I don't think this article needs to be complicated, so: You were right. Our economy is screwing us, and companies are lying to us about it.
Three years ago, major players in the Australian economy started to raise their prices. Power and fuel first, and then damn near everything else followed. They said it was about the "supply chain".
Collectively, everyone I know said "that doesn't seem reasonable... but this whole 'globalised supply chain' thing is complicated, so maybe this is necessary".
Guess what? Your first impressions were correct. You were right. It wasn't reasonable, and it hasn't become any more reasonable in the three years since then.
How do I know that? Because even the nastier half of the Lib-Nat coalition, the Nationals, are saying price-gouging from captive markets is bearing bad fruit.
Maybe the right-wing's embrace of "oh shit, duopolies are bad" can be dismissed as desperate populism. But that should tell us something else, shouldn't it?
That means lots of other people, even those who vote Lib/Nat, think (correctly) that these price increases were and are bullshit. Budgets are strained beyond reason. Thriftiness is no longer enough to stay afloat.
People have felt this so acutely that supermarket theft has increased by 20%. There has also been a rise in organised theft of high-margin, high-importance products, like meat and baby formula.
The eagle-eyed and keen-minded among you will notice that I am not condemning this five-fingered trend. Call it a rational market response, if you will. Nobody has yet figured out how to shoplift a house, have they? Hmm.
Now, the broad, economy-wide problem of gouging really kicked off in 2022, when two things happened: Russia disrupted international gas markets when it invaded Ukraine, and Australia's coal-fired power plants experienced a historic outage level of 24% across the entire year.
In short, this meant that international prices for Liquid Natural Gas went up. So did Australian domestic demand (and thus prices).
These valid short-term concerns were used as a cover for long-term price hikes. Remember: Australia is a net exporter of LNG.
Australian domestic producers of LNG cried "market disruption" anyway, and used this opportunity to try and raise their prices for Australian domestic purchasers - our power producers.
Power producers used this whole situation to raise their prices even more, of course.
When they couldn't go further (because the Australian Energy Market Operator (AEMO) put a price cap on the market), producers just flat-out refused to sell power anyway, even though AEMO was legally bound to compensate them for any discrepancy between the low market cap and the 'potential' higher prices they wanted to sell at.
Ensured profits weren't enough - producers were indignant at bearing any market regulation.
These issues have not been short-term. Despite international and domestic LNG prices stabilising, and coal-fired power too? Power prices for the consumer didn't go down or even flatten out - they kept going up.
To the tune of a hot little two billion in energy company profits per year, or thereabouts.
Partly due to recent gouging, and partly due to a small, monopolised, under-regulated power market? The average Australian power producer profits 67% above what would be considered "normal".
You've noticed this, and you were right to feel screwed. No part of you should feel unsure or entitled about thinking your bills should be cheaper. This is not normal, expected, unavoidable, necessary, good, or anything except naked, unchecked corporate greed.
While we're talking on greed, do you remember Quantas? They cried poor during COVID lockdowns, cutting jobs and fretting hard about their future. Big headlines about that one.
Turns out, lots of those layoffs were illegal outsourcing maneuvers used to cut costs. More than a thousand staff who were sacked were also later faced with taking their jobs back for lower pay.
All this, of course, while Australia's home-grown mom-and-pop airline swung immediately back into profit and has kept hitting record-high margins. That's how it goes - high underlying prices? Cost to fly goes up, profits go up. Low underlying prices? Cost to fly stays high, and profits go up.
To quote from a writing team that (as a pleasant surprise) includes someone I went to school alongside:
Banks are the worst offenders, surprising precisely none of us. All of the banks, big four and otherwise, posted depressingly inflated profits. Billions upon billions.
All of this drives the rest of the market, of course. Record profits and bolder banks are never a sign of cheap housing on the horizon, for one.
To be clear, wages aren't skyrocketing to match price increases - despite repeated blaming of "labour costs" for price gouges across the economy.
I say all of this to hammer home that you were right. You were 100% correct to look at the economy and say "this isn't right, is it?". It's not reasonable, it's not justified.
I think that's important. There are things we can do, actions we can take, but they rely on one thing: being sure of ourselves. So: your skepticism and distrust of the increasing hostility of the economy is correct.
The good news is that Labour is acting - sort of. They are pushing inquiries, formal legislative interventions. It's half-assed, and it's taking time, but it's in motion.
It's our job, I suppose, to make sure it doesn't slip by the wayside. Be insistent about real, legislative, immediate-term changes, wherever you can. Bother your crusty family members about it - statistically, they agree with you. Vote on it. Bother your representatives about it - local, state, federal.
Above all else? Be selfish, on behalf of your community.
Three years ago, major players in the Australian economy started to raise their prices. Power and fuel first, and then damn near everything else followed. They said it was about the "supply chain".
Collectively, everyone I know said "that doesn't seem reasonable... but this whole 'globalised supply chain' thing is complicated, so maybe this is necessary".
Guess what? Your first impressions were correct. You were right. It wasn't reasonable, and it hasn't become any more reasonable in the three years since then.
How do I know that? Because even the nastier half of the Lib-Nat coalition, the Nationals, are saying price-gouging from captive markets is bearing bad fruit.
“The cost-of-living crisis is now, not next year and the supermarkets have form on this, having gouged consumers during COVID. Actions… can be undertaken immediately, without having to wait for the completion of the [parliamentary] inquiry.”
-David Littleproud, Nationals leader
Maybe the right-wing's embrace of "oh shit, duopolies are bad" can be dismissed as desperate populism. But that should tell us something else, shouldn't it?
That means lots of other people, even those who vote Lib/Nat, think (correctly) that these price increases were and are bullshit. Budgets are strained beyond reason. Thriftiness is no longer enough to stay afloat.
People have felt this so acutely that supermarket theft has increased by 20%. There has also been a rise in organised theft of high-margin, high-importance products, like meat and baby formula.
“My research on understanding deviant consumer behaviour suggests if you don’t perceive the retailer to be a victim, then you can justify your behaviour.”
-Dr Paula Dootson, associate professor of Business at the Queensland University of Technology
The eagle-eyed and keen-minded among you will notice that I am not condemning this five-fingered trend. Call it a rational market response, if you will. Nobody has yet figured out how to shoplift a house, have they? Hmm.
Now, the broad, economy-wide problem of gouging really kicked off in 2022, when two things happened: Russia disrupted international gas markets when it invaded Ukraine, and Australia's coal-fired power plants experienced a historic outage level of 24% across the entire year.
In short, this meant that international prices for Liquid Natural Gas went up. So did Australian domestic demand (and thus prices).
These valid short-term concerns were used as a cover for long-term price hikes. Remember: Australia is a net exporter of LNG.
Australian domestic producers of LNG cried "market disruption" anyway, and used this opportunity to try and raise their prices for Australian domestic purchasers - our power producers.
Power producers used this whole situation to raise their prices even more, of course.
When they couldn't go further (because the Australian Energy Market Operator (AEMO) put a price cap on the market), producers just flat-out refused to sell power anyway, even though AEMO was legally bound to compensate them for any discrepancy between the low market cap and the 'potential' higher prices they wanted to sell at.
Ensured profits weren't enough - producers were indignant at bearing any market regulation.
""There was a bit of gaming going on of the system, which is why AEMO used its tools at its disposal to intervene, so we do have these short-term issues."
-Anthony Albanese, Labour leader and Prime Minister
These issues have not been short-term. Despite international and domestic LNG prices stabilising, and coal-fired power too? Power prices for the consumer didn't go down or even flatten out - they kept going up.
To the tune of a hot little two billion in energy company profits per year, or thereabouts.
Partly due to recent gouging, and partly due to a small, monopolised, under-regulated power market? The average Australian power producer profits 67% above what would be considered "normal".
You've noticed this, and you were right to feel screwed. No part of you should feel unsure or entitled about thinking your bills should be cheaper. This is not normal, expected, unavoidable, necessary, good, or anything except naked, unchecked corporate greed.
While we're talking on greed, do you remember Quantas? They cried poor during COVID lockdowns, cutting jobs and fretting hard about their future. Big headlines about that one.
Turns out, lots of those layoffs were illegal outsourcing maneuvers used to cut costs. More than a thousand staff who were sacked were also later faced with taking their jobs back for lower pay.
All this, of course, while Australia's home-grown mom-and-pop airline swung immediately back into profit and has kept hitting record-high margins. That's how it goes - high underlying prices? Cost to fly goes up, profits go up. Low underlying prices? Cost to fly stays high, and profits go up.
To quote from a writing team that (as a pleasant surprise) includes someone I went to school alongside:
"The return-on-invested-capital measurement [for Quantas], which tracks how well a company generates profits, increased to 103.6%, an almost mythical figure. This compares with a return of less than 20% before the pandemic."
-Jonathan Barrett and Elias Visontay, writing for The Guardian.
Banks are the worst offenders, surprising precisely none of us. All of the banks, big four and otherwise, posted depressingly inflated profits. Billions upon billions.
All of this drives the rest of the market, of course. Record profits and bolder banks are never a sign of cheap housing on the horizon, for one.
To be clear, wages aren't skyrocketing to match price increases - despite repeated blaming of "labour costs" for price gouges across the economy.
I say all of this to hammer home that you were right. You were 100% correct to look at the economy and say "this isn't right, is it?". It's not reasonable, it's not justified.
I think that's important. There are things we can do, actions we can take, but they rely on one thing: being sure of ourselves. So: your skepticism and distrust of the increasing hostility of the economy is correct.
The good news is that Labour is acting - sort of. They are pushing inquiries, formal legislative interventions. It's half-assed, and it's taking time, but it's in motion.
It's our job, I suppose, to make sure it doesn't slip by the wayside. Be insistent about real, legislative, immediate-term changes, wherever you can. Bother your crusty family members about it - statistically, they agree with you. Vote on it. Bother your representatives about it - local, state, federal.
Above all else? Be selfish, on behalf of your community.