Economy – Page 2 – Michmutters

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Australia

Perth storms: Homeowners facing massive waits for repair work on damaged houses

Perth storms: Homeowners facing massive waits for repair work on damaged houses

Homeowners trying to get storm-damaged properties repaired face massive waits as tradies are nearly impossible to hire.

The well-documented skills and supply shortages blighting the State have left people hoping to fix their houses wondering where to turn.

One roofing company said it had been inundated with 60 phone calls a day last week, while another said it was already booked out until next year.

The savage storms knocked out power to Perth Airport as well as 35,000 homes and wreaked havoc across Perth and the south-west last week, leaving a trail of damaged properties in their wake.

It’s not just homes that are affected. Canning Mosque in Queens Park was severely damaged during the storm when a large tree was uprooted and smashed into the prayer hall.

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US

US Senate approves bill to fight climate change, cut drug costs | Business and EconomyNews

US Senate approves bill to fight climate change, cut drug costs | Business and EconomyNews

Democrats in the United States have passed a sweeping $430bn bill intended to fight climate change, lower drug prices and raise some corporate taxes, in a major victory for President Joe Biden.

The package, known as the Inflation Reduction Act, passed the Senate on Sunday by a 51-50 party line vote with Vice President Kamala Harris casting the tie-breaking ballot.

“The Senate is making history,” an elated Senate Majority Leader Chuck Schumer said, after pumping his fists in the air as cheered Democrats and their staff members responded to the vote with a standing ovation.

“To Americans who’ve lost faith that Congress can do big things, this bill is for you,” he said. “This bill is going to change America for decades.”

Schumer said the legislation contains “the boldest clean energy package in American history” to fight climate change while reducing consumer costs for energy and some medicines.

The action sends the measure to the House of Representatives for a vote, likely Friday when representatives plan to reconvene briefly during a summer recess. They are expected to pass it, which would then send the bill to the White House for Biden’s signature. In a statement, Biden said he looked forward to signing the bill into law.

Democrats hope the bill’s passage will help the party’s House and Senate candidates in the November 8 midterm elections at a time when Biden is suffering from anemic public approval ratings amid high inflation.

Senators engaged in a round-the-clock marathon of voting that began Saturday and stretched late into Sunday. Democrats swatted down some three dozen Republican amendments designed to torpedo the legislation.

Conservative lawmakers have criticized the bill as wasteful spending, with top Republican Senator Mitch McConnell accusing Democrats of voting to “double down on their economic disaster”.

‘Biggest climate investment in US history’

The legislation is aimed at reducing carbon emissions and shifting consumers to green energy, while cutting prescription drug costs for the elderly and tightening enforcement on taxes for corporations and the wealthy.

The bill would invest nearly $375bn over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles.

It’s broken down to include $60bn for a clean energy manufacturing tax credit and $30bn for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels. The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.

For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. There are tax breaks for buying electric vehicles, including a $4,000 tax credit for purchase of used electric vehicles and $7,500 for new ones.

In all, Democrats believe the strategy could put the country on a path to cut greenhouse gas emissions 40 percent by 2030, and “would represent the single biggest climate investment in US history, by far”.

“This is a historic achievement,” said Gregory Wetsone, president of the American Council on Renewable Energy.

“This represents the first time in the United States that we have seen Congress take a serious effort to deal with the climate problem. And this bill, the programs it includes, are ones we have been advocating for many years and I think will have a huge impact allowing the clean energy transition that we know we are going to need to deal with climate change,” he told Al Jazeera .

Lower prescription drug costs

On the healthcare front, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies for the first time, saving the federal government some $288bn over the 10-year budget window.

Those new revenues would be put back into lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies. It also extends expiring subsidies that help 13 million people afford health insurance.

The bill’s final costs were being recalculated, but overall it would raise more than $700bn over a decade. The money would come from a 15 percent minimum tax on a handful of corporations with annual profits above $1bn, a 1 percent tax on companies that repurchase their own stock, bolstered IRS tax collections, and government savings from lower drug costs.

With some $740bn in new revenue and around $440bn in new investments, the bill promises to put the difference of about $300bn toward deficit reduction.

The latest package is barely more than one-tenth the size of Biden’s initial 10-year, $3.5 trillion rainbow of progressive aspirations in his Build Back Better initiative. It abandoned earlier proposals for universal preschool, paid family leave, and expanded child care aid. That plan collapsed after conservative Senator Joe Manchin, a Democrat, opposed it saying it was too costly and would drive inflation.

Nonpartisan analysts have said the Inflation Reduction Act would have a minor effect on surging consumer prices.

Republicans said the bill would undermine an economy that policymakers are struggling to keep from plummeting into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, making it harder for people to cope with the nation’s worst inflation since the 1980s.

“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” McConnell, the Senate Minority leader, argued.

He said spending and tax increases in the legislation would eliminate jobs while having an insignificant effect on inflation and climate change.

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Categories
Australia

Perth real estate: Suburbs where it now costs more than $1m to buy a house

Perth real estate: Suburbs where it now costs more than $1m to buy a house

Eleven suburbs have joined the $1m median house price club as values ​​continue to climb in Perth.

While other states are seeing house prices fall, Perth has lagged behind most of the other capitals.

It means despite rising interest rates and cost of living pressures, the housing market in WA has soared in the past year.

Six of the 11 suburbs recorded more than 20 per cent price growth during the 2021-22 financial year, according to the Real Estate Institute of Western Australia.

Marmion, Mount Hawthorn, North Perth, Fremantle and Kensington had their median house prices tip above $1.1m at the end of June.

Gwelup, Booragoon, Karrinyup, Leederville, Iluka and Como reached $1m or more.

The top suburb is Marmion, which now has a median price of $1.27m — an increase of 32 per cent in the past year.

House Price Drop
Camera IconEleven suburbs have joined the $1m median house price club in Perth. Daily Telegraph/Gaye Gerard Credit: News Corp Australia

REIWA president Damian Collins said people had started to gain confidence in WA’s strong economy and property market, which had translated into more sales at the top end.

“All of these suburbs have had medians hovering below $1m for quite some time,” he said.

“It is impressive to see the demand for houses in these suburbs hold strong throughout the 2021-22 financial year, now placing them in Perth’s luxury market.”

Mr Collins said Perth’s premium market was attracting a lot of interest from buyers leading to strong price growth.

“If you are considering selling in one of these suburbs, now would be an opportunistic time to capitalize on this demand,” he said.

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US

Senate passes Democrats’ sweeping climate, health and tax bill, delivering win for Biden

Senate passes Democrats' sweeping climate, health and tax bill, delivering win for Biden

Washington— The Senate on Sunday passed Democrats’ sweeping economy package designed to combat climate change, address health care costs and raise taxes on large corporations, marking a crucial achievement for President Biden and his party as they look to maintain their hold on Congress in the November midterm elections.

The plan, called the Inflation Reduction Act, cleared the upper chamber by a vote of 51 to 50 along party lines, with Vice President Kamala Harris providing the tie-breaking vote in the evenly divided Senate. Democrats used a fast-track legislative process known as reconciliation to pass the measure in the face of unanimous opposition from Republicans.

“It’s been a long, tough and winding road but at last, at last, we have arrived,” Senate Majority Leader Chuck Schumer said in remarks on the Senate floor as members prepared to vote for final passage. “Today, after more than a year of hard work, the Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century.”

The vote came after a marathon session that lasted through the night and into Sunday afternoon, with Democrats breaking into applause as members cast their final votes. In a process known as a “vote-a-rama,” Republicans offered a slew of amendments that Democrats successfully swatted down over nearly 16 hours of debate.

GOP senators did manage to block a provision that would have capped the price of insulin at $35 a month for those covered under private health care plans. Democrats needed 60 votes to waive reconciliation rules and keep that part of the bill, but it failed 57 to 43, with seven Republicans joining Democrats in support of the measure.

House Democratic leaders announced last week the lower chamber will return from its month-long recess on Friday to take up the legislation, which is expected to pass.

Mr. Biden praised Senate Democrats for passing the plan and acknowledged it required “many compromises.” He urged the House to swiftly approve the bill.

“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” the president said in to statement. “I ran for president promising to make government work for working families again, and that is what this bill does — period.”

The package is the culmination of months of negotiations over Mr. Biden’s domestic policy agenda, which at times appeared to be on life support but was revived late last month with the surprise announcement of an agreement between Schumer and Sen. Joe Manchin, a moderate Democrat from West Virginia.

WASHINGTON, DC - AUGUST 6: Senator Joe Manchin (D-WV) chats wit
Sen. Joe Manchin chats with his staffers on Capitol Hill in Washington on Aug. 6, 2022.

Shuran Huang for The Washington Post via Getty Images


While the legislation is much more narrow than the sprawling $3.5 trillion proposal put forth by Mr. Biden last year, the tailored package had the backing of Manchin and Sen. Kyrsten Sinema, a Democrat from Arizona whose support was crucial.

Still, Democrats praise the plan as their answer to addressing rising consumer prices and for its nearly $400 billion investment in fighting climate change, the largest ever. The package allows Medicare to negotiate prescription drug prices, a key Democratic priority that is expected to save hundreds of billions of dollars over the next 10 years. It also extends enhanced health insurance subsidies that were set to expire at the end of the year, and imposes a 15% minimum tax on most corporations that make more than $1 billion each year.

The corporate tax provision emerged as a point of contention as senators neared a final vote on Sunday. Seven Democratic senators — Sinema, Jon Ossoff, Raphael Warnock, Catherine Cortez Masto, Maggie Hassan, Mark Kelly and Jacky Rosen — joined Republicans in backing an amendment put forward by GOP Sen. John Thune of South Dakota exempts some firms with private equity backing from the 15% minimum corporate tax rate. That amendment passed 57 to 43.

To boost clean energy, the measure includes tax credits for buying electric vehicles and manufacturing solar panels and wind turbines. It also provides rebates for consumers who buy energy efficient appliances and provides $4 billion for drought relief.

Schumer lauded the bill as the “boldest climate package” in US history, and called it a “game-changer” and “turning point.”

“It’s been a long time coming,” he said.

One piece of Democrats’ drug-pricing plan — imposing penalties on drug manufacturers that raised prices beyond inflation on private insurers — was removed after it was reviewed by Senate parliamentarian Elizbeth MacDonough. Her approval of the rest of the package, however, cleared the way for the upper chamber to move forward with its consideration of the bill.

The Congressional Budget Office estimates the legislation will cut the deficit by $102 billion over the next 10 years. Republicans, though, argued the plan will have little impact on inflation and instead raise taxes while leading to job losses.

in an interview with “Face the Nation” on Sunday, Sen. Rick Scott, a Republican from Florida, claimed Democrats’ drug pricing plan will harm seniors, while the tax component will increase taxes on Americans.

“Why would you be increasing the cost of government? We’re increasing taxes,” he said.

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US

Parliamentarian weakens Democrats’ drug plan in Inflation Reduction Act, as Senate prepares to vote

Parliamentarian weakens Democrats' drug plan in Inflation Reduction Act, as Senate prepares to vote

The Senate parliamentarian on Saturday dealt a blow to Democrats’ plan for curbing drug prices but left the rest of their sprawling economic bill largely intact as party leaders prepared for the first votes on a package containing many of President Joe Biden’s top domestic goals.

Elizabeth MacDonough, the chamber’s nonpartisan rules arbitrator, said lawmakers must remove language imposing hefty penalties on drugmakers that increase their prices beyond inflation in the private insurance market. Those were the bill’s chief pricing protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or bought on their own.

Other major provisions were left intact, including giving Medicare the power to negotiate what it pays for pharmaceuticals for its 64 million elderly recipients, a longtime goal for Democrats. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a $2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries.

Her rulings came as Democrats planned to begin Senate votes Saturday on their wide-ranging package addressing climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they believe they have the unity they will need to move the legislation through the 50-50 Senate, with Vice President Kamala Harris expected to cast votes to break ties, since all of the Republicans are expected to oppose the bill.

“This is a major win for the American people,” Senate Majority Leader Chuck Schumer, DN.Y., said of the bill, which both parties are using in their election-year campaigns to assign blame for the worst period of inflation in four decades.

“At a time of seemingly impenetrable gridlock, the inflation reduction act will show the American people that when the moment demands it, Congress is still capable of taking big steps to solve big challenges,” Schumer said. “We will show the American people that, yes, we are capable of passing a historic climate package and rein in drug companies and make our tax code fairer.”

In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “are misreading the American people’s outrage as a mandate for yet another reckless taxing and spending spree.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families yet a second time.”

Dropping penalties on drugmakers reduces incentives on pharmaceutical companies to restrain what they charge, increasing costs for patients.

Erasing that language will cut the $288 billion in 10-year savings that the Democrats’ overall drug curbs were estimated to generate — a reduction of perhaps tens of billions of dollars, analysts have said.

Schumer said MacDonough’s decision about the price cap for private insurance was “one unfortunate ruling.” But he said the surviving drug pricing language represented “a major victory for the American people” and that the overall bill “remains largely intact.”

The ruling followed a 10-day period that saw Democrats resurrect top components of Biden’s agenda that had seemed dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a broad package that, while a fraction of earlier, larger versions that Manchin derailed, would give the party an achievement against the backdrop of this fall’s congressional elections.

The parliamentarian also signed off on a fee on excess emissions of methane, a powerful greenhouse gas contributor, from oil and gas drilling. She also let stand environmental grants to minority communities and other initiatives for reducing carbon emissions, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.

She approved a provision requiring union-scale wages to be paid if energy efficiency projects are to qualify for tax credits, and another that would limit electric vehicle tax credits to those cars and trucks assembled in the United States.

The overall measure faces unanimous Republican opposition. But assuming Democrats fight off a nonstop “vote-a-rama” of amendments — many designed by Republicans to derail the measure — they should be able to muscle the measure through the Senate.

The House is returning Friday to vote on the bill.

“What will vote-a-rama be like. It will be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments. He said that in supporting the Democratic bill, Manchin and Sinema “are empowering legislation that will make the average person’s life more difficult” by forcing up energy costs with tax increases and making it harder for companies to hire workers.

The bill offers spending and tax incentives for moving toward cleaner fuels and supporting coal with assistance for reducing carbon emissions. Expiring subsidies that help millions of people afford private insurance premiums would be extended for three years, and there is $4 billion to help Western states combat drought.

There would be a new 15% minimum tax on some corporations that earn over $1 billion annually but pay far less than the current 21% corporate tax. There would also be a 1% tax on companies that buy back their own stock, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to strengthen its tax collections.

While the bill’s final costs are still being determined, it overall would spend more than $300 billion over 10 years to slow climate change, which analysts say would be the country’s largest investment in that effort, and billions more on health care. It would raise more than $700 billion in taxes and from government drug cost savings, leaving about $300 billion for deficit reduction — a modest bite out of projected 10-year shortfalls of many trillions of dollars.

Democrats are using special procedures that would let them pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.

It is the parliamentarian’s job to decide whether parts of legislation must be dropped for violating those rules, which include a requirement that provisions be chiefly aimed at affecting the federal budget, not imposing new policy.

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Categories
US

CNBC’s Rick Santelli reacts to US jobs report

CNBC's Rick Santelli reacts to US jobs report

CNBC analyst Rick Santelli was beside himself on Friday as he reacted on the air to the latest federal data showing that American employers added 528,000 new jobs in July — more than double the anticipated number.

“It is a whopper!” Santelli told CNBC’s “Squawk Box” on Friday.

Economists expected that there would be an additional 250,000 jobs in July, prompting Santelli to say: “528,000! 528,000, basically double the expectations! And 528,000 is the best number since February when we were over 700,000, revisions to the last two months are 28,000.”

Maria Bartiromo, the Fox Business news anchor, was similarly stunned when the latest jobs figures were announced on Friday morning.

“Wow, that’s pretty incredible,” Bartiromo, a strident critic of the Biden administration, said live on the air as she was told about the numbers.

While the strong jobs market and the record low levels of unemployment persist, analysts said that it does not necessarily bode well for the Fed’s efforts to bring down sky-high levels of inflation.

The major indexes on Wall Street fell in response to the latest jobs report as investors gird for more aggressive interest rate hikes by the central bank.

“The tinder-box hot job market indicates that the Federal Reserve’s resolve to fight inflation is not bearing fruit yet,” Sung Won Sohn, an economics professor at Loyola Marymount University, told The Post.

Son cited labor shortages in key sectors of the economy including airlines, leisure and hospitality, and restaurants.

“The lethargic labor participation rate shows that workers are not yet worried about a recession and willing to wait for better opportunities,” Sohn said.

"It's a whopper" Santelli said upon learning that the US added 528,000 new jobs in July.
“It is a whopper,” Santelli said upon learning that the US added 528,000 new jobs in July.
Twitter/@SquawkCNBC

“The 5.2% wage gain from a year ago is not enough to entice them to get back to work.”

The Dow Jones Industrial Average was down 0.05% as of 10:23 am on Friday while the S&P 500 fell 0.08%. The Nasdaq shed 0.04%.

“This is a job market that just won’t quit,” Becky Frankiewicz, the president and chief commercial officer for ManpowerGroup, told The Post.

“The economic indicators are signaling caution, yet American employers are signaling confidence.”

Jeffrey Roach, the chief economist for LPL Financial based in Charlotte, told The Post: “The decline in unemployment and the participation rate will frustrate central bankers since a tighter labor market adds inflation risk to the economy.”

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Business

China Evergrande to get $818mn for scrapping stadium deal

China Evergrande to get $818mn for scrapping stadium deal

Embattled Chinese property giant Evergrande has canceled a contract to build a football stadium in a southern city in return for 5.52 billion yuan ($818 million), it said in a filing.

The real estate behavior has been involved in restructuring negotiations after racking up $300 billion in liabilities in the wake of Beijing’s crackdown on excessive debt and rampant speculation in the property sector.

In a filing to the Hong Kong stock exchange late Thursday, Evergrande said “the group’s liquidity issue has adversely affected the development of and construction on the land” in Guangzhou.

The contract allowed for commercial and sports uses of the land for 40 years, as well as other business uses for 50 years, the filing said.

The latest refund will enter a project escrow account designated by the government and will be used to settle debts relating to the deal, Evergrande said.

Evergrande, one of China’s biggest developers, has scrambled to offload assets in recent months, with chairman Hui Ka Yan paying off some of its debts using his personal wealth.

Its troubles are emblematic of the problems rippling across China’s massive property sector, with smaller companies also defaulting on loans and others struggling to raise cash.

bys/oho/dan

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Business

Inflation-fighting BoE poised to unleash big rate hike

Inflation-fighting BoE poised to unleash big rate hike

The Bank of England is expected Thursday to follow other major central banks with an aggressive interest rate hike to tackle surging inflation.

The BoE is tipped to lift its main rate by 0.50 percentage points — the biggest amount in more than a quarter of a century.

With inflation spiking globally following Russia’s invasion of Ukraine, the US Federal Reserve and the European Central Bank sprang large hikes last month of 0.75 and 0.50 percentage points respectively.

“After the ECB and the Fed delivered oversized hikes at their July meetings, the Bank of England is likely to feel similar pressure to up the ante at its August meeting,” said BNP Paribas economist Amarjot Sidhu in a note to clients.

The BoE, granted operational independence from the government over monetary policy in 1997, will reveal its latest rate decision at 1100 GMT on Thursday alongside its latest outlook.

That would take borrowing costs to 1.75 percent, at a level last seen in December 2008.

Inflation has also raced higher on supply-chain woes, including labor market shortages in the wake of Brexit, and strong demand for goods and services as the Covid pandemic recedes.

Yet the bank predicts UK inflation will spike to 11 percent later this year — and it was expected to lift this guidance on Thursday.

That could take the average UK household energy bill above £3,000 ($3,600) per year.

“Higher inflation for even longer is the kind of scenario that spooks central banks.”

Economists meanwhile argue that a large rate hike damages the nation’s recovery from the coronavirus pandemic — and risks the prospect of recession.

“The… anticipated hike would be harmful to the economy and pile on the pain for people across the country,” said Nigel Green, deVere’s boss of financial consultants.

Until now, the BoE has not hiked its rates by more than 0.25 percentage points each time.

Liz Truss is currently ahead in the polls against fellow Conservative and former finance minister Rishi Sunak.

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Business

Turkey’s inflation jumped to a 24-year high of 79.6 percent in July | Inflation News

Turkey's inflation jumped to a 24-year high of 79.6 percent in July | Inflation News

Turkey’s inflation has been fueled by the lira’s continued decline as well as the economic consequences of Russia’s invasion of Ukraine.

Turkish inflation rose to a fresh 24-year high of 79.6 percent in July, data showed on Wednesday as the lira’s continued weakness and global energy and commodity costs pushed prices higher, though the price rises came out below forecasts.

Inflation began to surge last autumn, when the lira slumped after the central bank gradually cut its policy rate by 500 basis points to 14 percent in an easing cycle sought by President Recep Tayyip Erdogan.

Month-on-month, consumer prices rose 2.37 percent in July, the Turkish Statistical Institute (TUIK) said, below a Reuters news agency poll forecast of 2.9 percent. Annually, consumer price inflation was forecast to be 80.5 percent.

Jason Tuvey, senior emerging markets economist at Capital Economics, said annual inflation may be approaching a peak, with energy inflation falling sharply and food inflation appearing close to topping out.

“Even if inflation is close to a peak, it will remain close to its current very high rates for several more months,” Tuvey said in a note.

“Sharp and disorderly falls in the lira remain a key risk,” he said.

The biggest annual rise in consumer prices was in the transportation sector, up 119.11 percent, while food and non-alcoholic drinks prices climbed 94.65 percent.

Inflation this year has been fueled further by the economic impact of Russia’s invasion of Ukraine, as well as the lira’s continued decline. The currency weakened 44 percent against the United States dollar last year, and is down another 27 percent this year.

The lira was trading flat after the data at 17.9560 against the dollar. It touched a record low of 18.4 in December.

Annual inflation is now at the highest level since September 1998, when it reached 80.4 percent and Turkey was battling to end a decade of chronically high inflation.

Last week’s Reuters news poll showed annual inflation was seen declining to some 70 percent by end-2022, easing from current levels as base effects from last year’s price surge take effect.

The domestic producer price index climbed 5.17 percent month-on-month in July for an annual rise of 144.61 percent.

The government has said inflation will fall as a result of its economic programme, which prioritizes low rates to boost production and exports and aims to achieve a current account surplus.

Erdogan has said that he expects inflation to come down to “appropriate” levels by February-March next year, while the central bank raised its end-2022 forecast to 60.4 percent last Thursday from 42.8 percent previously.

The bank’s inflation report showed the estimated range of inflation reaching nearly 90 percent this autumn before easing.

Opposition lawmakers and economists have questioned the reliability of the TUIK figures, claims TUIK has dismissed. Polls show Turks believe inflation is far higher than official data.

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Categories
Business

Cost of Living crisis: WA wholesaler New West Foods warns of ‘perfect storm’ with food, pub prices set to rise

Cost of Living crisis: WA wholesaler New West Foods warns of 'perfect storm' with food, pub prices set to rise

WA’s biggest independent food distributor has warned consumers to expect further hikes at their favorite pubs and restaurants – and eventually supermarkets – as supply chain pressures and skyrocketing input costs continue to drive up prices.

The price of vegetable oil supplied by New West Foods to hundreds of eateries across WA has almost doubled since August 2020, with eggs up 75 per cent over the same two-year period.

Salmon has jumped 50 per cent while cheese and bacon are both up around 35 per cent.

Even the humble frozen chip – a staple of takeaway menus everywhere – has climbed 25 per cent.

The scale of price rises over the past two years.
Camera IconThe scale of price rises over the past two years. Credit: The West Australian

The majority of those price rises have come in the last 12 months as myriad factors combined to create what New West Foods managing director Damon Venoutsos said was the “perfect storm” for food costs.

Mr Venoutsos described distribution businesses like his own as the “canary in the coal mine” for price increases because – unlike supermarkets and fast-food chains – they did not enter into long-term agreements with suppliers.

“Most of the time we get 30 days’ notice from our suppliers that prices are going up whereas your big retailers (such as Coles and Woolworths) and quick service restaurants (such as KFC) can lock in their prices for anything up to six months ,” he said.

“Often we’re using the exact same supplier so while I don’t know when (the supermarkets) are going to catch up, it’s inevitable they will have to.”

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