Andrew Dickens: If you demand restraint from the Govt, show restraint in your own business

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Recorded19 Jul 2022

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So inflation is at a 3 decade high and the Reserve Bank is scrambling to kill demand by raising interest rates.We've all heard that it's the fault of the Government for spraying around money during the lockdowns. This is money that was either borrowed or created by the Reserve Bank through money printing.Money we then spent willy nilly because there was nothing else to do. I've lost track of the number of people who said "buy property, buy anything, money's never been cheaper".And with the demand and a supply chain crisis caused by the virus and the war and a broken system we had a perfect petri dish for inflation to grow. And it did.And now every time we hear that inflation has risen, Nicola Willis comes out and slams the Labour Government saying that if it restrained it's spending we wouldn't be in this position.Now all that is true to a point except that it is ignoring two thirds of the rest of economy.So the Australia Institute, which is an independent think tank across the Tasman, has found a fascinating fact in their latest report which they released on SundayRising corporate profits are the major factor in Australia’s escalating inflation accounting for 60 percent of the growth.The national accounts show it is profits, costs, driving Australia’s inflation.They found many corporates are increasing prices to maintain profit. Not because of rising costs. While some profits are in excess of costs.While workers are being asked to make wage sacrifices in the name of controlling inflation, the data makes it clear that it is the corporate sector that needs to tighten its belt.It stands to reason that the same thing is happening here. Treasury corporate tax data showed that in the year to March 2022, corporate profits in this country had spiked by 39%.It's been the worst of years but it's also been the best of years for many businesses which is a dirty little secret no-one mentions.So if you demand restraint from the Government, you also have to show restraint in your own business. It's not right to use inflation as a mask to hide increasing your margins, like the removal company who recently doubled their rates even though inflation is running at 7 per cent.We're all in this together and the sooner we're out of it the better.See omnystudio.com/listener for privacy information.

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