/p>\n The 4.3 per cent headline inflation rate for September, and 3.6 per cent for the key underlying measure were, as the bank\u2019s deputy governor Andrew Hauser said, too high.<\/p>\n As Hauser and governor Michele Bullock have often reminded Australians, the RBA has only one tool to deal with inflation. Hence its four rate rises this year<\/a>, with the big chance of another that will push the cash rate to an 18-year high of 4.85 per cent next Tuesday.<\/p>\n<\/p>\n By lifting rates, the bank is trying to reduce overall demand across the economy with the stated aim of bringing inflation back to its 2-3 per cent target \u2013 something it has spectacularly failed to do since the final days of the Abbott government \u2013 by the end of next year.<\/p>\n It can definitely be assisted by a reduction in government spending, at the federal and state level.<\/p>\n Chalmers and Finance Minister Katy Gallagher have to use their upcoming budget update to actually reduce spending.<\/p>\n No matter how they characterise the pressures on government services, a budget deficit of $31.5 billion (after a $22.3 billion shortfall in 2025-26) is a loosening of monetary policy during a period of excess demand in the economy.<\/p>\n Related Article Their state counterparts, many of whom seem to believe their job is to ignore their role in the economy while putting out their hands for more federal cash, have to dramatically lift their performances and tighten their belts.<\/p>\n They have to make some tough decisions because of two other issues at play and directly outside government control.<\/p>\n The first is the war started by Donald Trump against Iran<\/a>. Brent crude started the year at $US60 a barrel. On Wednesday, it was $US115.<\/p>\n For the past two months, it has averaged above $US100 a barrel. This spike is feeding through the global economy, from bowsers to PVC pipes to agricultural fertilisers, and is one of the reasons that central banks everywhere are lifting their interest rates.<\/p>\n The second big factor is the one that is hurting the struggling gamers.<\/p>\n The AI construction boom is lifting business investment and pitting tech firms against each other in a semiconductor and chip war. That war has spilt over into the broader economy.<\/p>\n The September inflation figures showed the costs of games and toys have climbed 15.5 per cent over the past 12 months. Only petrol and diesel have gone up by more.<\/p>\n It\u2019s the biggest increase in games and toys on record and is because demand for computer chips in games and consoles is running much, much faster than supply.<\/p>\n Prices for computer equipment, which fell 91 per cent through the first 25 years of this century, have climbed by 6.3 per cent over the past 12 months.<\/p>\n It\u2019s why the price of a Nintendo Switch 2 has climbed by 10 per cent this year. Why the Sony PS5 is up by 20 per cent. A MacBook Neo by 17 per cent. iPhones and iPads are going up by even more.<\/p>\n The inflation figures were released around the same time that SK Hynix, one of the world\u2019s biggest producers of computer chips and semiconductors, released its third quarter earnings report<\/a>.<\/p>\n It showed average selling prices of its key products had climbed by 20 per cent over the past three months and up four-fold since last year. And it\u2019s not going to get any better.<\/p>\n Company chief financial officer Kim Woo-hyun warned huge demand from across the world meant supply shortages were likely to \u201cpersist through to 2030\u201d.<\/p>\n Gamers will have to go back to playing pick-up-sticks or dust-encrusted versions of Squatter if that comes to pass.<\/p>\n Treasury secretary Jenny Wilkinson, who sits on the Reserve Bank\u2019s monetary policy committee, on Wednesday noted that the data centre building boom is competing for labour and resources with government infrastructure projects and the housing sector.<\/p>\n We don\u2019t have to go back far in time to see what that situation means for ongoing inflation. Just look at the early 2000s mining boom.<\/p>\n Chalmers, Gallagher and Anthony Albanese are now clearly on notice that they have to play a larger role in easing demand in the Australian economy to deal with global inflationary pressures.<\/p>\n Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n No gift articles left<\/p>\n You’ve used all of your gift articles. 3 more will become available on the 1st of every month.<\/p>\n Close![\"Chalmers](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/5aac1d05c96b7c8f192a7ffa4ce886721f1317c925417116fef5eb0d9ab5e7cb.jpeg\")
Chalmers and Finance Minister Katy Gallagher have to use their upcoming budget update to actually reduce spending.Aresna Villanueva<\/p>\n![\"Fuel](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/b964e6111097bb491d53d5a9c5a5966d53f59abd.jpeg\")
<\/a><\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/7eb148de29fbf30d941a849f5083fd5558a912c33cb083079cc916b555e022ef.jpeg\")
The price of the next Nintendo Switch is going to soar. <\/p>\n![\"Shane](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1793170352_679_057daa8f1b51682d1d002d4c2720328233762dc5.png\")
Shane Wright<\/a> is a senior economics correspondent for The Sydney Morning Herald and The Age.Connect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Updated October 28, 2026 \u2014 5:08pm,first published 3:51pm Save You have reached your maximum number of saved items.…\n","protected":false},"author":2,"featured_media":943653,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-943652","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/943652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=943652"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/943652\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/943653"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=943652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=943652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=943652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}