Globally, we all went through a pandemic, which cost some their lives and most of us economically. Here in Australia we copped a big whack of inflation and a steeply rising cost of living on essentials. You and I paid the price and continue to pay the price. Corporate Australia is screwing us, however, big business in this country didn’t pay the price of the pandemic. If they did they have made sure they have recouped that money and then some. Qantas got a couple of billion dollars from the Australian government and have just declared a $2.6 billion record profit for the year. Are they paying that money back? No way, according to Alan Joyce the departing CEO.
Screw Paying Back Australians
Harvey Norman banked billions from JobKeeper and made huge profits along the way. Paying it back? Not a chance! The banks are making record profits on the back of steeply rising interest rates instigated by the Reserve Bank of Australia. Will they do something tangible to help those in real economic need, like getting rid of all bank charges and fees on accounts? Not likely. Due to the failures of the ACCC and the federal governments over the last decade or two market concentration is the worst it has been in Australian history.
This means that these large corporations with no competition can set their prices. We the consumers have lost our power thanks to those who were in charge and supposed to be monitoring the situation.
Corporate Market Concentration Highest Ever in Australia
The power of oligopolies, where two supermarkets like Coles and Woolies control 80% of the grocery market means there is no real competition driving innovation and economic benefits for the consumer. These two giant corporations control the liquor market as well, and are involved in insurance and financial products as well. In the media, there are only really two corporate players, News Corp and Nine Fairfax. They have carved up all the newspapers, radio and TV networks between them. This means that apart from the ABC, we only hear their version of events about what is happening. Controlling the news is a powerful thing to be able to do.
In Australia, something like 60% of everything is in the hands of oligopolies. This means that the free market is not working as it is intended to do.
|Three stark examples: the US vs Australia|
|Industry||Market share of top four AU firms||Market share of top four US firms|
This graphic is from a 2016 feature In Choice Magazine. It compares Australia with what is happening in the USA at that time.
“The market power of Australia’s largest firms has grown in the last two decades, and price mark-ups have increased… Some economists say many large businesses are partly to blame for that inflation because they have been using their market dominance to exploit the situation and collect huge profits during chaotic times.
Dr Leigh says there’s evidence declining competitive pressures are one of the main reasons why Australian firms have been slower to innovate and improve their productivity performance over the last twenty years. “One back-of-the envelope calculation suggests that rising market power has reduced the rate at which labour flows to its most productive use, which has, in turn, lowered annual labour productivity growth by 0.1 percentage points (about one-fifth of the observed slowdown since 2012),” he says. “There is also evidence that declining competitive pressures are one of the main reasons Australian firms have become slower to adapt, innovate and improve their productivity performance.” ”
Capitalism is supposed to be about competing private enterprises in a free market economy. If however, big businesses have swallowed up all the smaller players, then, these corporate behemoths control their markets at our expense. This is why we have seen our share of the wealth of the nation seriously shrink over the last couple of decades. Low wage growth has plagued Australia for the last 25 years. Corporate concentration reduces the bargaining power of workers by limiting choice in a shrinking jobs market. Companies like Coles, Qantas, CBA, PwC, Ey, KPMG, Deloitte, and the like own so much business in our cities they control the markets and the jobs.
ACCC Failure To Maintain Competition In The Market
Questions must be asked about how we got to where we find ourselves. How has the ACCC failed so miserably to maintain competition in the business world? This is their remit after all. Ultimately, It is governments that have let us down and not done their duty. Underfunding toothless tigers is an Australian government speciality. Ensuring that monitoring bodies are powerless and that corporations get their way is how we have got to this level of market concentration. This is what is ripping us off and delivering wealth into the hands of a select group of insider mates in the corporate world. Politicians and senior bureaucrats are rewarded with lucrative positions following their service to these companies when it mattered.
Campaign donations and kickbacks have paved the way for the concentrated power of these corporations to control their markets and screw the consumer. Alan Joyce leaves with 22 million reasons to smile at our expense of course.
“Concentration is happening more quietly
Whereas in the US large mergers have to be reported to regulators, in Australia mergers are more like marriages. Just as you don’t have to tell your family you are getting married, you don’t have to notify the Australian Competition and Consumer Commission you are about to merge with a competitor. Companies are encouraged to notify the ACCC if the merged parties make either substitutes or complements and the merged firm will have a market share of more than 20%, but that is a guideline rather than a requirement, and the guidance was relaxed in 2008.”
Airfares are ‘ Up, Up and Away’
The most recent Coalition federal government accelerated this market concentration via their decisions and questionable practices. Outsourcing government to the oligopoly of consultancy firms run by their insider mates lined pockets and reduced transparency. The Robodebt scheme was the perfect example of this behaviour, as PwC was involved in reviewing this illegal scheme which cost lives and tax payers $1.8 billion so far. Nobody has been charged yet and I wouldn’t hold your breath, despite the blatant evidence revealed via the Royal Commission. White collar crimes in Australia, especially in the halls of government are generally punished with the feather duster. Lining up a few of these smug types against a wall and asking Mister Putin or Xi Jinping what to do with them, as part of a review into governmental best practice, could engender a different kind of recommendation. What do you think?
Screwed By Corporate Australia Multiple Times
Corporate Australia is screwing us at the cash register and everywhere else. The high inflation we have experienced over the last couple of years is not the result of wage increases, as Phil Lowe would like us to believe. No, it is Corporate Australia clawing back money and revenue growth from pandemic times. Corporate Australia has factored in the increases to its bottom line during this inflationary period and added extra on top just for sweeteners. You and I paid the price during the pandemic in lost earnings and business. We lost again via government hand outs in the trillions of dollars that we will have to pay back. Meanwhile big business, safe to ratchet up prices because of market concentration and no competition, is making us pay through the nose until we bleed.
Record profits are being quietly declared throughout the corporate world. Celebrations are muted because of the backlash from ordinary citizens who are bearing the brunt economically.
Qantas Screwing Australians
We, currently, have a timid federal government that wants to stay in power, so no rocking the boat. See latest Qantas backed government decision to block Qatar Airlines from lucrative Sydney and Melbourne routes to Europe. Thus, airline ticket prices stay high and boost the Qantas bottom line. Qantas has been caught selling 10, 000 tickets to punters, which had already been cancelled. They are holding around half a billion dollars of unrefunded money owed to customers. They tried to quash this by putting a use-by date on this money at the end of this year. Corporate Australia is screwing us, royally.
Robert Sudha Hamilton is the author of Money Matters; Navigating Credit, Debt, and Financial Freedom.