Analysis finds Australia’s inflation being driven by company profits, not wages

Re:Analysis finds Australia’s inflation being driven by comp... by Grimburger on Friday February 24, 2023 @07:22PM (#34932240)

The Australia Institute is a thinktank, funded by the Greens.

The conclusion is already foregone, they work backwards from there, it's like asking ASPI about defense spending.

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Re:Analysis finds Australia’s inflation being driven by comp... by JumpCrisscross on Friday February 24, 2023 @07:29PM (#34932299)

> Australia Institute is a thinktank, funded by the Greens

Source? If true, this doesn’t belong on HN.

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Re:Analysis finds Australia’s inflation being driven by comp... by thundergolfer on Friday February 24, 2023 @07:30PM (#34932311)

Ok, but most of the economic content posted here is funded by groups and individuals far worse than The Greens.

What kind of analysis would you find independent enough to pass muster?

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Re:Analysis finds Australia’s inflation being driven by comp... by JumpCrisscross on Friday February 24, 2023 @07:33PM (#34932336)

For one, I’d want to see the actual analysis. Margin expansion amidst inflation isn’t proof it is driving inflation. Given a low-labor business, inflation will expand margins as inputs bought at yesterday’s prices are sold as goods today.

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Re:Analysis finds Australia’s inflation being driven by comp... by gruez on Friday February 24, 2023 @07:58PM (#34932525)

https://en.wikipedia.org/wiki/The_Australia_Institute

>The Australia Institute is a left-wing[2] public policy think tank based in Canberra, Australia [...]

>The Australia Institute claims to not accept donations or commissioned work from political parties.[51]

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Re:Analysis finds Australia’s inflation being driven by comp... by Grimburger on Friday February 24, 2023 @09:42PM (#34933282)

They don't publish who funds them, at least ASPI is open about their money coming from overseas weapons manufacturers.

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Re:Analysis finds Australia’s inflation being driven by comp... by trog on Friday February 24, 2023 @10:09PM (#34933426)

So how do you know they are funded by the Greens?

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Re:Analysis finds Australia’s inflation being driven by comp... by Khaine on Friday February 24, 2023 @10:20PM (#34933489)

This doesn't belong on HN, because its garbage analysis.

From their 'analysis':

"Record profits on petroleum and mining activities (reinforced by a spike in global oil and gas prices following the invasion of Ukraine) led this surge, but the overall corporate sector experienced the most rapid growth in profits of any comparable period in 35 years."

So because of global shortages, commodity prices reached record highs, and companies <b>which are price takers<b> benefited from that, is now suddenly corporate greed? BHP doesn't set the price for Iron Ore, the market does. BP doesn't set the price for Oil or Natural Gas, the market does. When you cut off Russia who are a key supplier of those goods, that creates shortages and causes prices to spike. This means companies which extract those goods will make more money as long as costs remain the same.

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Re:Analysis finds Australia’s inflation being driven by comp... by thomjrob on Friday February 24, 2023 @11:02PM (#34933755)

"There are shortages, but if everything remains the same, they make more money"

???

That's a whack thing to say with a straight face.

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Re:Analysis finds Australia’s inflation being driven by comp... by gruez on Friday February 24, 2023 @11:28PM (#34933910)

Presumably you think this is "whack" because you feel it's unfair that companies are making more in revenue without a corresponding increase in expenses. What about the reverse situation? ie. there is an oversupply/demand collapse, prices go down, but their input expenses stay the same so they make less money. We're seeing this in the semiconductor industry. Should we stand with them in solidarity by continuing to pay pre-collapse prices, and have internet commentators point out how it's "whack" for them to rake in less money even though their expenses hasn't dropped?

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Re:Analysis finds Australia’s inflation being driven by comp... by makomk on Saturday February 25, 2023 @05:50AM (#34935623)

It really isn't, publications like the Guardian have just misled people about how the economy works and why corporations make profits in situations like this. It's basically a direct consequence of two things: people cannot buy stuff unless it's actually available to buy, and money does not disappear when it's spent. This means that when there's not enough stuff available to buy, everyone bids up prices until demand meets supply again, with the money ending up as profits at whatever parts of the supply chain are most constrained. This is a perfectly reasonable place for it to end up: those companies are actively helping make the problem less bad by existing and investing in production at the level they did, it incentivises more such investment, and - most importantly - limiting corporate profits and price increases cannot prevent people from becoming worse off in real terms because the amount they buy is still limited to what's actually being produced.

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