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For the better part of 18 months, the Reserve Bank of Australia (RBA) has warned that Australia faced a wage-price spiral that could drive inflation and interest rates higher.
For example, former RBA governor, Phil Lowe, told the National Press Club in April that “rising profits are not the source of the inflation pressures we have”, while continuing to warn of a non-existent wage-price spiral.
This claim came as several large firms, such as Woolworths, CBA, Qantas, and energy firms, reported stellar profits over the December half.
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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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