Home > Latest News > Albanese Government Blamed For Latest Inflation Problem As 17,000 Businesses Placed Into Administration

Albanese Government Blamed For Latest Inflation Problem As 17,000 Businesses Placed Into Administration

In bad news for consumers and retailers the monthly consumer price index indicator has risen 3.6 per cent in annual terms in April with speculation emerging that interest rates could rise not fall as initially tipped.

Economist Terry Mcrann claimed that Australians who are doing it tough with the cost of living and home loan repayments, can kiss goodbye to an immediate interest rate cut.

The best they can hope for – after the latest official inflation numbers Wednesday from the ABS – are that the Reserve Bank does not lift its official interest rate, and so, bank home loan rates, at its next meeting in mid-June.

At this stage markets expect the RBA to keep the cash rate on hold at 4.35 per cent until May 2025.

The next cut is tipped to be next year with a cut of $0.25%.

For retailers the problem is profitability with the need to discount in an effort to get consumers to spend taking a toll on margins.

Several business groups are blaming the Albanese Government and Treasurer Jim Chalmers for the increases due to the amount of money being pumped into the economy for all the wrong reason.

Shadow Treasurer Angus Taylor said Australians deserve better than a weak Labor government that fails to provide economic leadership he claims that today’s monthly Consumer Price Index (CPI) data shows Labor’s cost of living crisis is hurting hardworking Australians and that retailers will continue to suffer while the Albanese Government is running the economy that has seen 17,000 businesses fold after becoming insolvent since the Albanese government came to power and due to rising operational costs.

Core inflation – the RBA’s preferred measure – rose to 4.1%, well above the RBA’s target.

Domestic inflation has risen 5%, while imported inflation has risen by 1%.

Several business bodies as well as Taylor, claim that Australians continue to face one of the highest and most persistent rates of inflation of any advanced economy with Labor State Governments and the Federal Government in bed with the Union movement who are trying to “milk businesses of profits” resulting in a looming employment crisis according to one major retailer.

Taylor claims that with Labor’s big spending, big government third budget, Australian households and businesses face higher prices, higher interest rates and higher taxes for longer.

Under the nearly two years of Labor’s homegrown inflation, the price of everyday essentials has gone up by:

  • Food 11%
  • Housing 14%
  • Rents 13%
  • Electricity 20%
  • Gas 25%
  • Health 11%
  • Education 11%
  • Financial and insurance 15%

Research shows that consumer confidence and retail trade data all show that households are struggling to keep their heads above water.

Taylor said “This is the consequence of the Albanese Labor Government’s confused economic priorities. Under Labor, we’ve seen a collapse in Australians’ standard of living and productivity. Australian households are in a recession, but instead of reining in spending and getting government out of the way, the Albanese Labor Government has been doing the opposite”.

This claim observers are leading to pain for retailers and their suppliers with brands such as LG Electronics reporting a 21% slump in revenues up to December 2023.

ChannelNews understands that in the first quarter of 2024 LG revenues are down on the same period in 2023.

While annual headline inflation has changed little for months, economists are punting on a sharp fall when federal and state government electricity rebates come into effect from July.

Commonwealth Bank economist Stephen Wu estimates the various measures, which include a $300 subsidy from the federal government and a $1000 rebate for Queenslanders, will cause electricity prices to fall 20 per cent in the September quarter, subtracting 0.5 percentage points from CPI.

While that could be enough to temporarily send headline inflation below 3 per cent, underlying inflation would still remain well above the RBA’s 2 to 3 per cent band, negating the prospect of a near-term rate cut.

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