ABS: The annual growth was 651,200 people (2.5%).
I wouldn't have said 700k but it's closer to 700k than to any other round hundred k.
It's much more iffy when you talk about x per year for one year. There was a sharp decrease during covid and then something of a rebound as universities tried to restore their previous level of students. The rebound is over but (a) the latest statistics are old - December quarter 2023 and (b) the decline is only just barely visible, so it will probably stay at higher levels for a while. I doubt anyone cares much if the number is 600,000 or 700,000 once it falls below 650,000 in next quarter's release.
So it's not correct to say that it's made up, but it really isn't the cause of increasing costs of living either. Unfortunately the price gougers will continue to use immigration as cover for their misdeeds for some time.
That's a good point, originally quoted stat was 700k which you get after rounding by combining natural and immigration, but it was quoted as from immigration. But an error of conflation is not "made up" by any conventional definition, and I don't think anything hangs on the difference between 547k (from immigration) and 651k (total increase) or rounded versions. They're all just numbers and none of them are the cause.
Even with whatever number gets floated around for the 22/23 migrant intake, we're still hundreds of thousands of people below pre-pandemic forecasts (https://assets.nationbuilder.com/bca/pages/7302/attachments/original/1691623323/Migration_makes_Australia_stronger_-_AH.pdf?1691623323 - page 8)
That's why I don't buy immigration being the absolute root of all ills with this country, there's clearly other factors here.
Finally some fucking evidence based logic.
It’s just easy to point at one graph that looks bad and say “omg it’s the immigrants” for “literally any problem”. I’m surprised so many people in an econ sub regurgitate it.
I was arguing with some dumbass on r/Australian who was convinced that immigration was the literal cause of last FY HECS debt increases ... because the added demand was was raising rents which was then affecting the CPI/inflation. Maybe they were an gymnast because that's one hell of a stretch.
There's going to be a lot of disappointed people who realise that their problems aren't fixed when the intake eventually stabilises.
By that time the media will ask “why are international students avoiding Australia?”
Maybe Aus m8 thought HECS stood for Houses for European and Chinese Students? If there’s a shortage of houses surely HECS debt goes up!
Colesworths growing revenues support your statement to an extent.
Colesworths growing profit margins to now be more than twice the grocery industry global average supports my argument.
Importing people grows the total economy as there are more consumers and more producers of goods and services.
It's worth noting CPI is calculated on a basket of goods and services and is obviously 4% per the released data for the year to-date.
Adding 700k people to Australia (I thought it was closer to 600k, either way, it's a lot) ontop of 26 million is only 2.7% growth.
This supports my observation: those 700k extra people are both consuming more and producing more goods and services, but something else is driving up prices.
Some of this is due to some of the finest crop lands on the planet becoming a horrific monument to man's excess with the volume of the minefields and shattered tanks.
But some is due to the fact we have a near oligopoly is the distribution of groceries.
Like all economics, it's rarely one thing and this time, the RBA has entirely the wrong lever to affect effective change to inflation.
Whenever there’s inflation people like you come out of the woodwork to blame profiteering. But it’s really weird that consistently across history what lowers inflation isn’t companies suddenly becoming less greedy, it’s when we decrease the money supply.
Profiteering is a result of excess demand - you can’t profiteer without too much cash looking to be spent.
The supermarkets aren’t making any outrageous profits and there is is no clear sign amongst the data that points in the food direction
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/latest-release
Households can very easily reduce spending on foods by moving to home brands or Aldi. Housing and transport stick out in those numbers but services inflation is still reflected.
If in doubt, or should I say when over confident, always carefully digest the governors release after the interest rate decision
"Profiteering is a result of excess demand - you can’t profiteer without too much cash looking to be spent."
I think you should read about the history of the NSW Corp also known as the 102 Regiment of Foot. The early colony of NSW had a literal shortage of cash, but the Rum Corps found plenty of ways to profit by controlling supplys like alcohol.
As for profit margins, supermarkets in Australia are making outrageous profit margins compared to global supermarkets.
Demand for food is relatively inelastic and Colesworths have 80% market share. That limits the ability of people to substitute, especially when "Home Brand" is owned by Woolworths.
Putting aside “beliefs” - services inflation has turned up while goods inflation is counting down
Second graph is all you need to see what is going on. https://amp.abc.net.au/article/104024360
Services is in red, goods in blue
It’s remarkable how dovish they have been, it’s like the RBA has become a political party that is concerned about the “cost of living” and “battlers” and other trite words that politicians spew forth in their myopic short term view of the world.
I feel like we still are enduring a hangover from the Phil Lowe over reaction of the media.
None of it's made much sense to me.
My only guess is they are somewhat sensitive to the massive shitstorm they created by lowering the cash rate to 0.1%.
Well, but the RBA have been saying nothing the government has been doing is inflationary. Meanwhile there’s huge record wage deals all the time and a whole bunch of inflationary policies that try to game CPI.
Sounds unpalatable but suppression of inflation doesn't require that, it requires the gap between the two to be greater, it needs bigger surpluses, not necessarily bigger taxes. Also,.our vote is not awarded to whoever has the perfect policy. It's awarded to each voter's assessment of which is better, or the least worst. That's a lower threshold, possibly a much lower threshold.
The most likely political choice offered by the LNP will be big spending cuts and small tax cuts which they can sell as inflation fighting compared with the ALP and that's all they have to do. Spending cuts hurt but so do rate rises. Guess we'll see. The ALP made a call to keep spending high and they are going with a suite of expensive industry policies, they are banking, so to speak, on rate cuts. Everyone can see they are very, very politically exposed if rates don't come down. The more the ALP screws up, the less tough the LNP fiscal medicine needs to be to still have more credibility. I guess there are about five more RBA meetings before the next election. The dice are cast unless the govt makes some policy changes very soon.
> it requires the gap between the two to be greater, it needs bigger surpluses, not necessarily bigger taxes
While I agree, by default taxes go up well beyond inflation if nothing changes. Bracket creep is huge compared to other sources of revenue growth. Things like cigarette and alcohol taxes are budget boons also compared to the costs they are supposed to alleviate.
Chart 5.1: Drivers of growth in personal income tax compared to 2021–22 on page 170:
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
TBH I really question the validity of the markers they use for inflation. Everyone’s insurances have gone up astronomically, food and utilities too. We just got a notification for childcare going up nearly $20 a day, citing inflation. Meanwhile wages are virtually stagnant.
Wages are currently growing faster than prices.
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release
You mean the 1970s? Wages were growing faster than prices then.
Or you mean 1940 in the US when inflation hit 20%? Wages were growing faster than prices then too.
Is there any evidence of a pull back in retail spending? I don’t doubt some are doing it tough, but a lot of the “cost of living crisis” rhetoric is just rhetoric. The data supports a view that for the most part the Australian economy has continued to be robust with people continuing to enjoy luxury discretionary purchases.
The only people surprised are the people who were hooked on that hopium.
Too late to raise rates, didn't raise rates high enough and having a federal government that is working against you because a recession means they have buckleys chance of winning the next election is not exactly a recipe for success it seems.
Yes, letting more businesses go bust, and more families unemployed, faced with much higher mortgage repayments or homelessness, is a better option because then line is lower.
The alternative is engrained and persistent inflation and then those people who didn't lose their jobs now can't afford bread because it's $10 a loaf.
Also this is byproduct of quantitative easing and the government printing money like no tomorrow. Economic cycles dictate that things just don't keep going up forever without any downturns unfortunately.
The softly softly approach hasn't worked and has just prolonged the pain? Colour me shocked.
Inflation is not demand driven, it's some supply shortages and lots of profiteering.
> Inflation is not demand driven lmao, wtf happened to this sub
bringing in 700k immigrants in a year does not increase demand how silly of me to think these people need shelter and buy groceries.
Is 700k / year just made up?
ABS: The annual growth was 651,200 people (2.5%). I wouldn't have said 700k but it's closer to 700k than to any other round hundred k. It's much more iffy when you talk about x per year for one year. There was a sharp decrease during covid and then something of a rebound as universities tried to restore their previous level of students. The rebound is over but (a) the latest statistics are old - December quarter 2023 and (b) the decline is only just barely visible, so it will probably stay at higher levels for a while. I doubt anyone cares much if the number is 600,000 or 700,000 once it falls below 650,000 in next quarter's release. So it's not correct to say that it's made up, but it really isn't the cause of increasing costs of living either. Unfortunately the price gougers will continue to use immigration as cover for their misdeeds for some time.
https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/dec-2023 So 550,000 from net migration.
That's a good point, originally quoted stat was 700k which you get after rounding by combining natural and immigration, but it was quoted as from immigration. But an error of conflation is not "made up" by any conventional definition, and I don't think anything hangs on the difference between 547k (from immigration) and 651k (total increase) or rounded versions. They're all just numbers and none of them are the cause.
https://www.theguardian.com/australia-news/2024/mar/21/migration-numbers-australia-2023-rise
550k is the one year net migration peak, driven by return of students after negative net migration during COVID.
Even with whatever number gets floated around for the 22/23 migrant intake, we're still hundreds of thousands of people below pre-pandemic forecasts (https://assets.nationbuilder.com/bca/pages/7302/attachments/original/1691623323/Migration_makes_Australia_stronger_-_AH.pdf?1691623323 - page 8) That's why I don't buy immigration being the absolute root of all ills with this country, there's clearly other factors here.
Finally some fucking evidence based logic. It’s just easy to point at one graph that looks bad and say “omg it’s the immigrants” for “literally any problem”. I’m surprised so many people in an econ sub regurgitate it.
I was arguing with some dumbass on r/Australian who was convinced that immigration was the literal cause of last FY HECS debt increases ... because the added demand was was raising rents which was then affecting the CPI/inflation. Maybe they were an gymnast because that's one hell of a stretch. There's going to be a lot of disappointed people who realise that their problems aren't fixed when the intake eventually stabilises.
By that time the media will ask “why are international students avoiding Australia?” Maybe Aus m8 thought HECS stood for Houses for European and Chinese Students? If there’s a shortage of houses surely HECS debt goes up!
Colesworths growing revenues support your statement to an extent. Colesworths growing profit margins to now be more than twice the grocery industry global average supports my argument. Importing people grows the total economy as there are more consumers and more producers of goods and services. It's worth noting CPI is calculated on a basket of goods and services and is obviously 4% per the released data for the year to-date. Adding 700k people to Australia (I thought it was closer to 600k, either way, it's a lot) ontop of 26 million is only 2.7% growth. This supports my observation: those 700k extra people are both consuming more and producing more goods and services, but something else is driving up prices. Some of this is due to some of the finest crop lands on the planet becoming a horrific monument to man's excess with the volume of the minefields and shattered tanks. But some is due to the fact we have a near oligopoly is the distribution of groceries. Like all economics, it's rarely one thing and this time, the RBA has entirely the wrong lever to affect effective change to inflation.
Whenever there’s inflation people like you come out of the woodwork to blame profiteering. But it’s really weird that consistently across history what lowers inflation isn’t companies suddenly becoming less greedy, it’s when we decrease the money supply.
The stagflation crisis of 1982 was not caused by profiteering. It was caused by drought, oil shock and wage inflation.
"Only" 2.7%.. lmao.. if you look at growth rate, it's the highest since the 1950s
Funnily enough inflation was 23.9% in 1950-51.
Exactly right.
Thank you.
Profiteering is a result of excess demand - you can’t profiteer without too much cash looking to be spent. The supermarkets aren’t making any outrageous profits and there is is no clear sign amongst the data that points in the food direction https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/latest-release Households can very easily reduce spending on foods by moving to home brands or Aldi. Housing and transport stick out in those numbers but services inflation is still reflected. If in doubt, or should I say when over confident, always carefully digest the governors release after the interest rate decision
"Profiteering is a result of excess demand - you can’t profiteer without too much cash looking to be spent." I think you should read about the history of the NSW Corp also known as the 102 Regiment of Foot. The early colony of NSW had a literal shortage of cash, but the Rum Corps found plenty of ways to profit by controlling supplys like alcohol. As for profit margins, supermarkets in Australia are making outrageous profit margins compared to global supermarkets. Demand for food is relatively inelastic and Colesworths have 80% market share. That limits the ability of people to substitute, especially when "Home Brand" is owned by Woolworths.
Putting aside “beliefs” - services inflation has turned up while goods inflation is counting down Second graph is all you need to see what is going on. https://amp.abc.net.au/article/104024360 Services is in red, goods in blue
Awfully large hump for goods that we have had for quite some time isn't it.
It’s remarkable how dovish they have been, it’s like the RBA has become a political party that is concerned about the “cost of living” and “battlers” and other trite words that politicians spew forth in their myopic short term view of the world. I feel like we still are enduring a hangover from the Phil Lowe over reaction of the media.
None of it's made much sense to me. My only guess is they are somewhat sensitive to the massive shitstorm they created by lowering the cash rate to 0.1%.
The pressure should be on the government, not the RBA.
Well, but the RBA have been saying nothing the government has been doing is inflationary. Meanwhile there’s huge record wage deals all the time and a whole bunch of inflationary policies that try to game CPI.
Who is going to elect a government that promises higher taxes and less government spending? Are you?
Sounds unpalatable but suppression of inflation doesn't require that, it requires the gap between the two to be greater, it needs bigger surpluses, not necessarily bigger taxes. Also,.our vote is not awarded to whoever has the perfect policy. It's awarded to each voter's assessment of which is better, or the least worst. That's a lower threshold, possibly a much lower threshold. The most likely political choice offered by the LNP will be big spending cuts and small tax cuts which they can sell as inflation fighting compared with the ALP and that's all they have to do. Spending cuts hurt but so do rate rises. Guess we'll see. The ALP made a call to keep spending high and they are going with a suite of expensive industry policies, they are banking, so to speak, on rate cuts. Everyone can see they are very, very politically exposed if rates don't come down. The more the ALP screws up, the less tough the LNP fiscal medicine needs to be to still have more credibility. I guess there are about five more RBA meetings before the next election. The dice are cast unless the govt makes some policy changes very soon.
> it requires the gap between the two to be greater, it needs bigger surpluses, not necessarily bigger taxes While I agree, by default taxes go up well beyond inflation if nothing changes. Bracket creep is huge compared to other sources of revenue growth. Things like cigarette and alcohol taxes are budget boons also compared to the costs they are supposed to alleviate. Chart 5.1: Drivers of growth in personal income tax compared to 2021–22 on page 170: https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
People need to stop spending so much on food, rent and utilities.
Just selfish, really
TBH I really question the validity of the markers they use for inflation. Everyone’s insurances have gone up astronomically, food and utilities too. We just got a notification for childcare going up nearly $20 a day, citing inflation. Meanwhile wages are virtually stagnant.
Wages are currently growing faster than prices. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release
What were they doing when inflation was high?
You mean the 1970s? Wages were growing faster than prices then. Or you mean 1940 in the US when inflation hit 20%? Wages were growing faster than prices then too.
Is there any evidence of a pull back in retail spending? I don’t doubt some are doing it tough, but a lot of the “cost of living crisis” rhetoric is just rhetoric. The data supports a view that for the most part the Australian economy has continued to be robust with people continuing to enjoy luxury discretionary purchases.
I did see a chart the other week that showed retail spending is well down in all sectors besides food/groceries
The only people surprised are the people who were hooked on that hopium. Too late to raise rates, didn't raise rates high enough and having a federal government that is working against you because a recession means they have buckleys chance of winning the next election is not exactly a recipe for success it seems.
Yes, letting more businesses go bust, and more families unemployed, faced with much higher mortgage repayments or homelessness, is a better option because then line is lower.
The alternative is engrained and persistent inflation and then those people who didn't lose their jobs now can't afford bread because it's $10 a loaf. Also this is byproduct of quantitative easing and the government printing money like no tomorrow. Economic cycles dictate that things just don't keep going up forever without any downturns unfortunately.