Australia’s inflation rate reached more than 6.1% in the June quarter,since 2001. Moreover, Treasurer Jim Chalmers predictedthat bythe end of the year.
The consequence of rising prices is a spiralling cost-of-living crisis for working people. Anthony Albanese’s Labor governmentis not offering solutions.
The Australian Energy Market Operator (AEMO), in its July 29, said wholesale power costs soared to unprecedented levels in the three months to June.
The Reserve Bank of Australia (RBA)on August 2to 1.75% — the fourth consecutive monthly increase. This is meant toaddress growing inflation. However, working people with mortgages will facea disproportionate impact.
What is driving the growing rate of inflation and what can be done to help working people?
Manycountriesare experiencing.The United States hasaninflation rate of9.1% and Turkeyis at78.6%.
Australia’s corporate media commentators claim disruptions to supply chains caused by the war in Ukraine and the COVID-19 pandemic are the key reasons for the cost of goods rising sharply. They also argue that low interest rates have contributed to the present crisis.
The fundamental causes, however, date back to the last period of high inflation from 1973–90. Over that period, federal neoliberal policies replaced the highly-unionised manufacturing industry with largely non-unionised service industries.
The only “solutions” being offered by these same commentators are tocurbwage growth and government spending, even though they are unrelated to the problem. Reserve Bank governor Philip Lowethatinterest rate hikes, wage restraint andcuts togovernment spendingwill deal with inflation.
Similarly, TheAustralian Financial Reviewto“commit to the wage and budget restraint needed to reset the foundations for sustainable increases in Australian living standards”.
Meanwhile, workers demandingrealwage rises are told that it willhurt the economy and fuel inflation, despite wage growth being at at an all-time lowand lower than inflation.
Public sector workersinmost states have had their wages capped at — a real pay cut. At the same time,by more than 10.2% in the first quarter of this year.
Newresearch by suggeststhat rising corporate profits,not wages,havecontributed totheinflationrise. This is because 鶹ý of the capitalist class have deliberately decided to raise prices in excess of rising costs to maximise their profits.
A , released on July 26 as consumer prices were running at their highest level since the 1990s, found that a majority believe that the government can exert an influence over debt, the unemployment rate, inflation, fuel prices, workforce supply and interest rates. It also found that people are looking for more relief on cost of living pressures.
Workers should not have to pay for an inflation crisis caused by corporate greed. We must reject their argument that workers shouldtake a pay cut.
Despite Chalmerssaying in hisJuly 28 economic statement thatworkers’wages arenotto blame, the government is not coming up with solutions to address wage stagnation.His argumentthat the government needs to be “fiscally responsible”and that it supports the Coalition’s stage 3 tax cuts will not help. We should not have to waituntil 2024for a pay rise.
Solutions do exist, including: raising the “social wage”, including expandingspending on publichealth, housingandpublic transport; and raising welfare payments — especially thenotoriously low JobSeeker— above the poverty line.
We need to find the ways to strengthen unions and workers to build industrial campaignsthat can winwage rises above inflation.The government must abolish anti-union laws that weaken unions.But even without changes to the law, every successful industrial campaign boosts workers’confidence.
Finally, if the Albanese government really wants to cut wasteful spending, it can startbyand cut military spending, especially on nuclear-powered submarines.
The money saved from these measures would helpexpand a weakened public sector, raise workers’ wagesand fundinvestment in renewable energy.
[Jacob Andrewartha isanational co-convenor of .]