The more confusing and uncertain the economic and the political situation becomes, the more that official announcements have little to do with reality.

Take Reserve Bank governor Glenn Stevens’ luncheon address last week, in which he said that Australians pulling back from spending, and moving to saving their growing incomes, was an ‘adjustment’.

The next day, the CPI figures for the June quarter showed us a better reason why Australians aren’t spending and have no confidence: inflation is running at 3.9 per cent, following from the 3.3 per cent in March.

It isn’t just that prices are rising, making it harder to run a family and maintain a house. Australians are quite aware that when inflation runs high, the Reserve Bank has a reason to raise interest rates.

When you add to that carbon tax and financial crises in Europe and the US, you have some basic reasons for Aussies to stay out of the shops.

Glenn Stevens is a great economist and he does an amazing job of keeping inflation within the bounds of 2 and 3 per cent, when his only tools are raising, reducing or holding official interest rates.

However I see Stevens as symptomatic of a wider problem among the comment-makers and the opinion-formers, especially when they have an ‘official’ or governmental outlook. That problem lies in seeing the housing boom of 1995-2005 – and its attendant debt boom – as a moral transgression that now has to be punished with high interest rates, rising cost of living, new taxes and the threat of global financial crises.

However, the family who bought a Sydney house at the peak of the property boom didn’t want to pay outrageous prices and didn’t want to go into a heap of debt. They had to buy a house in the prevailing market.

The person who has to feed their kids baked beans for a year to keep their house, is not being punished by the economic gods: she’s trying to survive as the cost of her debt – and the cost of living – rises. It should be noted that the Reserve Bank dropped interest rates as the GFC started while the government expanded the first home owner grant scheme. What followed was one of the highest housing-leverage figures ever.

Australians did what they were lured into doing: they borrowed and bought property. And then got caught in a cycle of seven interest rate rises.

In the current inflation scenario, the Reserve Bank has every justification to raise interest rates. But we need to ensure that the people who are already struggling are not further punished.

Mark Bouris is the Executive Chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting & tax and insurance. Email Mark on mark.neos@ybr.com.au with any queries or check www.ybr.com.au for your nearest branch.