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Inflation still an issue due to a combination of global money printing and corporate gouging/profiteering.
australiainstitute.org.au
"When the Australia Institute looked at the numbers, we concluded that excessive corporate profits were largely responsible for driving the lion’s share of the burst of inflation that followed COVID lockdowns. The findings were dismissed and some people even demanded we retract our research. However, the OECD—run by former Finance Minister Matthias Corman—released research that used a similar methodology and found basically the same thing as the Australia Institute: that corporate profits contributed far more to Australia’s rise in inflation than wages and other employee costs."
www.theguardian.com
"The thinktank has released evidence of what it calls a “profit price spiral”, arguing big business earnings account for 69% of the inflation that is above the reserve bank’s target range of 2-3%."
Increases in labour costs account for just 18% of the inflation above what the RBA wants to see before it eases interest rate increases. The most recent GDP data shows Australian businesses increased prices by a total of $160bn a year above taxes, labour and other costs.
Stanford says the evidence shows the additional billions of dollars in company profits have led the soaring inflation Australia is experiencing.
And that without those profit gains, inflation since the pandemic would have risen much more slowly, at just 2.7%.
Stanford says the research shows company profits, not workers’ wages, are the culprit for Australia’s inflation issues and that the RBA and government should be focusing on those rather than targeting workers through rising interest rates and low wage growth.
“We’ve been told a story that workers need to restrict wage growth and accept a permanent reduction in living standards in order to fix inflation,” he said.
“This evidence shows that’s an economic fairytale.
“ABS data shows that without excess price hikes through the pandemic, inflation would likely be within the RBA target band, and hence there would be no need for the nine extreme, back-to-back interest rate rises that are crushing households and mortgage holders, fuelling the cost of living crisis.”
Note: both articles are from February this year but I believe the same trend has basically continued since then.
Just to be clear the evidence shows wage increases (which have been below the rate of inflation for years) have very little to do with inflation despite the nonsense that people like Value Collector keep espousing.
Funny business: Why you're paying the price for corporate greed
Australians are paying prices that are too high, too often.
"When the Australia Institute looked at the numbers, we concluded that excessive corporate profits were largely responsible for driving the lion’s share of the burst of inflation that followed COVID lockdowns. The findings were dismissed and some people even demanded we retract our research. However, the OECD—run by former Finance Minister Matthias Corman—released research that used a similar methodology and found basically the same thing as the Australia Institute: that corporate profits contributed far more to Australia’s rise in inflation than wages and other employee costs."
‘An economic fairytale’: Australia’s inflation being driven by company profits and not wages, analysis finds
Australia Institute warns of a ‘profit price spiral’ and calls for shift in RBA and government narrative towards corporations
"The thinktank has released evidence of what it calls a “profit price spiral”, arguing big business earnings account for 69% of the inflation that is above the reserve bank’s target range of 2-3%."
Increases in labour costs account for just 18% of the inflation above what the RBA wants to see before it eases interest rate increases. The most recent GDP data shows Australian businesses increased prices by a total of $160bn a year above taxes, labour and other costs.
Stanford says the evidence shows the additional billions of dollars in company profits have led the soaring inflation Australia is experiencing.
And that without those profit gains, inflation since the pandemic would have risen much more slowly, at just 2.7%.
Stanford says the research shows company profits, not workers’ wages, are the culprit for Australia’s inflation issues and that the RBA and government should be focusing on those rather than targeting workers through rising interest rates and low wage growth.
“We’ve been told a story that workers need to restrict wage growth and accept a permanent reduction in living standards in order to fix inflation,” he said.
“This evidence shows that’s an economic fairytale.
“ABS data shows that without excess price hikes through the pandemic, inflation would likely be within the RBA target band, and hence there would be no need for the nine extreme, back-to-back interest rate rises that are crushing households and mortgage holders, fuelling the cost of living crisis.”
Note: both articles are from February this year but I believe the same trend has basically continued since then.
Just to be clear the evidence shows wage increases (which have been below the rate of inflation for years) have very little to do with inflation despite the nonsense that people like Value Collector keep espousing.
