The real cause of inflation in Australia is "greed-price spiral"
A brutal analysis from the Australian Institute released on Friday found that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) target if companies had not squeezed consumers through the pandemic via excess price hikes.
The “dramatic expansion” of business profits has gone mostly ignored by the RBA, which has instead focused on a supposed wage-price spiral that does not exist, Dr Jim Stanford from the Australian Institute claimed.
The RBA’s obsession with wage restraint – essentially urging Australians to cop a pay decrease – is “misplaced and unfair” and interest rates would be far lower if companies had not “gouged customers” at the checkout, its analysis showed.
Australian businesses increased prices by a whopping $160 billion per year, which was far more than necessary to cover rising expenses for labour, taxes and supply chain issues, the Australian Institute found.
ACTU Secretary Sally McManus said what was occurring was a “greed-price spiral”.
“Qantas has joined Coles and Woolworths, as well as the Commonwealth Bank, in posting eye-watering profits. Inflation is being fed by these companies putting up prices far more than they need to,” she said.
“Wage growth is clearly not contributing to inflation".
