There are plenty of things politicians could do to ease inflation. Complaining at RBA governor Phil Lowe isn't one of them.

Most of those criticisms were unfair. Suggestions that the RBA is out to hurt people by raising interest rates or that the RBA is unaware of the impact on struggling families are baseless and harsh.

Some criticisms were reasonable. Criticisms of the RBA's level of transparency, the evidence base of its decisions and the lack of monetary policy expertise on its board are all legitimate.

These reasonable criticisms were few and far between.

There's also a big difference between the criticisms being made and who is making them. Politicians, in particular, might want to give their mouths a rest.

This is because there are three ways to reduce inflation, and two of them are controlled by the politicians complaining to Phil Lowe. If politicians stopped complaining and took actions themselves to reduce inflation, interest rates wouldn't be as high as they are today.

The reason for this is straightforward. Inflation occurs when the demand for goods and services in the economy outstrips supply. This means there are three ways to reduce inflation.

First, you can reduce demand in the economy by increasing interest rates. This is Phil Lowe's job. Higher interest rates makes borrowing and our existing debts more expensive, forcing us to cut back our spending on goods and services which eases prices and thus inflation.

Second, you can reduce demand by cutting government spending or increasing taxes, both of which suck demand out of the economy.

Third, you can increase the supply of goods and services by removing restrictions faced by businesses. There are lots of low hanging fruit, discussed later, which would quickly boost supply and ease inflation.

Phil Lowe only controls one of these tools - interest rates - and he has done more than his fair share of the heavy lifting. He has raised interest rates 9 times from 0.1 back in April 2022 to 3.35 today.

But when it comes to fiscal policy and supply side reforms - the tools available to the politicians who, awkwardly, are the ones criticising Phil Lowe - we aren't seeing anywhere near as much action.

On fiscal policy, the government should either reduce spending or raise taxes if it wants to ease inflation. It is doing neither. The budget shows that the government plans to spend more money every year for at least the next four years. The stage 3 tax cuts mean taxes are going down, not up.

The government does deserve credit for one thing: unlike previous governments, it's not spending its windfall gains.

When tax collections were better than expected, the Howard government spent 70 per cent of it. The Morrison government spent 60 per cent of it. The Albanese government, refreshingly, spent only 1 per cent of it in the last budget.

This is a welcome change, and is very sensible in the current environment. But not spending more money is not the same as spending less. Spending less is what reduces inflation.

Supply side reform - the other tool available to politicians to ease inflation - similarly leaves much to be desired. The government has taken some steps to ease inflationary pressures - like its initiatives on childcare and immigration - but there's plenty more that could be done.

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The consequence of this inaction is that Phil Lowe has to do all the heavy lifting in reducing inflation. This is a bad outcome.

Monetary policy is a blunt instrument. It hits all sectors of the economy, not just those experiencing price pressures, and hits individuals indiscriminately, including those least able to bear the cost.

Targeted measures through fiscal policy and supply side reforms are more like a scalpel than a sledge hammer. They can be more surgical in cutting inflation out of the economy. They can't do everything, but they should be doing more of the heavy lifting than they currently are.

So, if politicians were to put more of their energy into reducing inflation instead of complaining to Phil Lowe, what should they do?

The parliament should pass an Inflation Reduction Act that does two things.

First, it should implement a suite of supply side reforms that would quickly boost the supply of goods and services in the economy to ease price pressures and thus reduce inflation.

We could instantly reduce prices across the economy by abolishing remaining trade tariffs.

We could reduce the price of cars by scrapping restrictions that stop people importing secondhand cars.

We could harmonise occupational licensing across jurisdictions so a builder in Queensland can work in NSW.

We could address worker shortages by extending working visas and removing work tests for employer sponsored visas.

We could adopt a "trusted regulator" framework where we approve imports that have already met the standards of the European Union or United States.

There is a long list of fast, effective ways to reduce prices.

Second, the government should bank 100 per cent of its windfall gains in the next budget and find other savings to get spending down further.

Targeting these budget savings to the measures that benefit wealthier households - you'll find plenty in the tax and superannuation space - will help reduce inflation without hurting the most vulnerable.

There are plenty of things politicians could do to ease inflation. Turns out, complaining at Phil Lowe isn't one of them.

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