The market does not work for consumers during times of crisis, as we have seen in the current high inflationary period. Is it time for price controls? If we want to protect the most economically vulnerable within our communities this is the way to go. Price controls on energy, rents, and essential food make sense in the current clime. If governments cannot provide handouts due to their inflationary effect, then, setting prices is the only other viable means to halt the assault on the working poor and all those struggling at the moment.
Australia Needs Price Controls
The example of the war in Ukraine jacking up energy prices in Australia, despite the fact that we produce our own gas, is the perfect example. The fact that there are just 4 companies controlling this market in Australia means we are vulnerable to oligopolies manipulating the market for gas in Australia. The federal government has taken steps to set price limits on the wholesale domestic gas market. Prices for energy are still going up but the market has stabilised after crazy increases crippling manufacturing and businesses in Australia. Santos declared a half yearly profit increase of 230% – making billions of dollars on the back of markets shooting gas prices sky high. Ampol declared a 30% increase on profits over the last 6 months.
Rents In Australia Must Be Price Controlled
Rents in Australia have reached record new highs due to a shortage of rental stocks across the nation. However, the rental market is pushing prices way beyond the affordability factor for many Australians. Price controls in the domestic rental market are essential for the lives of ordinary Australians to function. How can a government preside over an economy which makes a roof over your head economically unaffordable and think it is doing a good job of managing the economy? 10 consecutive increases of interest rates by the RBA is fanning the price gouging tendencies of landlords and real estate agents in Australia. Price controls on rents should be a permanent safety measure in our domestic economy. Investors in rental housing are seeing the best returns ever in the history of Australia.
Governments have neglected social housing over the last 30 years and left this to the market. The market has failed poorer Australians by not providing enough affordable housing. This crisis is a direct result of governments putting their trust in the market. The neoliberalism trend infecting governments across the globe and at all levels of government in Australia has left renters high and dry in 2022/23. This crisis has been coming for a long while fed by neglect and indifference to the needs of vulnerable Australians. Price control measures on rents must become a structural feature of our domestic rental market. Governments and property developers must build more social housing as an urgent priority. More Australians cannot afford to enter the property market every year and we are now seeing the lowest rate in years. This means we need more rental stock and this demand will continue to grow.
Floods in Australia and the pandemic has seen greater economic pressures on the fruit and vegetable growing sector. Prices have increased in leaps and bounds in reaction to these factors. Supermarkets have increased their profits on the back of these facts. Woolworths declared a half yearly profit increases of 25%. Coles up by 11%. Food, more generally, is more expensive for consumers across the board. Companies are increasing prices at a much greater rate than their increased costs of production can justify. Record profits are being declared. Price controls on essential foodstuffs are required to assist Australians during the current high inflationary period.
Qantas declares a $1.6 billion half yearly profit on the back of high ticket prices and massive staff layoffs.
The Commonwealth Bank of Australia records a record half yearly profit of $5.1 billion.
The RBA supports greater bank profits at the expense of ordinary Australians. Philip Lowe is largely indifferent to the suffering experienced by the working poor. He would rather see companies declare record profits, profiteering during high inflationary times, than do anything structurally about the economy. The poor are low hanging fruit for bankers and economists.
Interestingly, the Murdoch press, The Australian newspaper and its sister publications always come out with a virulent defence of the free market’s right to set market prices. News Corp is part of an oligopoly in the media sector in Australia, which manipulates the market via its influence. Consumers in capital cities in Australia do not have a choice regarding which local newspaper to buy, as News Corp controls the market. This control extends into radio stations and TV networks, with Nine Fairfax and News Corp largely controlling these sectors. Consumers do not hear a diversity of voices, unfortunately, they hear one loud voice instead.
Australia needs price controls on rents, essential foodstuffs, and energy for domestic consumers.
Robert Sudha Hamilton
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