Australia Faces Inflation; Reports Blame Corporate Profits.

Australian Inflation

Inflation in Australia is currently s at 5.1%, the highest level in 20 years, while the rate is expected to hike to 7%.

A recent report by the Australian Institute has shown that inflation is not a cause of wage increases as it can only account for just 0.6 % of the 4.1% increase in prices this year.  Rather, it is driven by the boost in profit levels in the Australian corporate sector.

Richard Denniss, Australia Institute chief economist, said

“Australia isn’t experiencing a wage-price spiral; it’s at the beginning of a price-profit spiral; the national accounts show it is rising profits, not rising costs, that are driving Australia’s inflation.” He said, “It’s a shortage of competition, not a shortage of skilled labor that is driving up the cost of living in Australia.”
Treasurer Jim Chalmers warned that families would have to endure a harsh economy in these coming months as the inflation will increase the cost of living.

He said, “It’s self-evident that inflation of the kind we’re seeing now will bring interest rate rises from the Independent Reserve Bank that will clearly slow the economy or slow our expectations for economic growth in the near term, as interest rates rise in the manner that the governor of the Reserve Bank has indicated that they will.” The latest inflation figures will be released later in the month by the Australian Bureau of Statistics

This Post Has 3 Comments

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