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What’s inflation – and how exactly do we measure it?

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/kevin-fox-16896">Kevin Fox</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a></em></p> <p>If the price of a cup of coffee goes up, coffee drinkers are worse off if their income doesn’t increase by at least the same amount – they have less money to spend on other things.</p> <p>But if the prices of many different goods and services all go up at the same time, it can have a significant impact on people’s ability to buy the things they want or need, such as food and paying the rent.</p> <p>This is inflation – a general increase in prices that reduces the purchasing power of money.</p> <p>High inflation is not good for most households, nor is deflation. Low and stable inflation is generally regarded as beneficial for economic prosperity.</p> <p>But how and why do we measure it?</p> <h2>Tracking a ‘basket’ of important items</h2> <p>A range of factors can cause or contribute to rising prices. Demand for certain products can exceed their supply, particularly when there are reductions in taxes or increases in government spending.</p> <p>Disruptions in supply chains and tariffs on imports can also increase prices.</p> <p>But how do we know if prices are going up across the whole economy, or just for some products? One popular solution is to create an aggregate measure of price changes, such as the consumer price index, or CPI for short.</p> <p>The CPI measures changes in the price of products that are important to consumers, as measured by relative expenditures. It’s calculated by the Australian Bureau of Statistics (ABS).</p> <p>The CPI covers a wide range of products that come under the following categories:</p> <ul> <li>food and non-alcoholic beverages</li> <li>alcohol and tobacco</li> <li>clothing and footwear</li> <li>housing</li> <li>furnishings, household equipment and services</li> <li>health</li> <li>transport</li> <li>communication</li> <li>recreation and culture</li> <li>education</li> <li>insurance and financial services.</li> </ul> <p>Currently, the full CPI is constructed on a quarterly basis.</p> <p>The ABS collects prices from sellers – nowadays often electronically, such as transaction data from barcode scanners at supermarket checkouts.</p> <p>If information on quantities sold is available, this will also be used to understand the economic importance of particular products to consumers.</p> <p>The main source of information on expenditure patterns is the <a href="https://www.abs.gov.au/statistics/economy/finance/household-expenditure-survey-australia-summary-results/2015-16">Household Expenditure Survey</a>.</p> <hr /> <p><iframe id="9C4Qr" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/9C4Qr/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <p>All this information from the eight capital cities in Australia is weighted and indexed to create the CPI.</p> <h2>What do we use it for?</h2> <p>The CPI releases attract a lot of attention. They allow us to adjust welfare payments to maintain purchasing power, negotiate wage increases more fairly, and predict how costs are likely to change over time.</p> <p>Most importantly though, the figure is instrumental in determining interest rates.</p> <p>Our central bank – the Reserve Bank of Australia (RBA) – has the legislated responsibility to keep inflation between 2-3% per year. But because it cannot control things like taxes and government spending, the key way it does this is by adjusting interest rates.</p> <hr /> <p><iframe id="CSV4V" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/CSV4V/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <p>The Reserve Bank sets the target cash rate – the interest rate on overnight loans between banks. Increasing this rate increases the costs to banks of borrowing.</p> <p>Banks pass this cost on, charging their customers higher interest rates. By increasing the cost of mortgage repayments and discouraging consumers from borrowing money for spending, this reduces consumer demand for products and can help lower inflation.</p> <h2>Headline versus underlying</h2> <p>The CPI is unlikely to be the inflation rate faced by any one individual – we all spend differently. It’s even possible to construct your own inflation rate, if you keep thorough spending records and understand the index methodology.</p> <p>But the CPI is not the only measure of inflation that is produced. It is often referred to “headline” inflation, to contrast it with measures of “underlying” inflation. Underlying inflation can better represent persistent domestic inflationary pressures which may need a policy response.</p> <p>Why can’t we always trust headline CPI? Some items prone to weather conditions or supply shocks, such as fruit and petrol, can face sharp, volatile price movements that skew the headline figure. Excluding them from the calculation can reveal underlying inflation conditions.</p> <p>Alternatives take a statistical approach to adjusting the headline rate, such as the trimmed-mean and weighted median estimates produced by the ABS and used by the RBA.</p> <p>By excluding certain items, these measures don’t reflect full changes in the cost of living faced by households – but neither does headline CPI.</p> <h2>Other ‘flations</h2> <p>You’ll often hear other inflation-related terms bandied about in the news. Here’s a helpful guide to a few of them:</p> <p><strong>Deflation</strong></p> <p>This is negative inflation. This can be bad as consumers will delay purchases as they wait for prices to fall further, leading to economic stagnation.</p> <p><strong>Disinflation</strong></p> <p>Inflation is still positive (overall prices are going up), but the rate of inflation decreases. If inflation was 4% and falls to 3%, this is disinflation, not deflation.</p> <p><strong>Stagflation</strong></p> <p>The economy simultaneously has stagnant growth, high inflation and high unemployment. This is rare, but famously happened during the oil crisis of the 1970s.</p> <p><strong>Hyperinflation</strong></p> <p>The annual rate of inflation in Argentina is currently 271.5%. In 2018 in Venezuela, it was over 1,000,000% per month. This is hyperinflation. The costs of this are enormous.</p> <p>Even with moderately high inflation, consumers are unable to differentiate relative price changes from general price changes in their consumption choices. With hyperinflation, money becomes virtually worthless.</p> <hr /> <p><em>This article is part of The Conversation’s “<a href="https://theconversation.com/au/topics/business-basics-157462">Business Basics</a>” series where we ask experts to discuss key concepts in business, economics and finance.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/235673/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></em></p> <p><em><a href="https://theconversation.com/profiles/kevin-fox-16896">Kevin Fox</a>, Professor, School of Economics; Director of the Centre for Applied Economic Research, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a></em></p> <p><em>Image </em><em>credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/whats-inflation-and-how-exactly-do-we-measure-it-235673">original article</a>.</em></p> </div>

Money & Banking

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Cheaper mortgages, tamed inflation and even higher home prices: how 29 forecasters see Australia’s economic recovery in 2024-25

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p>Australia’s top economic forecasters expect the Reserve Bank to start cutting interest rates by March next year, taking 0.35 points of its cash rate by June.</p> <p>If passed on in full, the cut would take $125 off the monthly cost of servicing a $600,000 variable-rate mortgage, with more to come.</p> <p>The panel of 29 forecasters assembled by The Conversation expects a further cut of 0.3 points by the end of 2025. This would take the cash rate down from the current 4.35% to 3.75% and produce a total cut in monthly payments on a $600,000 mortgage of $335.</p> <p>The forecasts were produced <em>after</em> last week’s news of a higher than expected <a href="https://theconversation.com/australias-inflation-rate-jumps-to-4-putting-an-rba-rate-rise-back-on-the-agenda-233331">monthly consumers price index</a>.</p> <p>Several of those surveyed revised up their predictions for interest rates in the year ahead, while continuing to predict cuts by mid next year.</p> <p>Only two expect higher rates by mid next year. Only four expect no change.</p> <hr /> <p><iframe id="6eIe8" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/6eIe8/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Now in its sixth year, The Conversation survey draws on the expertise of leading forecasters in 22 Australian universities, think tanks and financial institutions – among them economic modellers, former Treasury and Reserve Bank officials and a former member of the Reserve Bank board.</p> <p>Eight of the 29 expect the first cut to come this year, by either November or December.</p> <p>One of them is Luci Ellis, who was until recently assistant governor (economic) at the Reserve Bank and is now at Westpac. She and her team are forecasting three interest rate cuts by the middle of next year, taking the cash rate from 4.35% to 3.6%.</p> <h2>Reserve Bank a ‘reluctant hiker’</h2> <p>Ellis says inflation isn’t falling fast enough for the bank to be confident of being able to cut before November. But after that, even if inflation isn’t completely back within the bank’s target band but is merely moving towards it, a “forward-looking” board would want to start easing interest rates.</p> <p>Another forecaster, Su-Lin Ong of RBC Capital Markets, says in her view the bank should hike at its next board meeting in August after the release of figures likely to show inflation is still too high. But she says the bank is a “reluctant hiker” and keen to keep unemployment low.</p> <p>Although several panellists expect the Reserve Bank to hike rates in the months ahead, almost all expect rates to be lower in a year’s time than they are today.</p> <hr /> <p><iframe id="2xF3M" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/2xF3M/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>The panel expects inflation to be back within the Reserve Bank’s 2-3% target band by June next year, and to be close to it (3.3%) by the end of this year.</p> <p>Twelve of the panel expect inflation to climb further when the official figures are released at the end of this month, but none expect it to climb further beyond that. And all expect inflation to be lower by the end of the financial year than it is today.</p> <p>One, Percy Allan, a former head of the NSW Treasury, cautions that the tax cuts and other government support measures due to start this month run the risk of boosting spending and falling progress on inflation.</p> <hr /> <p><iframe id="LGJa7" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/LGJa7/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>The panel expects wages growth to fall from 4% to 3.5% over the year ahead, contributing to downward pressure on inflation, but to remain higher than prices growth, producing gains in so-called <a href="https://www.investopedia.com/terms/r/realincome.asp">real wages</a>.</p> <p>It expects wages growth to moderate further, to 3.2%, in 2025-26.</p> <hr /> <p><iframe id="iV7mZ" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/iV7mZ/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Consumer spending is expected to remain unusually weak, growing by only 1.7% in real terms over the next 12 months, up from 1.3% in the latest national accounts.</p> <p>Mala Raghavan, from the University of Tasmania, said even though inflation was falling, previous price rises meant the prices of essentials remained high. AMP chief economist Shane Oliver expected the boost from the <a href="https://treasury.gov.au/tax-cuts">Stage 3 tax cuts</a> to be offset by the depressing effect of a weaker labour market.</p> <h2>Unemployment to climb modestly</h2> <p>The panel expects Australia’s unemployment rate to climb steadily from its present historically low 4% to 4.4%.</p> <p>Moodys Analytics economist Harry Murphy Cruise said although the increase wasn’t big, the effect on pay packets would be bigger. Employers were shaving hours and easing back on hiring rather than letting go of workers.</p> <hr /> <p><iframe id="SM8PI" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/SM8PI/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Panellists expect China’s economic growth to slip from 5.3% to 5% and US growth to slip from 2.9% to 2.4%.</p> <p>Australia’s economic growth is expected to climb from the present very low 1.1% to 1.3% by the end of this year and to 2% by the end of next year. Although none of the panel are forecasting a recession, most of those who offered an opinion said if there was a recession, it would start this year when the economy was weak.</p> <p>Some said we might later discover that we have been in a recession if the very weak economic growth of 0.1% recorded in the March quarter is revised and turns negative when updated figures are released in September.</p> <hr /> <p><iframe id="3I49o" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/3I49o/1/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Home prices are expected to continue to climb notwithstanding economic weakness. Sydney prices are expected to increase a further 5% in the year ahead after climbing 7.4% in the year to May. Melbourne prices are expected to rise a further 2.8% after climbing 1.8% in the year to May.</p> <p>Percy Allan said Sydney had fewer homes available than Melbourne, and Victoria’s decisions to extend land tax and boost rights for tenants had upset landlords, many of whom were offloading their holdings.</p> <h2>Home prices to climb further</h2> <p>Julie Toth, chief economist at property information firm PEXA, said rapid population growth was colliding with an ongoing decline in household size since COVID. At the same time, fewer new homes were being commissioned and long delays and high construction costs were also keeping supply tight.</p> <hr /> <p><iframe id="JzLaY" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/JzLaY/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>The panel expects non-mining business investment to continue to climb in the year ahead, by 5.2%, down from 6.9%.</p> <p>It expects the Australian share market to climb by a further 5.6%</p> <p><strong>Read the answers on <a href="https://cdn.theconversation.com/static_files/files/3350/2024-25_The_Conversation_AU_Forecasting_Survey.pdf">PDF</a>, download as <a href="https://cdn.theconversation.com/static_files/files/3351/2024-25_The_Conversation_AU_forecasting_survey.xlsx?1719478737">XLS</a></strong></p> <hr /> <h2>The Conversation’s Economic Panel</h2> <p><em>Click on economist to see full profile.</em></p> <p><iframe id="tc-infographic-1066" class="tc-infographic" style="border: none;" src="https://cdn.theconversation.com/infographics/1066/93fb29ba32e178ec2dcda111f014a50cf7ea1f49/site/index.html" width="100%" height="400px" frameborder="0"></iframe><!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/233244/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/cheaper-mortgages-tamed-inflation-and-even-higher-home-prices-how-29-forecasters-see-australias-economic-recovery-in-2024-25-233244">original article</a>.</em></p> </div>

Money & Banking

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How to be kind to yourself (without going to a day spa)

<p><em><a href="https://theconversation.com/profiles/lydia-brown-179583">Lydia Brown</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a></em></p> <p>“I have to be hard on myself,” Sarah told me in a recent telehealth psychology session. “I would never reach my potential if I was kind and let myself off the hook.”</p> <p>I could empathise with this fear of self-compassion from clients such as Sarah (not her real name). From a young age, we are taught to be kind to others, but self-kindness is never mentioned.</p> <p>Instead, we are taught success hinges on self-sacrifice. And we need a healthy inner critic to bully us forward into becoming increasingly better versions of ourselves.</p> <p>But <a href="https://journals.sagepub.com/doi/abs/10.1177/0146167212445599">research shows</a> there doesn’t have to be a trade-off between self-compassion and success.</p> <p>Self-compassion can help you reach your potential, while supporting you to face the inevitable stumbles and setbacks along the way.</p> <h2>What is self-compassion?</h2> <p><a href="https://self-compassion.org/">Self-compassion</a> has <a href="https://www.tandfonline.com/doi/abs/10.1080/15298860309027">three</a> key ingredients.</p> <p><strong>1. Self-kindness</strong></p> <p>This involves treating yourself with the same kindness you would extend towards a good friend – via your thoughts, feelings and actions – especially during life’s difficult moments.</p> <p>For instance, if you find yourself fixating on a minor mistake you made at work, self-kindness might involve taking a ten-minute walk to shift focus, and reminding yourself it is OK to make mistakes sometimes, before moving on with your day.</p> <p><strong>2. Mindfulness</strong></p> <p>In this context, mindfulness involves being aware of your own experience of stress or suffering, rather than repressing or avoiding your feelings, or over-identifying with them.</p> <p>Basically, you must see your stress with a clear (mindful) perspective before you can respond with kindness. If we avoid or are consumed by our suffering, we lose perspective.</p> <p><strong>3. Common humanity</strong></p> <p>Common humanity involves recognising our own experience of suffering as something that unites us as being human.</p> <p>For instance, a sleep-deprived parent waking up (for the fourth time) to feed their newborn might choose to think about all the other parents around the world doing exactly the same thing – as opposed to feeling isolated and alone.</p> <h2>It’s not about day spas, or booking a manicure</h2> <p>When Sarah voiced her fear that self-compassion would prevent her success, I explained self-compassion is distinct from self-indulgence.</p> <p>“So is self-compassion just about booking in more mani/pedis?” Sarah asked.</p> <p>Not really, I explained. A one-off trip to a day spa is unlikely to transform your mental health.</p> <p>Instead, self-compassion is a flexible <a href="https://link.springer.com/chapter/10.1007/978-3-031-22348-8_7">psychological resilience factor</a> that shapes our thoughts, feelings and actions.</p> <p>It’s associated with a suite of benefits to our <a href="https://iaap-journals.onlinelibrary.wiley.com/doi/abs/10.1111/aphw.12051">wellbeing</a>, <a href="https://www.tandfonline.com/doi/abs/10.1080/15298868.2011.639548">relationships</a> and <a href="https://www.tandfonline.com/doi/abs/10.1080/17437199.2019.1705872">health</a>.</p> <h2>What does the science say?</h2> <p>Over the past 20 years, we’ve learned self-compassionate people enjoy a wide range of benefits. They tend to be <a href="https://iaap-journals.onlinelibrary.wiley.com/doi/abs/10.1111/aphw.12051">happier</a> and have <a href="https://doi.org/10.1016/j.cpr.2012.06.003">fewer psychological symptoms</a> of distress.</p> <p>Those high on self-compassion <a href="https://journals.sagepub.com/doi/abs/10.1177/0146167212445599">persevere</a> following a failure. They say they are more motivated to overcome a personal weakness than those low on self-compassion, who are more likely to give up.</p> <p>So rather than feeling trapped by your inadequacies, self-compassion encourages a <a href="https://hbr.org/2018/09/give-yourself-a-break-the-power-of-self-compassion">growth mindset</a>, helping you reach your potential.</p> <p>However, self-compassion is not a panacea. It will not change your life circumstances or somehow make life “easy”. It is based on the premise that life is hard, and provides practical tools to cope.</p> <h2>It’s a factor in healthy ageing</h2> <p>I research menopause and healthy ageing and am especially interested in the value of self-compassion through menopause and in the second half of life.</p> <p>Because self-compassion becomes important during life’s challenges, it can help people navigate physical symptoms (for instance, <a href="https://www.sciencedirect.com/science/article/pii/S0378512214001649?via%3Dihub">menopausal hot flushes</a>), life transitions such as <a href="https://journals.sagepub.com/doi/10.1177/0956797611429466">divorce</a>, and <a href="https://link.springer.com/chapter/10.1007/978-3-031-22348-8_7">promote healthy ageing</a>.</p> <p>I’ve also teamed up with researchers at <a href="https://www.autismspectrum.org.au/">Autism Spectrum Australia</a> to explore self-compassion in autistic adults.</p> <p>We found autistic adults report significantly <a href="https://link.springer.com/article/10.1007/s10803-022-05668-y">lower levels</a> of self-compassion than neurotypical adults. So we developed an online <a href="https://www.autismspectrum.org.au/blog/new-online-self-compassion-program-for-autistic-adults">self-compassion training program</a> for this at-risk population.</p> <h2>Three tips for self-compassion</h2> <p>You <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/jclp.21923">can learn</a> self-compassion with these three exercises.</p> <p><strong>1. What would you say to a friend?</strong></p> <p>Think back to the last time you made a mistake. What did you say to yourself?</p> <p>If you notice you’re treating yourself more like an enemy than a friend, don’t beat yourself up about it. Instead, try to think about what you might tell a friend, and direct that same friendly language towards yourself.</p> <p><strong>2. Harness the power of touch</strong></p> <p>Soothing human touch <a href="https://www.frontiersin.org/journals/psychiatry/articles/10.3389/fpsyt.2020.555058/full">activates</a> the parasympathetic “relaxation” branch of our nervous system and counteracts the fight or flight response.</p> <p>Specifically, self-soothing touch (for instance, by placing both hands on your heart, stroking your forearm or giving yourself a hug) <a href="https://www.sciencedirect.com/science/article/pii/S2666497621000655">reduces</a> cortisol responses to psychosocial stress.</p> <p><strong>3. What do I need right now?</strong></p> <p>Sometimes, it can be hard to figure out exactly what self-compassion looks like in a given moment. The question “what do I need right now” helps clarify your true needs.</p> <p>For example, when I was 37 weeks pregnant, I woke up bolt awake one morning at 3am.</p> <p>Rather than beating myself up about it, or fretting about not getting enough sleep, I gently placed my hands on my heart and took a few deep breaths. By asking myself “what do I need right now?” it became clear that listening to a gentle podcast/meditation fitted the bill (even though I wanted to addictively scroll my phone).<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223194/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/lydia-brown-179583"><em>Lydia Brown</em></a><em>, Senior Lecturer in Psychology, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-to-be-kind-to-yourself-without-going-to-a-day-spa-223194">original article</a>.</em></p>

Caring

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Mortgage and inflation pain to ease, but only slowly: how 31 top economists see 2024

<p><em><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p>A panel of 31 leading economists assembled by The Conversation sees no cut in interest rates before the middle of this year, and only a slight cut by December, enough to trim just $55 per month off the cost of servicing a $600,000 variable-rate mortgage.</p> <p>The <a href="https://theconversation.com/au/topics/conversation-economic-survey-81354">panel</a> draws on the expertise of leading forecasters at 28 Australian universities, think tanks and financial institutions – among them economic modellers, former Treasury, International Monetary Fund and Reserve Bank officials, and a former member of the Reserve Bank board.</p> <p>Its forecasts paint a picture of weak economic growth, stagnant consumer spending, and a continuing per-capita recession.</p> <p>The average forecast is for the Reserve Bank to delay cutting its cash rate, keeping it near its present 4.35% until at least the middle of the year, and then cutting it to <a href="https://cdn.theconversation.com/static_files/files/3028/The_Conversation_AU_February_2024_Economic_Survey.pdf">4.2%</a> by December 2024, 3.6% by December 2025 and 3.4% by December 2026.</p> <hr /> <p><iframe id="xV821" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/xV821/4/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>The gentle descent would deliver only three interest rate cuts by the end of next year, cutting $274 from the monthly cost of servicing a $600,000 mortgage and leaving the cost around $1,100 higher than it was before rates began climbing.</p> <p>Six of the experts surveyed expect the Reserve Bank to increase rates further in the first half of the year, while 20 expect no change and three expect a cut.</p> <p>Former head of the NSW treasury Percy Allan said while the Reserve Bank would push up rates in the first half of the year to make sure inflation comes down, it would be forced to relent in the second half of the year as unemployment grows and the economy heads towards recession.</p> <p>Warwick McKibbin, a former member of the Reserve Bank board, said the board would push up rates once more in the first half of the year as insurance against inflation before leaving them on hold.</p> <p>Former Reserve Bank of Australia chief economist Luci Ellis, who is now chief economist at Westpac, expects the first cut no sooner than September, believing the board will wait to see clear evidence of further falls in inflation and economic weakening before it moves.</p> <hr /> <p><iframe id="ZQgno" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/ZQgno/7/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <h2>Inflation to keep falling, but more gradually</h2> <p>Today’s <a href="https://www.rba.gov.au/">Reserve Bank board meeting</a> will consider an inflation rate that has come down <a href="https://theconversation.com/the-7-new-graphs-that-show-inflation-falling-back-to-earth-220670">faster than it expected</a>, diving from 7.8% to 4.1% in the space of a year.</p> <p>The newer more experimental monthly measure of inflation was just <a href="https://theconversation.com/the-7-new-graphs-that-show-inflation-falling-back-to-earth-220670">3.4%</a> in the year to December, only points away from the Reserve Bank’s target of 2–3%.</p> <p>But the panel expects the descent to slow from here on, with the standard measure taking the rest of the year to fall from 4.1% to 3.5% and not getting below 3% until <a href="https://cdn.theconversation.com/static_files/files/3027/The_Conversation_AU_2024_economic_survey.pdf">late 2025</a>.</p> <p>Economists Chris Richardson and Saul Eslake say while inflation will keep heading down, the decline might be slowed by supply chain pressures from the conflict in the Middle East and the boost to incomes from the <a href="https://theconversation.com/albanese-tax-plan-will-give-average-earner-1500-tax-cut-more-than-double-morrisons-stage-3-221875">tax cuts</a> due in July.</p> <hr /> <p><iframe id="buC9f" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/buC9f/6/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <h2>Slower wage growth, higher unemployment</h2> <p>While the panel expects wages to grow faster than the consumer price index, it expects wages growth to slip from around <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release">4%</a> in 2023 to 3.8% in 2004 and 3.4% in 2025 as higher unemployment blunts workers’ bargaining power.</p> <p>But the panel doesn’t expect much of an increase in unemployment. It expects the unemployment rate to climb from its present <a href="https://www.datawrapper.de/_/w9h9f/">3.9%</a> (which is almost a long-term low) to 4.3% throughout 2024, and then to stay at about that level through 2025.</p> <p>All but two of the panel expect the unemployment rate to remain below the range of 5–6% that was typical in the decade before COVID.</p> <p>Economic modeller Janine Dixon said the “new normal” between 4% and 5% was likely to become permanent as workers embraced flexible arrangements that allow them to stay in jobs in a way they couldn’t before.</p> <p>Cassandra Winzar, chief economist at the Committee for the Economic Development of Australia, said the government’s commitment to full employment was one of the things likely to keep unemployment low, along with Australia’s demographic transition as older workers leave the workforce.</p> <hr /> <p><iframe id="pAioo" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/pAioo/2/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <h2>Slower economic growth, per-capita recession</h2> <p>The panel expects very low economic growth of just 1.7% in 2024, climbing to 2.3% in 2025. Both are well below the 2.75% the treasury believes the economy is <a href="https://treasury.gov.au/speech/the-economic-and-fiscal-context-and-the-role-of-longitudinal-data-in-policy-advice">capable of</a>.</p> <p>All but one of the forecasts are for economic growth below the present population growth rate of 2.4%, suggesting that the panel expects population growth to exceed economic growth for the second year running, extending Australia’s so-called <a href="https://theconversation.com/were-in-a-per-capita-recession-as-chalmers-says-gdp-steady-in-the-face-of-pressure-212642">per capita recession</a>.</p> <hr /> <p><iframe id="TO8bP" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/TO8bP/4/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>The lacklustre forecasts raise the possibility of what is commonly defined as a “technical recession”, which is two consecutive quarters of negative economic somewhere within a year of mediocre growth.</p> <p>Taken together, the forecasters assign a 20% probability to such a recession in the next two years, which is lower than in <a href="https://theconversation.com/two-more-rba-rate-hikes-tumbling-inflation-and-a-high-chance-of-recession-how-our-forecasting-panel-sees-2023-24-208477">previous surveys</a>.</p> <p>But some of the individual estimates are high. Percy Allen and Stephen Anthony assign a 75% and 70% chance to such a recession, and Warren Hogan a 50% chance.</p> <p>Hogan said when the economic growth figures for the present quarter get released, they are likely to show Australia is in such a recession at the moment.</p> <p>The economy barely grew at all in the September quarter, expanding just <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release">0.2%</a> and was likely to have shrunk in the December quarter and to shrink further in this quarter.</p> <p>The panel expects the US economy to grow by 2.1% in the year ahead in line with the <a href="https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024">International Monetary Fund</a> forecast, and China’s economy to grow 5.4%, which is lower than the International Monetary Fund’s forecast.</p> <h2>Weaker spending, weak investment</h2> <p>The panel expects weak real household spending growth of just 1.2% in 2014, supported by an ultra-low household saving ratio of close to zero, down from a recent peak of 19% in September 2021.</p> <p>Mala Raghavan of The University of Tasmania said previous gains in income, rising asset prices and accumulated savings were being overwhelmed by high inflation and rising interest rates.</p> <p>Luci Ellis expected the squeeze to continue until tax and interest rate cuts in the second half of the year, accompanied by declining inflation.</p> <p>The panel expects non-mining investment to grow by only 5.1% in the year ahead, down from 15%, and mining investment to grow by 10.2%, down from 22%.</p> <p>Johnathan McMenamin from Barrenjoey said private and public investment had been responsible for the lion’s share of economic growth over the past year and was set to plateau and fade as a driver of growth.</p> <h2>Home prices to climb, but more slowly</h2> <p>The panel expects home price growth of 4.6% in Sydney during 2024 (down from 11.4% in 2024) and 3.1% in Melbourne, down from 3.9% in 2024.</p> <p>ANZ economist Adam Boyton said decade-low building approvals and very strong population growth should keep demand for housing high, outweighing a drag on prices from high interest rates. While high interest rates have been restraining demand, they are likely to ease later in the year.</p> <hr /> <p><iframe id="syk8x" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/syk8x/6/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>In other forecasts, the panel expects the Australian dollar to stay below US$0.70, closing the year at US$0.69, it expects the ASX 200 share market index to climb just 3% in 2024 after climbing 7.8% in 2023, and it expects a small budget surplus of A$3.8 billion in 2023-24, followed by a deficit of A$13 billion in 2024-25.</p> <p>The budget surplus should be supported by a forecast iron ore price of US$114 per tonne in December 2024, down from the present US$130, but well up on the <a href="https://budget.gov.au/content/myefo/index.htm">US$105</a> assumed in the government’s December budget update.</p> <p><a href="https://theconversation.com/profiles/peter-martin-682709"><em>Peter Martin</em></a><em>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/mortgage-and-inflation-pain-to-ease-but-only-slowly-how-31-top-economists-see-2024-218927">original article</a>.</em></p>

Money & Banking

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Fighting inflation doesn’t directly cause unemployment – but that’s still the most likely outcome

<p>You may have seen the news: in its attempts to tackle inflation, the Reserve Bank is going to increase unemployment. The idea can even seem to come right from the mouths of experts, including the bank’s governor, Adrian Orr. <a href="https://www.nzherald.co.nz/business/adrian-orr-beating-inflation-will-mean-higher-unemployment/WO3WLQQUGWEC5NVK3AQTR2BN5A/">Speaking recently</a> to an industry conference, he said:</p> <blockquote> <p>Returning to low inflation will, in the near term, constrain employment growth and lead to a rise in unemployment.</p> </blockquote> <p>Similar sentiments have been expressed by <a href="https://businessdesk.co.nz/article/opinion/inflation-taming-the-costs-are-becoming-more-visible">independent economists</a> and <a href="https://thespinoff.co.nz/business/31-10-2022/the-big-banks-just-cant-stop-winning">commentators</a>.</p> <p>But is it as simple as it might appear? What is the relationship between inflation and unemployment, and is it inevitable that reducing one will lead to an increase in the other?</p> <blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Unemployment rate holds steady at 3.3%, wages rise strongly - Stats NZ <a href="https://t.co/IQOPBaNYTn">https://t.co/IQOPBaNYTn</a></p> <p>— RNZ News (@rnz_news) <a href="https://twitter.com/rnz_news/status/1587568087808999424?ref_src=twsrc%5Etfw">November 1, 2022</a></p></blockquote> <p><strong>Historic highs and lows</strong></p> <p>Like other developed countries, New Zealand has been going through a period of historically high inflation. The latest figures, for the September quarter of 2022, show an annual <a href="https://www.stats.govt.nz/news/annual-inflation-at-7-2-percent/">rise of 7.2%</a>, only slightly lower than the 7.3% recorded for the June quarter.</p> <p>Inflation is the highest it has been since 1990. The story is similar across the OECD, where inflation averages <a href="https://www.oecd.org/economy/consumer-prices-oecd-updated-4-october-2022.htm">10.3%</a>, including <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2022">8.8%</a> in the UK and <a href="https://www.bls.gov/news.release/cpi.nr0.htm">8.2%</a> in the US.</p> <p>At the same time, New Zealand is experiencing a period of very low unemployment, with a <a href="https://www.stats.govt.nz/news/unemployment-rate-at-3-3-percent">rate of just 3.3%</a> for September 2022, following 3.2% in the June quarter. These are near-record lows, and the rate has not been below 4% since mid-2008.</p> <p>So, right now New Zealand is in a period of historically low unemployment and historically high inflation. At first glance, that might suggest that in order to return to low inflation, we may inevitably experience higher unemployment.</p> <p><strong>The Phillips Curve</strong></p> <p>The idea that inflation and unemployment have a negative relationship (when one increases, the other decreases, and vice versa) dates back to work by New Zealand’s most celebrated economist, <a href="https://en.wikipedia.org/wiki/William_Phillips_(economist)">A.W. (Bill) Phillips</a>.</p> <p>While working at the London School of Economics in the 1950s, Phillips wrote a <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0335.1958.tb00003.x">famous paper</a> that used UK data from 1861 to 1957 and showed a negative relationship between unemployment and wage increases.</p> <p>Subsequent work by economics Nobel Prize winners <a href="https://www.econlib.org/library/Enc/bios/Samuelson.html">Paul Samuelson</a> and <a href="https://www.nobelprize.org/prizes/economic-sciences/1987/solow/facts/">Robert Solow</a> extended Phillips’ work to show a negative relationship between price inflation and unemployment. We now refer to this relationship as the “Phillips Curve”.</p> <p>However, even though this relationship between inflation and unemployment has been demonstrated with various data sources, and for various time periods for different countries, it is not a causal relationship.</p> <p>Lower inflation doesn’t by itself cause higher unemployment, even though they are related. To see why, it’s worth thinking about the mechanism that leads to the observed relationship.</p> <blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/LISTEN?src=hash&amp;ref_src=twsrc%5Etfw">#LISTEN</a> 🔊 The Finance Minister says addressing inflation without increasing unemployment is a difficult balancing act.</p> <p>📎 <a href="https://t.co/CfaopcqjGv">https://t.co/CfaopcqjGv</a> <a href="https://t.co/1gMNat2G99">pic.twitter.com/1gMNat2G99</a></p> <p>— Morning Report (@NZMorningReport) <a href="https://twitter.com/NZMorningReport/status/1587893034351411200?ref_src=twsrc%5Etfw">November 2, 2022</a></p></blockquote> <p><strong>Collateral damage</strong></p> <p>If the Reserve Bank raises the official cash rate, commercial banks follow by raising their interest rates. That makes borrowing more expensive. Higher interest rates mean banks will lend less money. With less money chasing goods and services in the economy, inflation will start to fall.</p> <p>Of course, this is what the Reserve Bank wants when it raises the cash rate. Its <a href="https://www.parliament.nz/en/pb/library-research-papers/research-papers/monetary-policy-and-the-policy-targets-agreement/">Policy Targets Agreement</a> with the government states that inflation must be kept between 1% and 3%. So when inflation is predicted to be higher, the bank acts to lower it.</p> <p>At the same time, higher interest rates increase mortgage payments, leaving households and consumers with less discretionary income, and so consumer spending falls. Along with reduced business spending, this reduces the amount of economic activity. Businesses therefore need fewer workers, and so employment falls.</p> <p>So, while the Reserve Bank raises interest rates to combat inflation, those higher interest rates also slow down the economy and increase unemployment. Higher unemployment is essentially collateral damage arising from reducing inflation.</p> <p><strong>Great expectations</strong></p> <p>That’s not the end of the story, though. After its 1960s heyday, the Phillips Curve was criticised by economists on theoretical grounds, and for its inability to explain the “stagflation” (high unemployment and high inflation) experienced in the 1970s.</p> <p>For example, <a href="https://www.econlib.org/library/Enc/bios/Friedman.html">Milton Friedman</a> argued there is actually no trade-off between inflation and unemployment, because workers and businesses take inflation into account when negotiating employment contracts.</p> <p>Workers’ and employers’ expectations about future inflation is key. Friedman argued that, because inflation is expected, workers will have already built it into their wage demands, and businesses won’t change the amount of workers they employ.</p> <p>Friedman’s argument would suggest that, aside from some short-term deviations, the economy will typically snap back to a “natural” rate of unemployment, with an inflation rate that only reflects workers’ and businesses’ expectations.</p> <p><strong>Symptom or cause?</strong></p> <p>Can we rely on this mechanism to avoid higher unemployment as the Reserve Bank increases interest rates to combat inflation?</p> <p>It seems unlikely. Workers would first have to expect the Reserve Bank’s actions will lower inflation, and respond by asking for smaller wage increases. Right now, however, consumer inflation expectations <a href="https://www.rbnz.govt.nz/statistics/series/households/household-inflation-expectations">remain high</a> and wage growth is at <a href="https://www.nzherald.co.nz/business/latest-job-numbers-out-unemployment-flatlining-near-record-lows/O4NDE3Y4W5GMHGDRDDS733LX7A/">record levels</a>.</p> <p>So, we can probably expect unemployment to move upwards as the Reserve Bank’s inflation battle continues. Not because lower inflation <em>causes</em> higher unemployment, but because worker and consumer expectations take time to reflect the likelihood of lower future inflation due to the Reserve Bank’s actions.</p> <p>And since workers negotiate only infrequently with employers, there is an inevitable lag between inflation expectations changing and this being reflected in wages. Alas, for ordinary households, there is no quick and easy way out of this situation.</p> <p><em>Writen by Michael P. Cameron. Republished with permission from <a href="https://theconversation.com/fighting-inflation-doesnt-directly-cause-unemployment-but-thats-still-the-most-likely-outcome-193617" target="_blank" rel="noopener">The Conversation</a>.</em></p> <p><em><!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. -->Image: Getty Images<img src="https://counter.theconversation.com/content/193617/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /></em><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p>

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Inflation is 2022’s boogeyman. How can we address rising living costs, while helping bring it down?

<p>An entire generation has never experienced life with high inflation. But that is set to change. Countries like Australia, Canada, the United Kingdom and others are <a href="https://www.weforum.org/agenda/2022/06/inflation-stats-usa-and-world/">reporting rising inflation</a>. In New Zealand, inflation has climbed to its <a href="https://www.stuff.co.nz/business/129293267/annual-inflation-hits-73">highest rate in 32 years</a>. Our collective inexperience with the scourge of inflation, and how to solve it, could be a real problem.</p> <p>For those experiencing high inflation for the first time, it is helpful to understand just what economists and politicians are talking about.</p> <p>Inflation is a sustained increase in overall prices. Not everything goes up by the same amount but when people are having to pay more each week, month or year for the same basket of goods and services then that’s inflation.</p> <p>Inflation is harmful in many ways. It works like rust – slowly eating away at the value of your money. Inflation affects all of us. It doesn’t matter what the face value of your money is – what matters is the quantity of goods and services you can buy with it.</p> <p><strong>The real value of money</strong></p> <p>One easy way to understand inflation is to look at what you can buy for the money you have.</p> <p>Suppose at the start of the year your $100 note bought you 20 cups of coffee. However, inflation pushes coffee from $5 to $6 a cup. By the end of the year, your same $100 only buys you 16 cups of coffee. The face value of your money is the same but its real value (in terms of the number of coffees you can buy) has gone down. Your money is worth less now than a year ago.</p> <p>This rise in costs hurts wage earners who have limited opportunity to renegotiate their wages.</p> <p>Inflation also hurts those on fixed incomes such as beneficiaries and superannuitants who only receive periodic adjustments.</p> <p>Rising inflation hurts savers who find the real value of their savings going down if returns on savings don’t keep up with inflation – which they currently aren’t.</p> <p>Inflation can benefit borrowers who have the same debt at the end of the year but the value of that debt is lower in real terms. Providing there is at least some inflation adjustment to their income, borrowers have to sacrifice less to repay their debt.</p> <p>While this sounds good, it’s not. It encourages poor borrowing decisions and discourages savings.</p> <figure class="align-center "><img src="https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="Young woman looking at a grocery receipt." /><figcaption><span class="caption">Inflation has risen to levels not seen for three decades. Consumers will feel the squeeze as their purchasing power drops.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com.au/detail/photo/checking-receipt-royalty-free-image/691853536?adppopup=true">Getty Images</a></span></figcaption></figure> <p><strong>The all-encompassing impact of inflation</strong></p> <p>In a progressive tax system, inflation hurts salary and wage earners who get pushed into higher tax brackets as they receive inflation adjustments to their pay.</p> <p>Inflation can also cause issues at a national level.</p> <p>If one country’s inflation rate is higher than their trading partners then its currency falls in value. In the early 1970s, the NZ dollar was worth almost US$1.50. Our higher inflation rates of the 70s and 80s saw it fall to around US$0.50 by the mid 80s.</p> <p>This drop in value limits what we can buy from overseas – things like life-saving drugs will become more expensive for us if we don’t get inflation down and others do.</p> <p><strong>The causes of inflation can come from good intentions</strong></p> <p>Inflation is too much money chasing too few goods.</p> <p>If central banks push more money into circulation, there is a real risk of inflation. A big increase in demand for goods from, for example, an increase in government spending can also trigger inflation. So can supply chain disruptions that reduce the goods available (meaning the same amount of money chasing fewer goods).</p> <p>Unfortunately, all these triggers are currently in play as countries respond to a series of global crises.</p> <p>The invasion of Ukraine and ongoing COVID-19 supply chain disruptions have reduced the goods available. Governments globally have boosted spending to support their economies. But this latter factor has been put on steroids by central banks being willing to purchase government debt.</p> <figure class="align-center "><img src="https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="Man with mask pushing supermarket trolly." /><figcaption><span class="caption">Russia’s war in Ukraine and the ongoing COVID-19 pandemic has caused a cost-of-living crisis.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com.au/detail/photo/man-wearing-mask-while-shopping-in-supermarket-royalty-free-image/1235145649?adppopup=true">Getty Images</a></span></figcaption></figure> <p><strong>Unintended consequences</strong></p> <p>The RBNZ bought billions of government bonds to keep interest rates low as part of its <a href="https://www.parliament.nz/en/pb/library-research-papers/research-papers/library-research-brief-large-scale-asset-purchase-lsap-programme">“large scale asset purchases” programme</a>.</p> <p>In New Zealand, the average money growth between 1995 and 2019 was about 8% per year. This accommodates a growing population, a growing economy and a little bit of inflation (a little bit is OK). In the last two years money supply has grown by around 30% per year.</p> <p>Of course it’s easy to look back with the benefit of hindsight. Those who made the decisions at the time don’t have that luxury.</p> <p>The RBNZ is now they are having to wind back their asset purchases and raise interest rates to rein in inflation.</p> <p>Some argue the RBNZ has been <a href="https://www.stuff.co.nz/national/politics/129311096/more-pain-expected-as-inflation-runs-hotter-than-a-government-can-handle">distracted and has dropped the ball on their key job</a> and we are now facing the risk the inflation genie is out of the bottle.</p> <p>Whether that criticism is justified or not, the RBNZ will now have to act decisively to reduce inflation. But getting inflation down is never painless.</p> <p>Households with mortgages will find their weekly budgets squeezed as interest rates rise. Firms will face falling demand from consumers with less to spend. Job growth will dry up – though New Zealand is in the fortunate position of starting with very low unemployment.</p> <p>Regardless, the RBNZ must do the job they got back in 1989 with the passing of the <a href="https://www.rbnz.govt.nz/-/media/29ada25bfa8b4e50922262618fb03e00.ashx?sc_lang=en">Reserve Bank of New Zealand Act</a>. New Zealand’s central bank is the only one that can control monetary conditions; it’s the only one that can get inflation under control.</p> <p>The same could be said for many of the countries facing growing inflation.</p> <p>If central banks don’t take decisive action, we could get a sharp reminder of just how bad inflation can be.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/187154/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/stephen-hickson-1288490">Stephen Hickson</a>, Economics Lecturer and Director Business Taught Masters Programme, <a href="https://theconversation.com/institutions/university-of-canterbury-1004">University of Canterbury</a></em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/inflation-is-2022s-boogeyman-how-can-we-address-rising-living-costs-while-helping-bring-it-down-187154">original article</a>.</em></p> <p><em>Image: Getty Images</em></p>

Money & Banking

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"Inflation by stealth": How you're paying more without realising it

<p dir="ltr">The saying usually goes “get more bang for your buck” but this has not been the case in recent years.</p> <p dir="ltr">Aussies have been paying a lot more for products that are shrinking in size while prices remain the same.</p> <p dir="ltr">Companies have been changing the size of their products while making the packaging a bit smaller, making it difficult for customers to see the difference.</p> <p dir="ltr">Described by experts as “shrinkflation”, Aussies are paying too much for what should have decreased in price.</p> <p dir="ltr">"You don't notice that you're paying more," InvestSMART's Evan Lucas told <a href="https://www.9news.com.au/national/shrinkflation-sneaky-way-companies-australia-increase-grocery-price/2a030dc9-ed6c-4bf2-83d3-08ca9873c862" target="_blank" rel="noopener">Nine News</a>.</p> <p dir="ltr">"So it's actually inflation by stealth."</p> <p dir="ltr">Smiths chips, Kellogs cereal and Cadbury chocolate are obvious products that have fallen for the shrinkflation.</p> <p dir="ltr">Original Tim Tams come with 11 biscuits in the packet, but that is not the case for other flavours such as Chewy Caramel, Choc Mint, Double Coat, which only have nine and cost the same as the original.</p> <p dir="ltr">The delicious Pringle tubes, which have been commended for not selling air, has gone from 165g of chips to just 134g.</p> <p dir="ltr">It’s expected that retailers will take advantage of upping their prices as petrol soars to more than $2 a litre, labour shortages and global supply chain issues.</p> <p dir="ltr">Queensland University of Technology retail expert Dr Gary Mortimer predicts inflated grocery prices over the next few months.</p> <p dir="ltr">“What we’re going to see in the next 12 to 18 months is slightly inflated food and grocery prices, somewhere between three and five per cent,” he told <a href="https://www.news.com.au/finance/business/retail/consumer-frustration-set-to-peak-as-supermarket-shrinkflation-rises/news-story/63cecb0bc9164d93e88811684356624f" target="_blank" rel="noopener">news.com.au</a>.</p> <p dir="ltr">“Shrinkflation is probably one strategy that we will see become more readily applied so that it doesn’t have a significant hit on the household bottom dollar.”</p> <p dir="ltr">Dr Mortimer said many consumers would see shrinkflation as not fair, but retailers were aware of families doing it tough.</p> <p dir="ltr">“By giving you a little less, maybe 25 or 50 grams, you can still essentially get the majority of the product [while not paying any extra].”</p> <p dir="ltr">Customers are advised to compare the “price per 100 grams” labels before purchasing a product.</p> <p dir="ltr"><em>Image: Shutterstock</em></p>

Money & Banking

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10 beauty treatments you can get in your lunch hour

<p><strong>1. Microwave away sweat </strong></p> <p><span>Can you imagine being sweat-free all summer? This isn’t a dream, it’s reality and it’s possible to do so in under an hour with miraDry, a non-invasive treatment that uses microwave energy to permanently destroy sweat glands. Good to note that after the treatment, you should ice on and off for the rest of the day, so factor that in when you decide to go back to work or not. “While it is not recommended that you work out heavily the day of treatment, most patients resume their regular activities the same day,” says plastic surgeon, Dr Steven Goldman.</span></p> <p><strong>2. Freeze away your double chin </strong></p> <p><span>That stubborn double chin is the dreaded reminder that sometimes it doesn’t matter how much you exercise or diet, it’s not going to resolve no matter how many kilos the scale says you shed. Enter one of the newest non-surgical fat reduction kids on the block: the Cool Mini (CoolSculpting’s younger sibling). This painless 45-minute treatment is safe and works to reduce fat in the submental (double chin) area. “We have had fabulous results with the CoolMini applicator being placed centrally and with only one treatment,” describes dermatologist, Dr Michele Green. One CoolMini patient even went to dinner after her treatment and no one noticed a thing.</span></p> <p><strong>3. Turbo charge your teeth whitening </strong></p> <p><span>Are your pearly whites looking a little dull lately? Forget those messy, hard-to-stick strips that take weeks to show a brighter smile and opt for the hour-long Zoom Whitening procedure that provides immediate results – sometimes up to eight shades whiter! Your teeth might be sensitive, similarly to other whitening treatments. Cosmetic dentist, Victoria Veytsman, also advises to be aware of what you eat and drink post-procedure when you head back to your office. “The maintenance for this procedure is a diet consisting of clear or white foods for up to 24 hours.” After about 24 to 48 hours, you can resume a normal diet.</span></p> <p><strong>4. Get a liquid nose job</strong></p> <p><span>If you’ve ever thought about what you would look like with a different nose, but are a bit under-the-knife shy (or you can’t take a couple of weeks off work), this may be your best bet. The non-surgical nose job, or ‘liquid rhinoplasty’ is an alternative to a traditional rhinoplasty and uses injectable fillers such as Radiesse to smooth out bumps and humps and, at times, correct breathing issues. “As compared with surgery, non-surgical rhinoplasty saves time, money and pain,” explains plastic surgeon, Dr Dara Liotta. “For most patients, there is essentially no downtime. The best part? This treatment only takes ten to 15 minutes, however results generally last from six months to two years,” she says.</span></p> <p><strong>5. Get a vampire facial for your scalp </strong></p> <p><span>Another side effect of ageing can be hair loss. Whether it’s going or already gone, there are quick in-office treatments you can do in no time. “Platelet rich plasma (PRP)is newer therapy for hair loss,” says dermatologist, Dr Sejal Shah. “It is injected into the areas of thinning on the scalp. The growth factors and other proteins in the platelets nourish the hair follicle and stimulate hair growth.” The entire procedure from start to finish generally takes about 30 minutes and you can expect to start seeing results anywhere between four and eight months.</span></p> <p><strong>6. Lighten up, with light therapy </strong></p> <p><span>Many people have stubborn areas of fat that seem impossible to lose, but did you know that you can eliminate some bulge in less time than it takes to get to work? SculpSure is a non-surgical laser treatment for the reduction of persistent pockets of fat like love handles or a muffin top. “SculpSure targets and permanently destroys these fat cells without surgery, downtime, redness or pain,” explains dermatologist, Dr Dennis Gross. “It’s the newest, non-surgical, 25-minute procedure that uses light-based technology to permanently destroy up to 24 per cent of fat per treatment.”</span></p> <p><strong>7. Zap that zit </strong></p> <p><span>Next time you feel a big pimple coming on before a hot date or big presentation at work, consider getting a cortisone injection during your lunch hour. This quick in-office treatment is the sure-fire way to zap a zit in no time says dermatologist, Dr Eric Schweiger. “A cortisone injection is the best and quickest way to bring down inflammation from an oncoming blemish in about 24 hours.”</span></p> <p><strong>8. Make hands look years younger</strong></p> <p>When we think of ageing skin, our hands are usually the last place we think about, but they’re the one area of our bodies we engage with all day, every single day. Adding to the constant ageing process are factors such as years of sun exposure, crepey skin and prominent veins. Radiesse to the rescue! “Radiesse filler firms and plumps the thinned skin, making veins there go beneath the surface,” explains Dr Gross. “It’s a simple procedure with no pain or downtime and the results are immediate and amazing.”</p> <p><strong>9. Shrink pores in 30 minutes</strong></p> <p>The best way to shrink the appearance of pores is to excavate all the gunk that’s making them visible. That’s what the non-invasive, non-surgical, skin care treatment, HydraFacial can do in half an hour. “HydraFacial marries clinical exfoliation with infusion of serums including Hyaluronic Acid for plumping,” says celebrity aesthetician Graceanne Svedsen. “Imagine the gentle suction of dead skin while antioxidants and peptides drench your epidermis. HydraFacial uses the ancient technique of lymphatic drainage to reduce inflammation and congestion, and the result is the appearance of less puffiness, in addition to smaller-looking pores.” If you have this treatment at lunch, your colleagues will wonder how you had time to fit in a long nap during the 30 minutes you were out of the office.</p> <p><strong>10. Be rid of brown spots</strong></p> <p><span>One split-second zap of a Ruby laser is all that it takes to permanently remove brown spots from your skin, particularly ‘sun spots,’ or lentigines. “The laser light is absorbed by the pigment particles in the brown spot and is heated up in a mere fraction of a second,” explains dermatologist, Dr Leonard Bernstein. The pigment essentially forms a superficial crust that peels off after a few days. No anaesthesia is necessary.” The brown spot should not reappear unless it gets exposed to significant sunlight in the first two weeks after treatment while the area is still pink and healing. Cost ranges from $600 to $1000 depending on the size of the spot and the location of the office. Brown spots, be gone!</span></p> <p><em>This article was written by Anna De Souza and originally appeared on <a href="https://www.readersdigest.com.au/healthsmart/beauty/skin/10-beauty-treatments-you-can-get-in-your-lunch-hour">Readers Digest</a>. </em></p>

Beauty & Style

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Four-year-old girl found floating alone at sea on giant inflatable unicorn

<p>A ferry crew and its passengers could not contain their shock when they spotted a small child that had been swept away from the shore on a giant inflatable unicorn.</p> <p>The young child had been swept out to sea and was drifting off the coast of the Greek town of Antirrio in the Gulf of Corith.</p> <p>Local press reported the daughter of the parents, that was aged between at least four to five years old, had lost their focus as she played on the toy that would eventually take her away from the shore.</p> <blockquote class="twitter-tweet"> <p dir="ltr">Mum and dad probably pissed on the beach dont even notice she’s gone! <a href="https://t.co/DRfkkrQJa3">pic.twitter.com/DRfkkrQJa3</a></p> — LEE LEE THE 3RD ⚔️ (@LeeBrasco) <a href="https://twitter.com/LeeBrasco/status/1298895389291098114?ref_src=twsrc%5Etfw">August 27, 2020</a></blockquote> <p>When the parents realised that their little daughter was out of sight, they informed the port authorities, reports the Greek City Path.</p> <p>The authorities reportedly alerted the captain of the local ferry “Salaminomachos.”</p> <p>The ferry's captain on the Rio-Antirio found the child in the middle of the sea and slowly manoeuvred the vessel to her rescue.</p> <p>Footage captured the extraordinary incident that showed the girl calmly sitting on her raft as the boat crew plucked her to safety.</p> <p>The clip showed her wearing a pink bathing suit and holding on tightly to her inflatable.</p> <p>Her unicorn began to float away as the crewmen plucked her out of the water to safety.</p> <p>The little girl was reportedly returned to her parents unscathed.</p>

News

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Inquest hears evidence on three-year-old’s death on inflatable trampoline

<p>A funfair worker attempted to catch a three-year-old girl who was thrown higher than a house when an inflatable trampoline exploded, an inquest has heard.</p> <p>Ava-May Littleboy was playing on the trampoline when it burst on the beach at Gorleston-on-Sea in Norfolk, England on July 1, 2018. Beth Jones, a friend of Ava-May’s aunt Abbie Littleboy, said the toddler “went up so high, it was higher than my house, about 20 feet [6 metres]”.</p> <p>Jones said she heard a loud bang before she saw Ava-May in the air.</p> <p>“There was a massive thud and Ava came down on her face and tummy. I wasn’t close enough to catch her,” said Jones.</p> <p>She said a funfair worker “had her arms fully out to try to catch her, but she couldn’t as it was so quick”.</p> <p>Abbie Littleboy said the sides of the inflatable trampoline seemed “stiff” but thought it was “meant to be” that way.</p> <p>She said she saw Ava-May “flipping” through the air after a loud boom.</p> <p>“I just remember my little niece flipping. Her eyes were closed and she didn’t scream. I remember looking at her little face and I think the force that sent her up had already done something to her. It was like she was asleep.”</p> <p>Ava-May landed on her face on the sand, suffered a head injury and died in hospital.</p> <p>In a statement read by the coroner, the child’s father Nathan Rowe said: “My heart is scattered all over that beach. I will never go back there as long as I live.”</p> <p>The other child on the inflatable trampoline had no severe injuries.</p> <p>Norfolk senior coroner Jacqueline Lake said the inquest would hear evidence about the “acquisition of the inflatable trampoline, risk assessments carried out, working practices at Johnson Funfairs Limited and the responsibilities and roles within that business”.</p> <p>It would not “include the reason why the inflatable trampoline exploded”.</p> <p>Last year, Norfolk Police announced that <a href="https://www.bbc.com/news/uk-england-norfolk-47557228">no individual or company would be charged with manslaughter offences</a> over the incident.</p> <p>The nine-day inquest continues.</p>

Legal

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Paradise on the Gold Coast: Gwinganna

<p>The steep, seemingly endless driveway mentally prepares you to escape into another world. In fact, you are advised to leave your baggage (emotional, that is) at the large sliding gate at its summit.</p> <p>I’ve only driven 40 minutes from home, yet I feel hours away. As I mingle at the welcome afternoon tea, I notice that apart from a couple of other Gold Coasters, guests seem to be mostly from Sydney, Melbourne, and New Zealand. Many singles, a few couples, and refreshingly, some family groups.</p> <p>Some come for health and fitness, others for healing, and some to strengthen relationship bonds; the reasons are as many as there are people and this weekend is a full house at Gwinganna Lifestyle Retreat.</p> <p>This is not my first visit. I confess: I am a recidivist. I don’t intentionally go out and reoffend, it is just the craziness of the highly competitive, tech-saturated, fast-paced outside world that causes me to stray.</p> <p>Gwinganna gets me straightened out — from the exquisite, picked-fresh, organic food to the multitude of health and wellness activities packed into each stay. I love the fact that technology, smuggled-in chocolate and alcohol, and newspapers are contraband except in emergencies (and I don’t mean an alcohol emergency). It’s one less decision I have to make: I can’t check on home, or answer a family or friend’s request — this time is for me.</p> <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/BMKqUVkDJRY/" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="margin: 8px 0 0 0; padding: 0 4px;"><a style="color: #000; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none; word-wrap: break-word;" rel="noopener" href="https://www.instagram.com/p/BMKqUVkDJRY/" target="_blank">Gwinganna is by far one of the most magical places I have ever been. I recently took my mum there for an early birthday surprise and was blown away. The staff, the food, the activities, the educational workshops, the hikes, the spa, the stunning views, the wildlife... EVERYTHING! 🙌They don't miss a thing. This was the first time my mum has ever been on a retreat let alone done anything (and I mean anything) like this and even she was blow away. I think she might think I am a little cray cray sometimes with all my hippy stuff, but I know she felt right at home here. We both did! It was great for our relationship too. We went a little deeper (which I crave) and got to really connect on a more intimate level. Gwinganna is by far one of the most magical retreats I have ever experienced and I couldn't recommended it enough. Have you been? If so, what did you love most about it? #gwingannalifestyleretreat #gwinganna #gwingannaretreat</a></p> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;">A post shared by <a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px;" rel="noopener" href="https://www.instagram.com/melissaambrosini/" target="_blank"> Melissa Ambrosini</a> (@melissaambrosini) on Oct 29, 2016 at 5:15pm PDT</p> </div> </blockquote> <p>Each return visit has come with a mix of excitement and trepidation. I want it to be as life-changing as it was the first time. I anxiously look for consistency, that breathtaking surprise when I enter my room to find luxury rather than adequate accomodation. I secretly hope for something inspiring, something new that will widen my world, and in turn, who I am. That has always been my experience and this time did not disappoint.</p> <p>I have been assigned the Lychee Orchard Suite and as I have zero sense of navigation, I follow the cobbled bush path, carefully focussing on landmarks. The silence of Tallebudgera Valley is deafening at first, before the sounds of the Australian bush work their way into my consciousness.</p> <p>Four or five wallabies flank my path and stop foraging to ascertain my threat level. They are so close I could touch them. Two magpies stop squabbling over a plump seed to do the same, but as I move slowly towards my villa, they soon ignore me and get on with their business. The native Australian birds clearly claim Gwinganna as their own and they constantly add a narrative to your journey there.</p> <p>Later that day in the spa, my therapist whispers Ayurvedic chants as she performs her aromatic ritual but it is the eastern whipbird outside — calling to me for the entire 80 minutes of my treatment — that soothes my soul. In my deep water running class, small brilliantly-coloured birds mischievously dive-bomb between us, mocking our efforts with their skill and excitement.</p> <p>Gwinganna is not a place of "halves" or "nearly theres".</p> <p>Every meal is laden with exotic herbs and greens that are now on my grocery list for life, every mouthful a delight to everyone at the table. Meals are a sensual time of enthusiastic groans and murmurs, the men amongst us especially delighted at some alternate dishes they may not have willingly ordered had they the choice.</p> <p>The mornings are filled with Bosu and boxing, yoga, drumming, and bush walks — you create your own journey. In the spa — which is the “Dreamtime” prescribed each afternoon — massage oils are warmed, pink desert sands softly sprinkled, and silky clays applied with long strokes that finish at the tips of the fingers and toes.</p> <p>Each treatment is skillfully executed and we all willingly succumb before debriefing at the evening meal. “They really have it mastered here, don’t they?” someone offers enthusiastically. We all agree as we sip 100 ml of organic wine and anticipate the first tantalising dish.</p> <p>So, what was my intent for this weekend? Let’s just say, I left feeling slimmer, lighter, cleansed inside, buffed outside, muscles and nerves soothed. My mind is clear and relaxed, I’m yet again inspired to live a better life and be a better me. Thank you Gwinganna, you never disappoint.</p> <p><em>Written by Nicole Tujague. Republished with permission of <a href="https://www.wyza.com.au/articles/travel/gwinganna-paradise-on-the-gold-coast.aspx">Wyza.com.au.</a></em></p>

Domestic Travel

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13 totally bizarre spa experiences around the world

<p>I always adopt a ‘treat yo’ self’ attitude when I’m on holidays. “I’m already splurging on hotels and dinners out so why not book myself in for spa treatments while I’m at it”, I tell myself as my bank account slowly slips into the red. I’ll try anything twice (within reason). I’ve enjoyed extremely thorough hammam scrubs in Morocco, deep tissue massages in Vietnam and rice paper body wraps in Thailand. Each involved a little too much nudity and not a lot of relaxation, but I embraced each experience, all in the name of travel. A Japanese Onsen experience is next on my list. I have since stumbled upon a few strange spa experiences that truly put my adventurous attitude to the test. Would you try these 13 whacky spa treatments?</p> <p><strong>1. Irish seaweed bath</strong></p> <p>Kilcullen’s Seaweed Baths, County Sligo, Ireland The Irish have been using this stuff to cure ailments since the 12th century. Monks would harvest a special type of seaweed called ‘dillisk’ and prescribe it to patients with all sorts of issues. The same seaweed used to eliminate parasitic worms could also apparently curb a “woman’s longing”. These days, Kilcullen’s Seaweed Baths in County Sligo use steamed seaweed to enhance a bather’s spa experience. The bath full of murky, salty brine draws out toxins and supposedly leaves you feeling delightfully tingly. If you can tolerate the lingering smell of sea urchins for a few days, this might be right up your alley.</p> <p><strong>2. Thai fish spa</strong></p> <p>Thailand A decade ago, the strange phenomenon of fish spas swept the tourist traps of Thailand. Since then, this fishy foot spa treatment has spread all over the world, even in the west. A species of Middle Eastern carp have earned their nickname, ‘doctor fish’, by eating away all the dead skin on your feet. Some say it feels like “little delicate kisses”. Ticklish types say it’s more maddening than it is relaxing. However uncomfortable, it is effective. My feet were soft as a baby’s bottom after I tried it in Phuket in 2010. I don’t think I’ll be dipping my toes in the tank again though.</p> <p><strong>3. Japanese ramen noodle bath</strong></p> <p>Yunessun Spa House, Tokyo As a broke uni student living abroad in 2016, my diet consisted almost exclusively of ramen noodles. Today, I can barely look at the stuff, but it turns out, people are bathing in it. A theme park in Japan is offering visitors the chance to soak in a hot tub (shaped like a ramen bowl, of course) full of noodles and pork broth. It’s a family affair; up to 10 people can fit in the ramen bath at any given time. The treatment is supposed to give you a “healthy glow” for several days after. Unfortunately, the strong smell of soy sauce sticks around for just as long. This isn’t the only bizarre spa treatment at Yunessen Spa House. You can also bathe in coffee, red wine, green tea and sake.</p> <p><strong>4. Mexican cactus massage</strong></p> <p>Four Seasons Resort, Punta Mita, Mexico Massage therapists use the paddle of a cactus to work out your knots. Ouch, right? Well, actually, the needles are all removed prior to treatment. The strange service is offered at the luxury Four Seasons Resort spa and will set you back a spicy $245. The not-so-spikey massage is followed by a lathering of lotion made from indigenous plants and a splash of tequila. The treatment is said to leave your skin feeling hydrated and rejuvenated.</p> <p><strong>5. Finish cryotherapy</strong></p> <p>Haikko Spa, Finland Cryotherapy is gaining momentum around the world. It’s a popular method of recovery for athletes after a hard workout or competition. Thought apparently beneficial, it’s not exactly a relaxing experience. It requires entering a chamber, sealing the door and enduring temperatures as low as -110 degrees Celsius. Yes, Celsius. On top of relieving sore muscles, it also aids in boosting your metabolism and making your skin glow. Although, that glow might just be from the layer of frost on your cheeks.</p> <p><strong>6. New Yorker bird poo facial</strong></p> <p>Shizuka Day Spa, New York, USA Controversially known as the ‘Geisha Facial’, this treatment involves having a concoction of nightingale droppings and rice bran spread all over your face. Celebrity facialist and namesake of the upscale Manhattan spa, Shizuka Bernstein, claims the traditional and natural Japanese ingredients help to soften and brighten the skin. Grossed out? This might ease your quease. The bird droppings aren’t collected from a local park. They’re sanitised under ultraviolet lights and milled down into a fine powder. The spa treatment is apparently highly sought after and costs US$180 for an hour session.</p> <p><strong>7. Japanese snail facial</strong></p> <p>Ci:z.Labo Spa, Tokyo, Japan It seems the Japanese will try just about anything. This slimy spa treatment is conducted by five celebrity snails. Raised in the spa on a strict, organic diet of carrots, Japanese mustard spinach, and Swiss chard, the snails are very well-looked after. This isn’t the first time these slippery suckers have been used in the name of beauty. Snail slime was all the rage in the 80s, praised for its miraculous healing properties. Today, the ‘Celebrity Escargot Course’ involves a human facialist rubbing snail slime into your skin for up to an hour, before setting a bunch of snails loose of your face for five long minutes.</p> <p><strong>8. Austrian beer bath</strong></p> <p>Moorhof Landhotel, Frankling, Austria Now this is a spa treatment that I can get around. Most people think alcohol introduces toxins to your body. A handful of Austrian spas claim it can do the opposite. Soaking in a barrel of foamy beer is said to draw out toxins and exfoliate the skin. Hedwig Bauer, an Austrian spa owner herself, goes a step further to say beer baths can help treat gout, eczema, kidney stones, strokes and stress. Beer baths have now spread to Germany and the Czech republic and are often treated us fun tourist experiences rather than legitimate healing practices. If you decide to give it a go, don’t be tempted to drink the beer from your bath because, well, that’s gross. Save it for the beirhaus.</p> <p><strong>9. Maldivian underwater spa</strong></p> <p>Huavafen Spa &amp; Pearl, Maldives The treatments themselves are not what make this spa unique. It’s the setting. The world’s first underwater spa transports you to an ethereal realm of underwater relaxation. Channel your inner mermaid as fish dart all around you just on the other side of the spa’s glass walls. A range of massages, facials, hair and beauty treatments are available and are performed by a team of renowned massage and beauty experts. The spa is part of the Huvafen Fushi Maldives resort whose luxury, overwater bungalows are so beautiful it hurts.</p> <p><strong>10. Balinese snake massage</strong></p> <p>Bali Heritage Reflexology and Sa, Jakarta, Indonesia In the interest of self-preservation, I refuse to give this one a go. However, the spa therapists at Bali Heritage Reflexology and Spa in Jakarta are adamant that their python massage spa treatments work wonders. The weight of the snake does little to penetrate sore muscles, but that’s not the point of the treatment. The idea is that the fear triggered by having a snake slither all over you will trigger an adrenaline rush that boosts your metabolism. The snakes are not venomous and a masseuse stands by at all times just in case things go awry. Still, it’s a no from me.</p> <p><strong>11. Chinese fire massage</strong></p> <p>Oriental Taipan Spa, Beijing, China Fire cupping is common practice in Chinese remedial therapy. The service is widely available in Australia too, but one spa in Beijing takes it one step further. Glass cups are strategically placed on a patient’s back and heated with a flame, creating a strong suction effect on the skin. It is said to relieve muscle tension and common colds but expect to be left with circular bruises for days after. At Oriental Taipan Spa in Beijing, the treatment is followed by a Chinese Meridian Oil Massage involves laying an oil-soaked towel over your back setting it alight. Sounds relaxing, doesn’t it?</p> <p><strong>12. Vietnamese Mud Bath</strong></p> <p>Nha Trang, Vietnam The medicinal properties of mud have been well-documented for centuries. You can buy powdered mud masks from the supermarket these days. But in Central Vietnam, these spa treatments have become a fun, social activity. The Vietnamese believe mud baths help to remove dead skin cells, strengthen bones, and reduce fatigue. They also use it to seek refuge from the heat. Nha Trang has developed a reputation for its mud bathing facilities, attracting locals and tourist alike. 100 Egg Mud Bath, 6km from the city of Nha Trang, has multiple mud pools and baths to choose from. Visitors can soak in their own private egg-shaped tub for around $18 per person.</p> <p><strong>13. Beverly Hills Vampire Facial</strong></p> <p>Nazarian Plastic Surgery, Beverly Hills, California, USA This is less of a spa facial and more a drastic, and potentially dangerous, cosmetic treatment. Even still, it didn’t stop Kim Kardashian from trying it out. Vampire Facials are a combination of microneedling (repeatedly puncturing the skin with tiny needles) and a mask made from your own PRP (Platelet Rich Plasma). Basically, a vial of you blood is drawn, placed in a centrifuge until the plasma has separated from the red cells. The plasma is then smeared all over your face, helping to repair skin damage. Supposedly this is a more “natural” option for skin rejuvenation, compared to botox and injectables. When you put it like that, I suppose it’s true. It’s just a little (a lot) creepy.</p> <p>Would you try any of these? Let us know in the comments below.</p> <p><em>Written by Bethany Plint. Republished with permission of </em><a href="https://www.mydiscoveries.com.au/stories/weird-spa-experiences-world/?slide=all"><em>MyDiscoveries.com.au.</em></a></p>

Cruising

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ALDI does it again! The hot ticket Special Buys item just in time for summer

<p>If you can’t wait for summer, one of ALDI’s latest Special Buys will help you get ready, at a bargain price.</p> <p>This weekend, the discount retailer will feature an inflatable spa in one of its bi-weekly Special Buys sales and it could have customers rushing to get in line for one because of the very reasonable price. You could pick up one for $499, when other outlets have them priced at $1000 or more.</p> <p>The spa can fit the whole family with enough room for four to six people according to consumer comparison site <a rel="noopener" href="https://www.canstarblue.com.au/home-garden/aldi-swimming-pool-gear/" target="_blank">Canstar Blue</a>, at the inflated size of 1.96m x 60cm.</p> <p>The heating and bubbling functions in the spa create a massage effect and the spa comes with a power saving system, heating to a maximum of 40C, and 87 air jets.</p> <p><img style="width: 500px; height: 300.625px; display: block; margin-left: auto; margin-right: auto;" src="https://oversixtydev.blob.core.windows.net/media/7821683/spa.jpg" alt="" data-udi="umb://media/5fd7c3f9563a44c2abc826ff2fead1ff" /></p> <p>Another benefit is the spa’s easy portability, armed with two handles, making it light to carry before it’s filled with water.</p> <p>What’s more, it’s easy to set up, with a pump included with the spa to inflate it quickly.</p> <p>Stock of the inflatable spa is limited, but popular items may be in the line-up for future sales according to <a rel="noopener" href="https://au.news.yahoo.com/latest-aldi-special-tipped-cause-customer-chaos-121633380.html" target="_blank">7News</a>.  </p> <p>It reported that the chain decided to increase stock for Special Buys that raced off the shelves because customers were behaving aggressively as they rushed to secure a bargain.</p> <p>“People go running in for the discount, and that’s not the behaviour we want to see,” ALDI spokesman Adrian Christie said.</p> <p>Will you be heading to ALDI this weekend to check out their Specials Buys? </p>

Retirement Income

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Simple tips to have a relaxing spa day at home

<p>Your body may be screaming out for some pampering but your wallet is saying otherwise. Ditch the spa experience and make your own at home with some of these spa hacks.</p> <p>Read on to find out how you can create a relaxing environment without having to leave your house.</p> <p><strong>1. Set the scene</strong></p> <p>Light a candle and dim the lights if you can – it might seem cheesy, but it really does help to position your mind and body into relaxing. If you have a bath, run a long, warm bath and add some bath salts, bath bombs or oil into it. Allow the fragrance to fill the room just as a room in a spa smells. Pop on some music and sit back to relax. Try to clear your mind and be in the moment. While you lay there relaxing, the botanical ingredients of the products you added will start to soften and nourish your skin. Those without a bath need not worry, there is still plenty you can do to create a spa experience. Hop into the shower to wet your skin and then either move the water away from you or quickly pop out to apply a salt scrub or body oil, use a loofah or exfoliating glove to work the product into your skin before popping the water back onto your body to rinse off. </p> <p><strong>2. Get the right tools</strong></p> <p>From inflatable pillows to body brushes, there are plenty of cost-effective options for spa tools out there. Visit your department store or pharmacy to see what's on offer. A great start is to get a body puff which can be used to wash and also exfoliate your body. Another great option is a cooling gel eye mask which you can pop in the fridge and lay over your eyes to either help your eye cream sink in or on its own for a de-puffing treatment.</p> <p><strong>3. Mask up</strong></p> <p>There is no denying that masks are big news at the moment and this is thanks to their ability for drawing out impurities while also delivering a high concentrate of skin-loving goodies into your dermis. Choose what you want depending on your needs and pop it on while you are soaking in the tub. </p> <p><strong>4. At-home mani and pedi</strong></p> <p>Ditch the salon and give yourself an at-home experience. There are plenty of gel polishes on the market now which will give you two weeks’ worth of colour. Take the time to push back cuticles, buff and shape your nails to the desired shape and polish. Set aside enough time to allow your nails to dry sufficiently or invest in some quick dry drops.</p> <p>Happy spa days!</p> <p><em>Written by Sarah Simpson. First appeared on <a href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Beauty & Style

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Pamper mum with this simple spa treatment

<p><em><strong>Samantha Sargent, distributor of <a href="http://www.energisedorganics.com" target="_blank"><span style="text-decoration: underline;">AEOS</span></a> and natural beauty expert.</strong></em></p> <p>A mother’s touch and love is unrivalled compared to most relationships. So, when Mother’s Day comes around each year most of us become overwhelmed with the thought of buying a gift that doesn't compare to what our mothers, grandmothers and other inspiring women in our lives, have done and given us. </p> <p>The act of loving presence is one of the most powerful gifts you can give, and one that is too often forgotten. Being fully present is such a powerful, more intimate, meaningful and rare gift to give a mother and is precious when time may be of the essence.</p> <p>Give mindful gifts that can be used together, as a bonding experience or assist in the quality of the time spent with each other. This DIY hand treatment is the perfect gift.</p> <p><strong>Top tips for the best at-home manicure and hand massage for the special women in your life this Mother’s Day</strong></p> <p>1. Set up a sanctuary in her living room with a soft towel and your favourite essential oil blend burning.</p> <p>2. Make a little pot of calming herbal tea and a bowl of warm water scented with essential oils to rest your hands in.</p> <p>3. Shape the nails with a crystal nail file. Metal files and emery boards tear the nail as they file, leaving rough, sharp edges. The crystal file glides across the nail tip so you can quickly and easily shape your nail to a flawless, smooth finish. Crystal files seal the nail tip as you file, preventing water, dirt and debris from seeping into the nail tip.</p> <p>4. Rest your mum’s hands in the warm “bath” and focus on your breathing for a couple of minutes, breathing out any worries, and breathing in relaxation and the scent of pure essential oils.</p> <p>5. Remove the hands from the water and gently pat dry. Apply a nourishing natural and organic hand cream, such as the AEOS enriching spelt hand cream, to her hands and forearms, paying particular attention to the cuticles. This is a beautiful opportunity to gift your mum a mini massage to help further alleviate any stress or tension.</p> <p>6. Optional (if you like a splash of colour): Apply two coats of nail lacquer. Remember to choose a toxin-free nail lacquer brand that is free from formaldehyde, toluene, DBP, camphor and animal derivatives. To maintain a perfectly polished mani, keep the AEOS Biodynamic Nail &amp; Cuticle Oil in your handbag and apply each day when you have a spare moment.</p>

Beauty & Style

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Best cruise lines for spa lovers

<p>All holidays should be relaxing but unfortunately, sometimes the end of the holiday comes around and we’re feeling a little worse for wear.</p> <p>Cruises are investing more on board space to their spa and wellness centres to ensure their passengers get top quality treatments and can leave the cruise feeling rested and relaxed.</p> <p>Spa suites are even being offered for those who are dedicating their entire holiday as a physical and mental wellness retreat. These suites generally offer private access to the spa, extra amenities such as top quality bathroom products, herbal teas, pillow menus and sometimes even priority bookings for treatments and classes. Guests on board Celebrity Cruises, who are staying in AquaClass cabins, can even have their meals in an exclusive restaurant called Blu, which serves healthy, light meals.</p> <p><a href="http://www.traveller.com.au/cruising-to-fitness-grznrb" target="_blank"><strong><span style="text-decoration: underline;">Traveller</span></strong></a> have ranked five cruise ships that spa-goers believe offer the best treatments on board.</p> <p>If you are going on a cruise and you know you need to guarantee that you will come home feeling rejuvenated, then here are spa facilities you should consider visiting.</p> <p><strong>1. Celebrity Cruises’ Canyon Ranch SpaClub on Solstice-class ships</strong></p> <p>This cruise ship offers a Persian Garden thermal self and a program called Take Care of Your Selfie.</p> <p><strong>2. Cunard’s Canyon Ranch SpaClub on Queen Mary 2</strong></p> <p>This ship offers 80 treatments in 24 treatment rooms. You will definitely not run out of options at this spa.</p> <p><strong>3. Viking Ocean Cruises on all ships</strong></p> <p>If you are on board Viking Ocean Cruises then the Liv Nordic spa is free which will allow you to use the sauna, whirlpools, snow room and heated stone loungers.</p> <p><strong>4. Norwegian Cruise Line’s Mandara spa on all ships</strong></p> <p>This line offers more than 50 treatments and thermal suites. Breakaway-class ships also have a Salt Room for travellers.</p> <p><strong>5. Seabourn’s Spa at Seabourn by Steiner</strong></p> <p>This spa offers passengers a bath that alternates between cold and warm water which reduces stress and boosts circulation in the body.</p> <p>Would you recommend any other cruise lines? Let us know in the comments below.</p>

Cruising

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Age pension has not kept up with inflation

<p>New figures have suggested that age pension rules are failing to keep pace with falling interesting rates, and in turn leading to a financial hit for many senior Australians.</p> <p>This issue is stemming from the effect on inflation and the current pension deeming rate, which is used to assess an individual’s income from cash and other investments. A higher deemed income can result in an individual being entitled to lower pension payments.</p> <p>The problem is that despite three official dips in interest rates from the Reserve Bank of Australia since May last year (totalling 0.75 per cent) the pension deeming rate hasn’t moved. Lower interest rates mean less income from savings. As a result, many seniors are being judged to earn more than they actually receive, and are being slugged for it.</p> <p>Ian Yates, CEO of seniors group COTA Australia, told <a href="http://www.news.com.au/" target="_blank"><strong><span style="text-decoration: underline;">News.com.au</span></strong></a>, “If people can’t get the deeming rate, they actually lose income because they government assumes they have got it. If you earn more than the rate, it’s free money. We have flagged to the government that they should be looking at it.”</p> <p>“Sometimes it’s the part pensioners who are proportionally more affected because they are less likely to be using shares and more likely to have tens of thousands rather than hundreds of thousands of dollars. That makes people more susceptible to get rich quick schemes.”</p> <p>But a spokesperson from the Department of Social Services was quick to note that deeming rates were related to a variety of investments and not just savings accounts that were particularly susceptible to moves by the Reserve Bank.</p> <p>The spokesperson said, “The official cash rate is only one of a number of factors that are considered when setting the deeming rates. The Australian Government monitors the deeming rates on an ongoing basis. If required, changes to the deeming rates are usually made either in March or September, in conjunction with pension indexation.”</p> <p>What do you think about the age pension? Should the government adjust deeming rates?</p> <p>Let us know in the comments.</p> <p><strong>Related links:</strong></p> <p><a href="http://www.oversixty.com.au/finance/retirement-income/2016/08/age-pension-asset-test-changes-2017/"><span style="text-decoration: underline;"><em><strong>Major changes for age pension in 2017</strong></em></span></a></p> <p><a href="/finance/retirement-income/2016/08/6-important-money-milestones-to-aim-for-in-your-60s/"><span style="text-decoration: underline;"><em><strong>6 important money milestones to aim for in your 60s</strong></em></span></a></p> <p><a href="/finance/retirement-income/2016/08/claiming-a-pension-and-moving-overseas/"><span style="text-decoration: underline;"><em><strong>Claiming a pension and moving overseas</strong></em></span></a></p>

Retirement Income

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Elephants in spa bath surprise holidaymakers

<p>Remarkable footage from South Africa has emerged, showcasing the moment a group of stunned holidaymakers notice a herd of elephants enjoying their spa.</p> <p>While they’re not pulling on a pair of elephant-sized swimmers and jumping in for a soak (there’d barely be enough space) the elephants do enjoy a nice drink.</p> <p>And while the holidaymakers seem stunned to notice the herd of elephants drinking from the spa bath, the elephants seem rather unperturbed by the whole thing.</p> <p>Let’s address the elephant in the room – they’ve done this before!  </p> <p>The video was originally posted on online forum <em>Reddit</em>, where commenters said it was not entirely uncommon to see elephants performing this way on animal reserves.</p> <p>Either way, we hear an elephant never forgets!</p> <p>Don’t you just love elephants? And while this might be a confronting, it’d be wonderful to see them so close. What’s your favourite big animal?</p> <p>Share your thoughts in the comments.</p> <p><em>Video credit: YouTube / Animal Animal</em></p> <p><strong>Related links:</strong><span style="text-decoration: underline;"><br /></span></p> <p><span style="text-decoration: underline;"><em><a href="/news/news/2016/05/elephant-lulled-to-sleep-by-caretakers-gentle-song/"><strong>Elephant lulled to sleep by caretaker’s gentle song</strong></a></em></span></p> <p><span style="text-decoration: underline;"><em><a href="/news/news/2016/06/adorable-baby-elephant-dances-for-cows/"><strong>Playful baby elephant dances to get cow’s attention</strong></a></em></span></p> <p><span style="text-decoration: underline;"><em><a href="/news/news/2016/06/elephant-calf-rescued-from-drain-in-sri-lanka-video/"><strong>Elephant calf rescued from drain in heart-stopping video</strong></a></em></span></p>

International Travel

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Cruise ships to offer frosty “snow room” spas

<p>While the top deck infinity pool might be what’s getting all the headlines, it’s another attraction on Viking Cruises’ award winning Viking Star that’s captured the imagination of passengers.</p> <p>The Viking Star’s Snow Grotto allows travellers to reap the benefits of the cooler temperatures after a steam. After the sauna you can cool down with this Nordic-influenced tradition – just make sure you wear your spa slippers when you’re walking in as your bare feet might not appreciate it as much.</p> <p>The Viking Star’s Snow Grotto is kept below freezing temperature with flurries of powdery snow descending from the ceiling during the day with an effect that’s touted as beneficial for circulation. The Snow Grotto is part of an elegant thermal suite including a sprawling relaxation zone which offers a salt-water filled thermal pool, hot tub, sauna, heated lounges and therapeutic showers.</p> <p><img width="500" height="375" src="https://oversixtydev.blob.core.windows.net/media/12798/snow-room_500x375.jpg" alt="Snow Room" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>Viking Cruises' founder and CEO, Torstein Hagen, says these relaxation facilities that are provided aboard the Viking Star perfectly suit the exploratory spirit that is offered to visitors on any of the ships operated by the ocean line, “We like to think of Viking of the thinking-man's ocean cruise... We are not promoting this as a luxury ship. We want to bring exploration back to cruising.”</p> <p>That being said, people embarking on a Viking Cruise experience just as much luxury as those on different lines. As an added bonus Viking offers access to smaller ports often missed by larger lines, often includes shore inclusions in the price and offers complimentary extras like Wi Fi and drinks with lunch and dinner which can make all the difference when you’re on an extended cruise.</p> <p>And Viking isn’t the only cruise line that’s getting in on the action. A recently debuted Norwegian Cruise ship has revealed one of the coolest new attractions to hit cruising in 2016 – a super-chilled “snow rom” frosty spa retreat. The snow room is exactly how it sounds, kept at a frosty -10 degrees and boasts flurries of powdery snow from the ceiling in a display of complete and utter decadence.</p> <p>“It's very good for aches and pains,” says Courtney Neumann, working as the spa manager on the Norwegian Escape, who recommends lounging in the thermal suite's super-heated sauna before entering the snow room. “The idea is to go from hot to cold, which makes your blood vessels constrict and dilate, which is extremely good for your immune system and blood circulation.”</p> <p>The Norwegian Escape also offers a thermal suite with an aromatic steam room, humidity-filled heated sanarium, thalassotherapy pool and a “salt room” – a colourful space infused with therapeutic salts. There also are 33 heated loungers shaped to conform to a human spine and dozens of traditional lounge chairs that look out over the ocean through floor-to-ceiling windows.</p> <p><em><strong>Have you arranged your travel insurance yet? Tailor your cover to your needs and save money by not paying for things you don’t need. <a href="https://elevate.agatravelinsurance.com.au/oversixty?utm_source=over60&amp;utm_medium=content&amp;utm_content=link1&amp;utm_campaign=travel-insurance" target="_blank"><span style="text-decoration: underline;">Click here to read more about Over60 Travel Insurance.</span></a></strong></em></p> <p><em><strong>For more information about Over60 Travel Insurance, call 1800 622 966.</strong></em></p> <p><strong>Related links:</strong></p> <p> </p> <p><span style="text-decoration: underline;"><strong><a href="http://www.oversixty.co.nz/travel/cruising/2015/11/picturesque-ports-to-visit/"><em>8 picturesque ports to visit</em></a></strong></span></p> <p> </p> <p><span style="text-decoration: underline;"><strong><a href="http://www.oversixty.co.nz/travel/cruising/2015/11/cruises-in-colder-climates/"><em>5 great cruises in colder climates</em></a></strong></span></p> <p> </p> <p><span style="text-decoration: underline;"><strong><em><a href="http://www.oversixty.co.nz/travel/cruising/2015/11/cruising-to-venice/">Does cruising to Venice have a future?</a></em></strong></span></p>

Cruising

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