Inflation Facts
0
0
Inflation is caused by rising prices. Remember that when you are looking for who to blame for the higher prices you are paying and rising interest rates on borrowings. In Australia, we have this strange proclivity for blaming the government or just about anybody else than those who are actually increasing their prices. The media engages in this misdirected blame game with increasing regularity. Corporate Australia has been pushing up their prices and recording record profits for their investors. The RBA rarely queries businesses putting up their prices but will frequently warn off any demands for higher wages. Even though it is wage earners who are suffering most from the high cost of living and reduced buying power of their incomes. Bankers like to stick fat with the big end of town, as these are their clients. Inflation facts often get lost in the emotive discussions about who is to blame and what can be done about it.
“What is inflation?
Inflation is an increase in the level of prices of the goods and services that households typically buy.
A powerful lesson from history is that low and stable inflation is a prerequisite for a strong economy and sustained full employment and growth in real wages.”
The RBA defines full employment at an unemployment rate of 4.5%, which translates into 500, 000 unemployed Australians.
Rising Prices, Rents & Property Values
House prices continue to increase around Australia despite the RBA’s best efforts to dampen the economy and spending. Rising property prices are inflationary but because we do not count these figures in the official inflationary indicators we do not talk about this. We do include rising rents, however, and these have been going through the roof for several years now. Rent increases are one of the main causes of stubbornly persistent higher inflation in the Australian economy. Rising insurance premiums is another driver of sticky inflation right now. Telstra is increasing all its mobile phone and data charges this month too, which will contribute to inflation sticking around for longer. In Australia, shareholders are king and consumers are second class concerns for corporate Australia.
The duopolies across almost every sector means that competition is at an all time low, which translates into an absence of consumer power in the capitalist equation.
A Real Lack Of Competition In Australian Markets
The failures of the ACCC to maintain a competitive market for consumers is a government responsibility. Federal governments of both political parties have failed consumers on this score again and again. They listen to their friends and donors in business over and above the majority of Australians. This is an example of a minority manipulating our democratic system for their own benefit. Corporate lobbyists for banks, miners, airlines, supermarkets, multinationals, and media interests pay for the privilege of being heard at the expense of ordinary Australians. Legislation is drafted in consultation with stake holders and tends to favour them over any meaningful change for the consumer. Money laundering via the property market continues unabated because of the interests of Australian middlemen, lawyers, accountants, and real estate agents and their lucrative cuts from dark money. This pushes up the prices of the property market, especially at the top end but, also, filters into the overall market. We have been waiting for 17 years for federal governments to do something about this money laundering from despots, organised crime, drug dealers and other nefarious folk. Scumbag professional facilitators enable bad people to enter Australia and invest their ill gotten gains here. Why haven’t governments found the gumption to do something about this? Vested interests and influence peddled by those benefitting from this continue to allow this corruption to flourish in Australia.
Why Are Many Businesses Failing?
Lots of businesses are going to the wall at the moment. Why is this happening? The current economy sets them up to fail. Lots of Australians started small businesses over the last two decades encouraged by record low interest rates and the banks consequent open lending behaviours. Combine this with an ever shrinking local manufacturing base which has meant fewer well paying jobs. However, when the economy turns, as it did in response to high inflation only the bigger players can survive the tightening of the screws. Australia has become the land of duopolies where competition is rarer than life on Mars. The failure of governments to oversee markets via the ACCC and protect competition within sectors has left us with Coles and Woolworths, the big four banks, Qantas and Virgin, News Corp and Nine Fairfax, Telstra and Optus, the insurance business controlled by a couple of big concerns, and just about every sector bristling with two or three dominant corporate entities to the detriment of consumers.
Now, it is too expensive to run a business downunder with the RBA dampening demand and economic growth stagnant.
LNP Policies An Ode To America
The cyclical nature of our economy and the piss weak efforts of governments to regulate it means unless you are onboard the blue chip buses you are going nowhere. The wealth divide between rich and poor has grown dramatically over the last decade. Those home owners who have paid off their mortgages are sitting pretty whilst the young and those that missed the boat are stuffed, economically speaking. Australia is now a country too expensive to live in for many. A nation of winners and losers, this is the result of Coalition governments borrowing economic policies and ideas from the Americans. America is a land of extremes fostered by ideologies that make it this way. A country full of guns, around 600 million, despite children being mass murdered every week by deranged gunmen. A nation without universal healthcare and where private equity firms squeeze every last dollar of profit out of hospitals and pharmaceutical companies make billion dollar profits from the misery of Americans. A racist land where whites and blacks attend segregated schools in the shadow of centuries of slavery. Australia like the US has saddled our youth with huge debts from higher education. Meanwhile TAFE in Oz is fee free, what kind of parity is this? The Liberals loaded up these higher education debts with CPI indexing ensuring these mill stones will be a much heavier financial burden during cost of living crises. Robodebt was the LNP federal government’s billion dollar betrayal of 500, 000 ordinary Australians. It cost lives and tax payers nearly a billion dollars for this massive fuck up. It was an illegal, ideologically motivated attack on the most vulnerable Australians – those receiving welfare for their economic hardship. It played to a familiar right wing tune, once again inspired by America, wealth is good, being poor is a personal failure. Therefore, those receiving welfare must be bad people and deserving of a good financial kicking. Demonising them as dole bludgers ripping off good hard working folk. This was proven to be false and way wide of the mark. PwC, the giant consulting firm, was paid many millions of dollars to provide the framework for Robodebt in a couple of reviews. Scott Morrison, Stuart Robert, Alan Tudge, and Marise Payne were all directly involved in the design and running of Robodebt. This scheme wrongly and illegally, via an algorithm matching tax records with Centrelink records, informed half a million Australians that they owed large amounts of money to Centrelink – the government welfare agency. It was a massive cockup and a betrayal of the trust that citizens place in their government and bureaucracy. Still, no senior public servant or politician has been prosecuted for this.
You can get away with murder in the white collar world of government in Australia – it happens again and again.
Inflation & Privatisation
Inflation facts must be seen in the context of the times in which they happen. Authoritarian conservative governments betraying the people. Big business squeezing every last dollar from the user pay’s model. Corporations raising their prices in profit gouging mode. A central bank in bed with the big end of town. Politicians bought and paid for via campaign donations from miners, fossil fuel interests, banks, supermarket chains, and the rest of the usual suspects. To echo Michael West, where are the studies into Australia’s neoliberal economic decades of the last 40 years? Why don’t we have any academic reviews into the privatisation and corporatisation of our public sectors and how successful or not they have been? Michael West lays the blame at the feet of the corporatisation of our university sector which is forced to finance itself from fee paying overseas students and from sponsorship from big business. Public utilities were sold off to private concerns and how has that gone for consumers, for the Australian people? Energy companies, retailers and the bills we pay for electricity and gas, have they delivered the cheaper prices we were promised? No, is the answer. Jobs were lost and a few wealthy people have made billions. This is the familiar story, which has run through the majority of privatisations in Australia.
Robert Sudha Hamilton is the author of America Matters: Pre-apocalyptic Posts & Essays in the Shadow of Trump.
©MidasWord
