Reference
The plain-English glossary
No reader should ever hit a term they can’t decode. Every piece of jargon on this site is defined here in one sentence.
Bracket creepWhen inflation lifts your pay into a higher tax bracket, so you pay a higher average tax rate even though you are no better off in real terms.
CPI (Consumer Price Index)The main measure of inflation — the change in the price of a typical basket of household goods and services.
Capacity factorThe share of the time a power station actually generates at full output. Wind and solar have lower capacity factors than coal, gas or nuclear.
Cash rateThe interest rate the Reserve Bank sets, which flows through to mortgage and savings rates across the economy.
Default Market Offer (DMO)The regulated reference price for electricity that caps what retailers can charge many customers.
Enterprise bargainingNegotiating pay and conditions between an employer (or group of employers) and employees, usually via unions, in a formal agreement.
FirmingThe back-up generation and storage (batteries, gas, pumped hydro) needed to keep the grid reliable when wind and solar are not producing.
GDP per capitaTotal economic output divided by the population — a better guide to living standards than headline GDP, which can rise just from a bigger population.
Net overseas migration (NOM)The number of people added to Australia’s population by migration over a year — arrivals minus departures.
Off-budgetSpending routed through investment funds that sits outside the ‘underlying cash balance’ — the headline surplus or deficit — even though it commits public money.
ProductivityHow much output is produced per hour of work. Sustained real wage growth depends on it.
Real (vs nominal)‘Real’ figures are adjusted for inflation; ‘nominal’ figures are not. Real wages can fall even when nominal wages rise.
Safeguard MechanismThe scheme that caps and steadily lowers the emissions allowed from Australia’s largest industrial facilities.
Structural budget balanceThe budget position stripped of temporary boosts (like high commodity prices) — what the budget would look like in ‘normal’ conditions.
Terms of tradeThe ratio of the prices Australia gets for its exports to the prices it pays for imports. High commodity prices lift it and flatter the budget.
Unrealised gainsThe increase in an asset’s value on paper, before it is sold. Taxing them means taxing a gain you have not actually banked.