Economy

Feb 14, 2018

The government is letting us down on inflation

The highest inflation facing Australian families comes from industries where governments, at least notionally, control prices.

Glenn Dyer and Bernard Keane

Crikey business and media commentator / Politics editor

While inflation remains at levels below the Reserve Bank’s target band of 2-3% — thus preventing Australian workers’ stagnant wages from turning into real wage falls — some industries are increasing prices far more rapidly than CPI. And they all tend to have similar characteristics: they’re private oligopolies or monopolies in heavily regulated industries. In effect, the greatest sources of price rises for family budgets rely on government permission for those increases.

Take the latest accounts from toll road giant Transurban, which owns toll roads in Sydney, Melbourne, Brisbane and in the United States. Average daily traffic on Transurban Sydney’ roads — the Cross City Tunnel, Eastern Distributor, M2, M5, M7 and Lane Cove Tunnel — grew 2.9% in the first half of the financial year, but revenue from those toll roads increased 9.8% to $476 million.

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4 comments

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4 thoughts on “The government is letting us down on inflation

  1. graybul

    Stand aside US of A . . . AUSTRALIA coming through!
    Australian Big Business and their junior LNP Political Partners have the reins in their teeth. Get rid of corporate tax and bounce profit margins out to 70% 80% 90% . . . go you good thing. All without a wink or a nod; just leave it to the us corporates to chase profits whilst ‘the political masters’ snip away at workers bottom line. Take home wages must be firmly held under control.
    Whats the target Mr Turnbull (Honourable Prime Minister)? A top tier ruling class elite of say 10% 8% 6% . . . 4% holding of all Australian wealth?
    Ah well, its all about opportunity. I’m looking at cardboard carton manufacturer shares. Lots more of us workers soon to be sleeping rough eh?

  2. AR

    I thank Oliver (“more please, sir”?) for his diamond cutting brilliance about how, if the nanny state would just butt out, there would be no need to deal with “..angst about low wages”.

  3. Robin Brett

    You are dead right. The privatisation of infrastructure has by and large been a disaster, leading to hugely higher costs for consumers and vast profits for the private companies that essentially bear very little risk. There are reasons why governments did it, including the enormous increase in the cost of funding social benefits like health and education, which left less money for infrastructure, but there seems no chance of that changing any time soon.

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