Politics and journalism work hand in hand in sending messages of either hope or despair.
The destructive nature of breaking down political opponent’s policies, playing blame games and personal attacks used to entice votes away from the opposing parties, offer no viable alternative, but a “trust us, trust me, I am no where near as bad as the other mob” as the only reason to vote. Friendly media amplify the message, heaping scorn on the other side.
They have no idea how to solve the problem, trust us.
Repeatedly we hear and read of the ‘COST OF LIVING CRISIS’ and the implication that the solution reflects the competence of the government.
The various aspects of the ‘COST OF LIVING CRISIS’ include the cost of renting or purchasing a home, the weekly grocery bill, the services we access, transport, health, insurance, in other words the day-to-day existence costs, the need for food, clothing, shelter, security and so forth. The monthly release of inflation through CPI numbers exacerbates the fears, the fear of another interest rate hike that will impact household budgets with another mortgage rate increase and flow on effect of seemingly never-ending price hikes.
In battling this crisis, the government through the Fair Work Act has seen the minimum wage increase to $24.10 per hour or $915.50 per week for a 38-hour week, an increase of 3.75%, while the annual inflation rate for 2023-24 is forecast at 3.8%. Coupled with the new income tax rates, workers will see their take home pay exceed inflation. Real wages growth, an anomaly in the system, that has not happened in over 12 years.
But how helpful is really for those earning the minimum wage?
The cost-of-living crisis affects different people in different ways, and by analysing where these costs are we can see the differences.
In determining the rate of inflation, the categories used include a basket of goods and services which include the major expenses averaged out over the population. As such, it really is just a guide to how inflation will affect us as individuals.
So, pulling apart the figures, let’s see what happens:
Housing: In calculating the CPI, the cost of housing contributes 22% of the basket of goods and services. In other words, that is how much of the income of the average household spends on servicing a mortgage or pays in rent. How well does that work if a person on the minimum wage of after-tax earnings of about $800 per week looking for a one bedroomed apartment near one of the capital cities. Can we find somewhere to live for less than $200 per week?
Rents have increased by 8.5% in the year 2023-24.
The major Australian banks reported a combined profit increase of 12.5% for the 2023 financial year or $32.5 billion, while mortgage holders saw an average increase of around $100 per month.
Compare that with someone on the same wage who purchased a home ten years ago and is paying a mortgage of about $250 per week, or even an older person, retired and living off a pension and a superannuation pension top up to achieve the same income, their housing to service the debt of $0 per week, since the home is more likely fully paid for. So the cost of having a shelter varies incredibly according to each individual’s position.
So how is an alternative government going to resolve the housing crisis to somehow make it that 22% of a person’s or family’s income is the amount they will pay for the roof over their head? The 22% may be an average, but that means nothing to the person paying $550 a week for a two bedroomed apartment.
Ah, that’s right, letting all those immigrants in is the problem: they let in all those weird foreigners, trust us, we stopped the boats.
Food and non-alcoholic beverages: Average expenditure is calculated to be about 17% of the household budget. But that too varies from household to household, depending on a number of factors including how many mouths there are to feed, and what the supermarket ‘specials’ are this week. Low-income earners, especially young families (or families with teenagers, have you seen how much a 16-year-old can eat?). And the price of groceries just goes up and up.
Food inflation for the financial year is at 7.5%
Supermarkets are making record profits, squeezing suppliers, but somehow ‘they’ cannot solve the problem, despite grilling the CEOs of the supermarkets, bullying them in fact. ‘They’ are not able to control the cost of living.
Public inquiries into supermarket practices have shone a light into the business practices used, displaying a power imbalance with suppliers and a contempt for their customers. With a continuing pressure from government and its agencies, there is hope that the greed and arrogance displayed may provide a better outcome for both consumers and suppliers.
Insurances and Financial services: The CPI basket of goods and services estimates that insurance and financial services make up about 5% of household incomes. Yet we have seen mortgage rates increase dramatically as the Reserve Bank has raised them in an effort to slow the rate of inflation. Anyone with a mortgagee has seen their payments go up, and how much is dependent on when the house was bought and how much is still owing on the borrowings.
Insurance though is the biggest killer. In some areas, and it seems to depend to some extent on the post code of your address rather than the actual location within that post code, home and contents have increased in the order of three or four times. Vehicle insurance too has seen seemingly excessive increases. Somehow, as a car ages and loses value, it costs more to insure, even if no claims have been made.
Part of the problem could just be that the owners of insurance companies have been consolidated to a very small group of investors, despite there being a number of insurance ‘brands’, the ownership rests in few hands. In WA, we used to have the SGIO, a state government owned insurance group, but that was privatised and is now owned by IAG which nine insurance ‘brands’ including NRMA, Wesfarmers Insurance plus insurers in New Zealand and various other countries. There are financial deals with various international insurance groups, sharing ownership across a diverse number of investors across Asia.
Vehicle insurance rates have increased by over 16% in 2023-24.
Home insurance has increased by 56%, but according to the Australian Financial Review, insurers are making a loss.
They cannot manage the economy, Inflation is out of control, “They do not have a clue how to control it.’ Right?
Furnishings, household equipment and services: I guess that includes gas and electricity, and those services have become a political football. In the rush by previous state governments to privatise these services, the price has become very much a supply and demand conundrum with power prices varying from minute to minute almost, leaving the consumer to wonder who else is running the air conditioner on a stinking hot day, and whether they can afford to run it for just a few minutes to take the edge off, or the price of gas is established by how much the exporters can get from it on the open market, charging those prices to households which again vary from time to time. The cold of winter has seen prices rise by 23% as the power generating companies capitalise of the increased demand for home heating.
Here they have tried to do something, helping households with electricity credits, but that is a short-term fix. They are encouraging the use of ugly wind turbines, both on farmlands and offshore, spoiling the views we have taken for granted and solar farms which only work when the sun shines, We have the answer, NUCLEAR! despite every expert telling us that it will take forever to build at incredibly high prices, but heck, at least it is an answer… or perhaps a deflection, better than admitting that we really don’t have a clue.
Somehow, it is easy to ignore the growth of solar energy and battery storage which is proving to be reliable and cost effective.
Some good news; the price of fuel has come down. Last week the average price for a litre of unleaded fuel was around $1.90, this week, $1.85, but then of course we do have the Fuel Price Cycle, a cynical policy for the fuel industry to charge the most in payday and less when people have less available spending capacity. The unfathomable bit about fuel pricing is that there may be four or five service stations within a kilometre and the price can vary by as much as 20 cents a litre.
Ah. the components of the ‘COST OF LIVING CRISIS’ are grist for the fear mill. They cannot handle it; they cannot control the cost of living. They have forced the price of living up, forcing people into homelessness while at the same time allowing all those immigrants in. They are driving inflation through forcing up wages, actually trying to force employers to pay a living wage, they will cause businesses to close, causing mass unemployment.
And so it goes, lots of fear, lots of uncertainty, all caused by them.
We hear it in the political debate, we see the fear being raised the evening news, in headlines, through unfiltered social media.
The good news comes in the financial reporting, which is due in September and October, where we will see the profit reports for those companies listed on the Stock Exchange, and the dividends being paid to shareholders. I can see the headlines already! “Good news, the economy is going really well, the wealthy are getting healthy returns on their investments, and with franking credits being taken, a tax-free bonus.”
The cost-of-living crisis is promoted as a political fail, a confirmation that they don’t know what they are doing with the economy. How often do we hear that Labor cannot manage the economy?
Inflation, inflation, inflation. But where is the headline explaining how landlords and the banks are profiteering from the most vulnerable, where is the ongoing reporting on the pricing and continuing holding the supermarkets to task for their role in scalping both suppliers and consumers? Where the insurance giant controlling most of Australia’s insurance brands is taking us all for a ride?
Those are not the headlines and reporting the wealthy want to see, they are not the sorts of things we should be focussing on.
It’s the increased wages, pandering to the needs of workers that is sending businesses to the wall, killing the economy. Right!
Mmmmm. Maybe.
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Beware the faux ‘free market’ libertarian trap promoted by the RW MSM, informed by think tanks, citing a generic ‘cost of living crisis’ meme, repetitively.
Win win, denigrate ALP government and also call for tax cuts and/or superannuation contribution cuts for employers, by manipulating voters who do not have a ‘cost of living crisis’.
Yeas, rig the system so there is always a pod of working poor, desperate for work.
For a very short time, working people got a fair go. but igt is back to desperation time, unions are evil, compromising the profits of business, full time employees are a drain on resources, contract is the way to go, and casual on hourly rates, an ‘on demand’ workforce, and services are all self employed workers, like the gig economy.Need a delivery, call for a courier.
I did hear a couple of months back the former Reserve Bank boss, Philip Lowe suggest that GST needs to be increased. That regressive tax taxes the lowest earners more.
We have elections coming up, Here in WA, the state election is in March, Federal yet to be announced, but due in May.
There is work to be done.
If you live North of the Tropic of Capricorn (latitude approximately 23°27′ S of the Equator) you will have seen staggering increases in property insurance, in particular Home and Contents, as insurers have either quit the market in tropical regions or have faced substantial increases in their reinsurance costs which of course they pass on.
With the incidence of cyclones (including related wind, rain, rainwater, rainwater run-off, storm surge, and riverine flood damage caused by a cyclone) the insurance industry has drawn arbitrary lines above and below the equator where they may elect not to provide insurance services and, as the whole of the property insurance market is now privately operated there is no fall-back position on an insurer of last resort as there used to be – state government insurance offices having all been sold off.
The federal government have set up a cyclone reinsurance pool in which all insurers must participate and which will guarantee ten billion dollars in backup reinsurance with the objective of bringing down insurance costs in the North and encouraging insurers back into the region.
If you are in this Northern region and you insure your home, you should see premium reductions this year in the order of twenty percent but you may have to shop around and demand they pass on the savings.
It’s all explained here : https://arpc.gov.au/reinsurance-pools/cyclone/
It seems all are trapped (incl the govts) by the feckless mainstream media bosses, and their BS prognostications, fear mongering and ludicrous predictions. Right across the world the public are held to ransom by those bastards. They deliberately don’t report on events and facts extant, rather they buddy-up to the gougers, concealing real cause and effect, instead driving a false narrative to generate fear, mistrust and sensation to grease the profiteers and their advertisers, who in turn grease the vaults of the msm.
That corrupt, spinless politics allowed them to gain a stranglehold has, along with the disaster of ‘privatization’ and idiot economists, are the essential ingredients of the attack of the neo-liberals and neo-cons, that continue to wreak havoc and wreck the world. It’s all trumpery driven mainly by the unreconstructed aristocrats and imperialists, Britain, America and France.
That there’s a revolution underway, is a tribute to the young and science, and non-aligned intellectuals and reporters. It’s slow but effective, giving rise to the desperate screech of the putative plutocratic conquerors of democracy. Just how and when the tipping point arrives putting power and equity back into the hands of ordinary folk and bringing it to affect is of course anybody’s guess.
I have a rental property, no mortgage, it and some investments is my retirement income, not a lot but it keeps me out of the clutches of Centrelink, in the last two years the insurance for it has increased 75%, luckily I can claim it on my tax, but for those households who are not so lucky this is a huge increase.
In 55 years of having house insurance I have not made one, single, claim.
My own home is not insured, I know, as there is a little water course running behind my house, which is 3 meters below my back fence, and no insurance company will insure it, not for any amount of money. in the worst floods a couple of years ago the water course went over the far bank but did not even come up the bank on my side as the other side has a fairly flat area and the water course drains into a large swampy area.
I think more and more people will find that they cannot either afford insurance or their properties are uninsurable.
I understand the way insurance works but surely for long term insurers who have not had a claim in many, many years there should be a no claim bonus system.
The sorry truth of the matter is that privatisation only benefits the corporations that purchase the public services at cut prices against replacement cost, thanks to their ever generous ”political donations” to both major parties.
Think the Sydney tollway system, a licence to print money for the cartel of bankers now owning that infrastructure ….. and extracting ever-increasing costs from motorists … with these costs significantly increasing the cost of living.
Cocky, too true. I spent two years working on the M7 motorway here in Sydney as an f/t external contractor. The management liked me for some strange reason, and I got invited to end of year functions with the road crew & bosses. An accountant, at one of these pissups, bragged to me about the business. His exact words were “this is a pure money-making machine.”
The great fantasies of a privatisation promoter…”P” for privatisation.., and penises, pussy, power, profits, privilege, predation, pillaging, pornomaniacal posing.