Screwing the average citizen..

The control of economic inflation & social equality…
by Scott Wilkie
Here in Oz, official (reserve bank) interest rates are on the rise & we now have the highest rate in 10 years, with no sign of abatement.
The rate rises are in response to growing ‘inflation’ of the $Au in the market place, and a therefore perceived overheating of the economy.
Now, the approach to restoring low inflation levels appears to be this. Reserve Bank sees prices & wages ‘on the rise’. In an effort to stop this spiral, it introduces a ‘sudden jump’ in the cost of purchasing through the only easy & traditional means it has – the official interest rate, the cost of its own money. This allows no time for ‘absorption’ by the economy & so some companies/people stop spending, forcing a retraction in the marketplace. When this takes hold, the RB quickly follows this with an interest rate drop, correcting the economy.
The above may be an oversimplification, but I’d like to comment..
Official Interest rate changes (through the banks) affect the average person, (through mortgage & credit interest rates), the entrepreneur, the service industry & any speculative enterprise. The people we should value (& leave unhurt) most, in my opinion.
Large corporations & banks in particular are left to pass on any cost imposed. For them, it is merely a matter of colluding and balancing the books, increasingly in their favour through the rate rises (lending & investment differential) so that the profit margin is increased, appeasing the shareholder.
I say fuck the shareholder (apologies) at this point, but only because the Banks & major financial businesses aren’t forced to take on some of the costs of inflation. I’m sorry but the value of shares should drop appropriately at this point, as they have recently. Things should be seen in proportion to human need. The partial loss of the value of your ‘shares & investments’ should not be protected in favour of those having their primary household residences repossessed, for example.
And why does the Fed Govt insist on adding to inflation by overtaxing basic ‘working class’ commodities such as beer? The retail tax rate beer & cigarettes in Australia is linked to the CPI (consumer price index) and such commodities are subject to an automatic, twice yearly tax increase. And its no small percentage, either. While we’re here would could also take a look at the virtual monopolisation of the ‘supermarket’ industry by Woolworths here in NSW. Woolworths have a terrible reputation for screwing their suppliers for every last cent and not passing on these cost reductions to the consumer..
The ultimate solution to all this is ‘detailed’ price control, but in this capitalist economy, post Bob Hawke’s floating of the $Au & the new world of global economics, this is certainly unpopular with the big end of town. Control of wages & the labour market are the ‘traditional’ method of cutting the cash flow
If this Federal Australian Labor Government truly wishes to serve its constituents, it should increase costs on ‘luxury’ items (through tax) on a sliding scale into the ‘necessities’. To me with this logic, we maintain the aims of the roots of democracy, & go a long way toward satisfying the concepts of equality and ultimately basic Human rights. We intend to not financially ‘nobble’ the people who are least capable of handling it.
All of this can be handled through a sliding ‘GST’ after careful examination of the flow-on impacts generally, especially at the ‘housing’ level (housing is a ‘basic neccessity’), the aim here to keep the effects of inflation (& effects of ‘mass’ correction) minimised where it matters, for those who can ill afford it..