The false narrative peddled by some anti-business groups and commentators that unfair business profiteering is fuelling inflation is being debunked.
Reserve Bank of Australia governor Philip Lowe and Treasury secretary Steven Kennedy have admitted as much in parliamentary testimony and other public remarks that, with the benefit of hindsight, the stimulus was overdone.
Separate analysis from Outlook Economics director and former Treasury modeller Peter Downes estimates the payments to business such as JobKeeper and cash flow support was about triple that required to compensate for losses from shutdowns. Murphy calculates the jobless rate is about 2 percentage points lower over three years than otherwise would have been the case. That’s about 300,000 extra Australians in work.Nevertheless, after the initial shock of the pandemic and lockdowns, politicians, bureaucrats and central bankers clung to the stimulus for too long and found it challenging to unwind when the worst of the downturn had passed.
Johnkehoe23 So where did inflation in goods come from? Most inputs are down, oil , commodities, staff flat but prices are up 30%+
Johnkehoe23 Blaming it on workers and unions in a period of dealing real wages is a cop out too. Most industries in Australia are oligopolistic and they exercise their market power.
Johnkehoe23 if your only tool is a hammer, everything is a nail…
Johnkehoe23 I work in public sector… what pay rise you talking about?!
Johnkehoe23 Yeah, right... Coles' earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 7.6% in H1 2023, while its rose by 9.9%. Its net profit after tax from continuing operations was A$616m, up by 11.4% from the prior-year period
Johnkehoe23 There is no doubt both greedy companies and stimulus contributed to inflation. Trying to blame popularism is naive or dishonest.
Johnkehoe23 It’s not either/or. Different dynamics in different sectors. Different fiscal, regulatory and market conditions.
Johnkehoe23 yeah right. Blame the government - Federal and State - easy targets. Couldn't possibly be the massive overwhelming price hikes and profits of corporate Australia and the multi-nationals? Seriously, what nonsense. auspol
Johnkehoe23 The seed of inflation sprouted 11 years ago. and now it's not only out of hand, it's a tool for businesses, very handy one at that.