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Australian workers are under assault from the rising cost of necessities at the same time as their real incomes are going backwards at the fastest pace on record.
Let’s take a brief look at the pressure points.
Energy:
The east coast gas prices have already tripled over the past year (solid blue line below), spurred by Russia’s invasion of Ukraine. And since gas is the marginal price setter for electricity, electricity prices have also risen around 20%, with Alinta last week predicting another 35% increase next year:
With the Northern Hemisphere winter approaching, and gas demand set to rise globally, east coast gas prices are set to rise further. Unlike Western Australia, the east coast does not have a domestic reservation policy. Therefore, east coast gas and electricity prices are hostage to the global market, which means further energy cost pain for Aussies east of WA. Food:
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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