The Australia Institute Feed Items

The report, compiled by Dr Jim Stanford (Economist and Director of the Centre for Future Work), with contributions from several other economists at the Centre and the Australia Institute, confirms that higher corporate profits still account for most of the rise in economy-wide unit prices in Australia since the pandemic struck.

The good news is that corporate profits have begun to moderate, as global supply chains are repaired, shortages of strategic commodities dissipate, and consumer purchasing patterns adjust after the pandemic. This has occurred alongside a reduction in inflation of over half since early 2022 (falling from a peak of 8.9% annualised in early 2022 to 3.4% by June 2023). This further confirms the close correlation between corporate profits and inflation — but both profits and inflation need to fall further.

The report also reviews the methodology and findings of over 35 international studies confirming the existence of profit-led inflation across many industrial countries (including Australia). The methodology and findings of these studies are very similar to that utilised by the Australian Institute and the Centre for Future Work in previous research on profit-led inflation.

The Australia Institute has provided input to the Climate Change Authority’s (CCA) consultation on Economic Modelling.

Considering that Australia’s current Nationally Determined Contribution (NDC) toward the Paris Climate Agreement is “insufficient” against our fair share for a 1.5°C or 2°C warmed world, research supporting an ambitious 2035 NDC is hugely important.

We are concerned, however, that the modelling project as outlined in the consultation paper Economic modelling of potential Australian emissions reduction pathways is too narrow.

The consultation paper lays out that the Authority “does not propose to use this modelling exercise to assess the economic effects of physical climate change impacts, or the benefits (avoided economic costs) of greater reductions in global emissions.”

Based on industry average profit margins, food retailers make $1.2 billion profit from this waste.

This gives the major supermarkets a strong incentive to resist policy changes that would reduce food waste, such as reform of best-before labels.

Opinion polling for this report shows that a clear majority of Australians support various regulatory reforms to reduce food waste—including, notably, overwhelming support (78%) for reforming use-by and best-before date labelling and 72% support for relaxed cosmetic standards. While there is clear support for regulatory changes, 81% of respondents also see reducing food waste as at least partly the responsibility of individual consumers.

This emphasis on individual responsibility will sound familiar to observers of many policy debates: the way in which the responsibility for addressing systemic problems is either allowed to fall on, or actively re-routed onto, individuals and their actions, rather than on the implementation of systemic change by governments and industry. This will need to change if Australia’s food waste targets are to be met.

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For many Australians, 2023 has been defined by the ongoing cost-of-living crisis. The spiralling costs of consumer goods, along with persistently high petrol and energy prices, have left households struggling to make ends meet.

Nevertheless, even with the overwhelming and understandable distraction caused by inflation and ever-growing interest rates, climate change remains at the forefront of the nation’s consciousness. Over 70% of Australians say that they are concerned about climate change and its impacts, including the potential it has to compound existing cost-of-living pressures.

Concern about climate change remains high despite cost-of-living crisis

In 2023, Climate of the Nation asked for the first time about Australians’ concerns regarding the impact of climate change on the cost of living. Three in four (75%) say they are concerned about more expensive insurance premiums, and the same proportion (75%) are concerned about disruptions to supply chains making it harder to buy necessities.

The top three climate impacts of concern are more droughts and flooding affecting crop production and food supply (80%), more bushfires (79%) and the extinction of animal and plant species (79%).

Australians oppose new gas, coal and oil projects and fossil fuel subsidies

The NSW Government should reduce its use of consultants and have firmer rules for the consultants it does use.

NSW Parliament should consider limiting political donations from contractors, an order for papers for consultants reports and requiring consultants to appear before Estimates.

The Australia Institute’s submission makes the following recommendations:

1. Oversight of the NSW Government’s use of consultants be strengthened.
2. Include public sector capacity building in consultancy contracts.
3. Improve data on the NSW Government’s use of consultants.
4. Publish a clear and strict revolving door policy for public servants.
5. The NSW Parliament issue a standing order for papers, for the production of consultant reports and advice.
6. The NSW Parliament consider whether consulting firms could be called before Budget Estimates when they have taken government work.
7. The NSW Government and Parliament review whether a ban on political donations and other contributions from big government contractors, including consulting firms, would be appropriate and, if so, how it might be implemented.

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Coal gasification is a polluting, costly and outdated technology. The NeuRizer proposal would bring no economic benefit and significant environmental risks. It should not receive federal or state government approval.

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