
Imagine a horizontal line and that line is the balance point between inflation and interest rates.
When inflation rises, the government raises interest rates to bring it back into balance.
When inflation is too low, it lowers interest rates to boost inflation. Simple.
Of course, if you give tax cuts, the government can blame the people for spending money and increasing inflation.
And of course, if the government of the day delays spending money say on infrastructure, hospitals, education, etc into the next term of government. It gets to mess up the next governments figures, and thus us.
I believe no government should be allowed to play political strategy with the fortunes of the people.
The current government will have to tread very carefully on this and look for the many other key elements that diminish and increase inflation. They will be there; and use them to get our economy back on track.