price rises – Michmutters

Tag: price rises

Categories
Business

Choice survey reveals Aussies are under the pump trying to pay their bills

Choice survey reveals Aussies are under the pump trying to pay their bills

New research has revealed nine out of 10 Aussies say they are struggling to manage their household budgets amid the rising cost of living.

A survey by consumer group Choice found 90 per cent of more than 1000 participating households said their bills had increased since 2021 – with the biggest financial burdens health insurance and utilities.

Choice editor Marg Rafferty said almost all Aussie households were feeling the pressure of price rises, with the report highlighting how difficult it’s become to manage the household budget.

“Among the biggest financial burdens, the research found, was health insurance and utilities,” she said.

“Cost of living pressures continue to be a major issue for Australians.”

Almost three in five respondents reported concerns about their disposable income, with pulse data revealing 23 per cent of households are struggling to get by, which is up from 18 per cent in June last year.

Ms Rafferty offered advice to Australians struggling to keep up with their bills, saying “there’s a chance you could be getting a better deal elsewhere”.

“Our research shows you can save up to $935 a year on hospital cover by switching to a similar policy with a different provider.” she said.

“It always helps to spend some time comparing what’s on the market.”

According to the Australian Bureau of Statistics, household spending in June was up more than 10 per cent compared with the same time period last year.

But household bill hikes are not the only thing Aussies are spending their money on, with residents feeling the pinch of an additional 15 per cent increase on services and 5 per cent rise on goods.

The monthly figures, which were released on Tuesday, revealed both discretionary and non-discretionary spending increased following an inflation rate of 6.1 per cent.

Non-essential costs rose by 10.8 per cent, driven by spending in recreation and cultural activities, while essential spending rose by 9.8 per cent, due to the rising cost of transport.

The most significant area of ​​spending was on transport, up 22.7 per cent, driven by higher oil prices due to the ongoing war in Ukraine and the demand for air travel.

Spending at hospitality businesses like hotels, cafes and restaurants was up 17.1 per cent in what is viewed as a positive return to pre-pandemic levels.

There was also strong growth in spending on clothing and footwear – up 16.3 per cent, as well as a 15.5 per cent increase in recreation and culture.

Jacqui Vitas, from the Australia Bureau of Statistics, said June marked the 16th consecutive month of through-the-year increases in total household spending.

“This was off the back of consistent decreases in total household spending from March 2020 to February 2021, as responses to Covid-19 were experienced across the country,” she said.

“Spending categories most impacted from Covid-19 responses – transport, hotels, cafes and restaurants, and clothing and footwear – have now returned to pre-pandemic levels.”

.

Categories
Business

Inflation: Why you could soon be back earning what you did back in 2008

Inflation: Why you could soon be back earning what you did back in 2008

It’s the grim graph that suggests Australian workers face a horror “back the future” scenario on wages.

Real wages – workers’ income that has been adjusted to reflect the rising cost of living – are going backwards.

Perhaps, that’s no surprise to anyone who has tried to buy fresh fruit and vegetables at the supermarket lately amid rising prices and massive interest rate hikes.

But Dr Greg Jericho, the Center for Future Work’s Policy Director has some bad news.

It’s even worse than it sounds.

As households struggle with the rising cost of essentials, real disposable household income is set to fall for months to come sending workers back to what they were earning in real terms over a decade ago.

“The latest Reserve Bank Statement on Monetary Policy estimates that real wages will continue to fall until the end of next year, at which point they will be back to 2008 levels,” he said.

Dr Jericho describes the graph as “horrific”.

“In real terms, prices and wages since 2008 will have gone up by exactly the same amount. So there’s no improvement,” Dr Jericho said.

“Your wages might have gone up 20 per cent. But prices have gone up by 30 per cent.

“It’s horrible. Normally it goes up. Before the pandemic, it was rising, perhaps a bit slower than it was during the mining boom, for example, but it still keeps going up. It’s pretty drastic.”

For three years, the RBA predicts wages are going backwards.

The RBA now estimates that real wages will fall fourteen consecutive quarters from the Sept 2020 quarter through to the Dec 2023 quarter.

The situation won’t improve until 2024 according to the Reserve Bank’s latest monetary policy update released on Friday.

“It’s most pronounced for low income people because what we’re seeing with inflation at the moment is that the prices of what we call non-discretionary items or essential items are rising faster than sort of discretionary luxury items,” Dr Jericho said.

“So the prices of things that you can avoid paying like food, like energy, bills, rent are rising faster than the things you can decide not to buy, like a holiday.

The big drivers of inflation are the war in Ukraine and the supply chain disruptions caused by Covid.

“Higher prices, especially for food and fuel, are likely to impact low-income households in particular (which tend to spend a larger share of their income on these necessary items),” the RBA said.

“While household balance sheets are generally strong and many households should be able to absorb these price increases, others have limited savings buffers and may have to reduce spending elsewhere.

“For some of these more vulnerable households, the impact of price rises will be mitigated to some extent by the indexation of social assistance payments twice per year, though price rises will reduce recipients’ real incomes in the near term.”

But the RBA’s grim predictions also raises fresh questions about Labor’s pledge to address cost of living.

Labor’s election campaign was based around the slogan that “everything is going up except your wages.”

This data suggests that’s not going to improve for months to come.

.

Categories
Business

McDonald’s worker shot over cold fries has died

McDonald's worker shot over cold fries has died

A New York McDonald’s worker who was shot in the neck in a spat over cold fries has died, authorities announced on Friday.

Matthew Webb, 23, “succumbed to his injuries” after he was shot Monday outside the Bedford-Stuyvesant fast-food restaurant where he worked in Brooklyn, the NYPD said.

The attack “has been deemed a homicide,” the force said early Friday, stressing that “the investigation remains ongoing”, The NY Post reports.

Michael Morgan, 20, has already been charged with attempted murder and criminal possession of a loaded firearm for opening fire on Webb after his mother was served cold fries.

He is expected to face upgraded homicide charges, prosecutors told a court hearing Thursday, before Webb’s death was confirmed.

The incident unfolded when Morgan’s mother, Lisa Fulmore, complained to workers that her fries were cold and asked to speak to a manager on Monday evening.

When the workers began laughing at her, Fulmore was FaceTiming with Morgan, who came to the restaurant and got into a fight with Webb that spilled out onto the sidewalk. Morgan punched Webb in the face and when he got back up, he pulled out a gun and blasted him in the neck, prosecutors alleged.

His mum later told the police that her son told her “he gotta do what he gotta do.”

The suspect’s girlfriend, Camellia Dunlap, has also been charged with weapons possession for allegedly handing Morgan the gun. She was arraigned later on Wednesday and held on a US$50,000 cash bail, after prosecutors said she admitted to possessing the gun.

Morgan was also charged with an earlier murder after allegedly confessing during questioning about the McDonald’s shooting.

He allegedly killed Kevin Holloman in October 2021.

This article was originally published by The NY Post and was reproduced here with permission.

.

Categories
Business

Property: Cities where you can still snap up a bargain on housing in Australia revealed

Property: Cities where you can still snap up a bargain on housing in Australia revealed

Rising interest rates might be putting off some people from purchasing a property amid fears they cannot afford the mortgage stress.

But whether you are looking for a house to make your home, or an investment property, there are still some bargains to be found across Australia.

Real Estate Institute of Australia president Hayden Groves told NCA NewsWire markets like Sydney, spurred on by low interest rates and economic stimulus, had experienced rapid price gains of about 30 per cent in 2021, peaking earlier this year.

“Other east coast markets have performed similarly well and are now beginning to moderate as affordability constraints impact,” he said.

“In contrast, the markets of Perth and Darwin, since early 2020, have underperformed comparative to east coast cities.

“They are now enviable, more affordable and continue to grow thanks to migration-led demand, strong economies and tight housing supply.”

Mr Groves observed that in the hyper-inflated markets of Sydney and Hobart, prices were beginning to rationalize due to buyer uncertainty.

“Brisbane’s market remains buoyant thanks to migration pressures fueling demand, whereas Adelaide continues to perform well thanks to the flow-down effects from relocations from higher priced regions across Melbourne,” he said.

“Price rises have already reversed in Melbourne, Sydney and Hobart, while Perth and Adelaide remain strong off the back of more constrained growth.”

Mr Groves said Perth remained the most affordable capital in Australia.

“Average mortgage holders part with around 24 per cent of their wages to service their loans,” he said.

“Compared this to Sydney-siders who currently give up on average 46 per cent of their salary to meet their mortgage payments.

“Median house prices in Perth are about $550,000, less than half that of Sydney’s median prices and well below Hobart, Brisbane and Adelaide.”

Darwin and some major regional city areas in eastern Victoria, north Adelaide and northeast Tasmania also offered good value, Mr Groves added.

He noted interest rates remained low and were coming up from “emergency” levels.

“It is good news that Australian property markets head back to a more balanced environment, although as housing supply remains below underlying demand, property values ​​are likely to retain much of their gains experienced since early 2020,” he said.

.

Categories
Business

Rashays boss Rami Ykmour blames labor shortages for lettuce, beef price rises

Rashays boss Rami Ykmour blames labor shortages for lettuce, beef price rises

The owner of a popular Sydney restaurant chain has launched into a furious “rant” about skyrocketing costs, saying he is now paying $140 for a box of lettuce and can’t afford to pass it on to his customers.

But Rashays co-founder Rami Ykmour, who made headlines during Covid for clashing with police over masks and speaking out against banning unvaccinated diners, says labor shortages – not the floods – are to blame for rising prices.

“I am disgusted, I am really disappointed with what’s going on out there, guys,” the outspoken restaurateur said in a TikTok video.

“Listen to this. We are buying a box of lettuce for $140. How much are we going to pass on to our customers? How can we pass on that expense to our customer? Even the big fast food giants have stopped serving their magic burger because this is worth, what, seven, eight bucks? One head of lettuce?

Mr Ykmour said he “can’t believe this”.

“Guys, just to get lettuce out to our restaurant is costing us so much money there is no way customers will come back if we pass on that cost,” he said, adding beef prices had also “gone through the roof”.

“And you know what they tell us? Let’s blame the floods. You know what I call that? BS,” he said.

“Do you know what the real problem is? The real problem is we’re short labour. The real problem is no one is out there to pick cos lettuce, there’s no one out there to pick iceberg. There’s no one to work in our farms, there’s no one to work in our country abattoirs. That’s why the prices have gone up, but they’re covering up for it.”

He said it was “time the government stepped in and said listen, we’re going to open the gates, we’re going to let people here and we’re going to make it easy for small business to run their business, we’ re going to let people come into the country and work here”.

“Guys, this is getting ridiculous,” he said. “Now ask for something to be done.”

Speaking to news.com.au on Friday, Mr Ykmour insisted labor shortages were responsible for price increases in production.

“I can tell you that first-hand,” he said.

“I was on a lettuce farm in Melbourne last week, they had six people on and usually they have 40 people. [The floods] did contribute in the early days, but it’s got nothing to do with what’s happening today.”

Mr Ykmour said governments needed to once again incentivize people to come to Australia to work, with something similar to the “Ten Pound Poms” scheme after World War II.

“We’re at that level now,” he said.

He said he believed border closures over the past two years had “of course” caused labor shortages, but that the issue was much broader.

“I think people just don’t want to work,” he said. “Coming off the pandemic, people are struggling.”

Recruiters have previously warned Australia is grappling with a massive skills shortage as employers struggle to fill roles.

Graham Wynn from Superior People Recruitment told news.com.au in June that he had “never seen it this bad”.

“This is the worst and most difficult it’s been to find people,” he said, adding it was “across the board”.

“Salespeople, technicians, a bit of IT we’re struggling with as well, but even the more basic roles which don’t require any experience like receptionists, we’re even struggling to find those at the moment.”

Mr Ykmour agreed, saying his business was getting hit with a “double-whammy” as a result.

“It’s [affecting] the price of produce, and we’re getting hit with staff shortages, right from the top level all the way down to waiters,” he said.

“My head office employs 60 people and we’re struggling, it’s just permanent recruitment. What used to take four weeks to find you’re now looking at three months.”

I have argued lockdowns were partly to blame for the general malaise, along with Covid itself.

“I think we’ve trained people to stay at home with lockdowns and all the rest,” he said.

“We’ve told people, listen, it’s OK to stay at home. I reckon a lot of people in the community are mentally drained on the back of the pandemic — people are finding it hard to just survive at the moment.”

Prime Minister Anthony Albanese is coming under increased pressure from the states and the business lobby to ramp up immigration to address lingering skills shortages after two years of Covid border closures.

Last year, NSW government bureaucrats urged Premier Dominic Perrottet to push the federal government for an “explosive” post-WWII-style immigration surge that could bring in two million people over five years.

NSW Skills Minister Alister Henskens last month called on the Albanese government to implement a “significant acceleration” of the nation’s skilled migration program, Australian reported.

Australia’s annual inflation rate rose to 6.1 per cent in the June quarter, figures released last week show, the fastest pace since December 1990.

According to the Australian Bureau of Statistics, the most significant contributors to the 1.8 rise in consumer prices over the quarter were new dwelling purchases, automotive fuel and furniture.

Price rises were also seen across all food and non-food grocery products, “reflecting a range of price pressures including supply chain disruptions and increased transport and input costs”, the ABS said.

Fruit and vegetable prices were up 7.3 per cent compared with the same quarter last year, meat and seafood rose 6.3 per cent, bread and cereal products were also up 6.3 per cent, while dairy and related products increased by 5.2 per cent.

“Fruit and vegetables rose 5.8 per cent [in the June quarter] due to heavy rainfall and flooding in key production areas of NSW and Queensland disrupting domestic supply,” the ABS said.

“Covid – related supply chain disruptions and high transport and fertilizer costs also contributed to the rise. Bread and cereal products rose 3.1 per cent due to constrained global wheat supply.”

The ABS noted meals out and takeaway foods also rose 1.4 per cent “due to rising input costs and ongoing supply and labor shortages”.

“Dining vouchers offered by the NSW and Victorian governments and the Melbourne City Council partially offset the rise,” it said.

“These voucher schemes have the effect of reducing out-of-pocket costs for consumers. Excluding the impact of these voucher schemes, Meals out and takeaway foods rose 2.1 per cent.”

[email protected]

Read related topics:sydney

.

Categories
Business

Simple way to fix Australia’s east coast energy crisis

Simple way to fix Australia's east coast energy crisis

Slowly but surely, the story of the greatest rip-off in Aussie history is coming out. It’s not a great train robbery. Not a Sydney wealth management fraud. It is an investment boom that miraculously turned east Australian resources bounty into a pair of concrete boots for the broader economy.

This is the sorry tale of how foreign cartels stole Australian gas reserves and fed them to China while the local economy was starved of it.

It began during the GFC-period when advances in unconventional gas extraction (fracking, shale, coal seam etc) made huge reserves in Queensland viable for extraction. Three conglomerates of largely multinational firms built infrastructure systems across the east of the state to extract, pipe and freeze that gas for export.

They spent some $80 billion doing so, in a mad race that duplicated everything, over-invested in production and crashed the global gas price, forcing them to write off tens of billions on their investment.

Meanwhile, in poor little Australia, which actually owned the gas, the moment the export trains opened the price began to rise because there was not enough left over for locals.

The price rose from $4Gj relentlessly until we were paying $20Gj in 2017 – more for our own gas than our Asian customers.

Worse, because gas sets the marginal cost of electricity on the east coast, whenever its cost rises, power prices go mad as well, hugely multiplying the negative impacts on the economy.

The Turnbull government recognized the folly of this in 2017 and installed the Australian Domestic Gas Security Mechanism (ADGSM). That crashed the gas price back under $10Gj, though it remained much higher than it had been traditionally.

But that was not the end of it. Whenever there has been cold weather, or coal or other outages in the power market, or international shortages, the gas cartel has popped up again to squeeze local prices higher.

This serial debacle most recently came to a head with the war in Ukraine and Russian sanctions which have left the world short of gas and Australian prices have gone to as high as $65Gj, the market has been suspended and electricity prices have been driven up by 600 per cent to boot.

This is a $50 billion gouge by the energy cartels that are effectively war-profiteering at every Australian’s expense. Soon, these price rises will deliver an extra 6 per cent CPI inflation, ensuring the RBA has to drive interest rates higher than many households can bear.

And for what? The gas cartel will not invest anymore. There’ll be no jobs created. Governments will receive no tax dividend owing to broken laws and the massive writedowns on the projects.

Indeed, this episode will be recounted by economic historians as the worst case of the “resources curse” ever. (It’s sometimes called Dutch Disease after the Netherlands’ broader economy suffered in the ’70s with the development of North Sea oil resources that lifted its currency and falling competitiveness hollowed out the industry.)

If Dutch Disease is a national cold, then Australian Disease is like an inoperable brain tumour. It has allowed miners to steal the resource, pay no tax, force scarcity pricing on the extractive nation, and raise the currency. All of which have already decimated industry, hobbled national income, and will soon begin to deflate household wealth as well.

how to fix it

The new Labor Government has been forced to confront this reality to some extent. Untenable energy prices have triggered a review of the Turnbull domestic reservation mechanism. This is all to the good, but what should it look like?

First, the reformed ADGSM must include a price trigger. As it stands, it is a volume measure that is too unwieldy to be effective. The ADGSM should automatically divert gas from export the moment the price goes over $7Gj. This is plenty high enough for the gas cartel to make money out of it. The reserves are quite cheap and since they’ve written off so much investment, the gas has become even cheaper on a cash basis.

The new ADGSM should apply to all three conglomerates. Although it is the Santos-led GLNG that has come to be most short of gas and openly lied about it, all three joint ventures knew what they were doing when they overinvested to leave Australia short of gas. Besides, as Bass Strait gas bleeds out, the shortage will only get worse and the future will require as much as 15 per cent of the gas currently exported to remain at home. That’s a burden best shared by all three projects.

A second option is to use export levies. If we set a baseline for profits at pre-Ukraine war prices around $7Gj, then levy the gas cartel for every export dollar above that price, then the local price of gas would collapse and Australians collect the war windfall instead of firms that have no right to it.

Third, we could install a super-profits tax on the cartel and recycle that revenue as energy subsidies for everybody else. That is a pretty clunky solution but it delivers the same end.

With any and all of these solutions, the cartel will scream “sovereign risk”. But so what? It was its mistakes that created this untenable situation. Australians should not have to pay for them.

Moreover, export gas contracts are renegotiated all the time. Just a few weeks ago, one member of the gas cartel, Shell, declared force majeur (that is undelivered but contracted gas) over something as trivial as a maritime labor dispute.

The larger truth is that the cartel is a risk to the sovereign and everyone within it.

Read related topics:Cost Of Living

.

Categories
Business

Cost of living: Inflation bites as vegetable and fruit prices rise, pork drops

Cost of living: Inflation bites as vegetable and fruit prices rise, pork drops

There’s a place that gives me the shivers: And not just because it’s cold. The fresh section of the supermarket has become terrifying.

I’m not frightened of the vegetables themselves. What’s different is the numbers on the price tags. They suddenly make vegetables look like luxury goods.

The latest consumer price inflation figures are out and they tell a shocking story.

As the next chart shows, the price of vegetables has gone supernova. It’s hardly the only product to have shot up. Your breakfast cereal and the sandwich in your lunch box are also much more expensive than before. Only one product category fell in price in the most recent data: pork.

The price of vegetables went up a lot between March and June this year because in winter, we get our veg from Queensland, and the state got flooded in March. Fields that would usually be full of happy young lettuces were instead knee-deep in filthy floodwater.

The basic law of economics says when things are in short supply, the market starts raising prices. Only buyers who really want something – and who can afford it – are left buying. The rest of us stop buying. This is what markets do – change prices to make sure demand equals supply. Sometimes that means raising prices a lot to scare off most buyers.

I was definitely put off buying my favorite fresh vegetables by high prices. I bought frozen veg a few times, and even bought brussels sprouts instead of broccoli at one point – talk about desperate times!

The price of fruit

Fruit was up by a lot in the three month period too. It rose 3.7 per cent, which is significant. Berry crops got hit by bad weather too. But fruit inflation would have been a lot higher if it wasn’t for avocados. Those guys have their seed on the inside, so they count as fruit, and they have tumbled in price. Who among us hasn’t shoveled in a lot of guacamole in recent times?

Avocado farmers seem to have gone on a planting spree back when jokes about smashed avo were at their peak. It takes five years or so for an avocado tree to grow enough to make fruit, and now the farmers are pulling in massive crops. Jokes about smashed avocado are over in 2022 however, and in a grim irony, it’s avocado prices that are now toast.

“The additional [avocado] trees started producing fruit around the middle of last year, leading to oversupply and sharp price falls,” said a spokesperson from the ABS when I asked about why fruit prices were not as high as vegetables.

She explained avocados are often eaten in cafes and restaurants, so when we eat at home more the avocado industry takes an extra hit.

“Reduced demand from the food service industry due to lockdowns also reduced demand for avocados during the later parts of last year,” she said.

That adds up to cheap avocados. I bought a bagful yesterday for well under a dollar each.

Pork on your fork

The outlier in the graph above is pork. Why is it cheaper, I asked? The answer seems to be cheap imports. I went digging for data and found the Australian pork industry published loads of information on pork imports. They say that by May 2022 we had brought in a lot more pork – 22,000 tonnes instead of 13,000 tonnes by May 2021. Our extra bacon is especially coming from Denmark and the Netherlands.

That extra supply has helped eased prices after a period early in 2022 where pork prices got a lot higher.

But why are the Europeans suddenly sending us so much pork? The answer is a fascinating one – pigs don’t graze grass like cows – you have to feed them (not unlike people!) and as the next chart shows, the cost of feed as a percentage of the eventual price of the pig got very high in early 2022.

Pig farmers have the choice to either make money by turning pigs into bacon, or spend money keeping on feeding them. They are choosing the former. So ironically, high food prices in Europe may be helping keep down the price of Australian pork.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.

Read related topics:Woolworth’s

.