Add Category
We’re not fixing some of the real problems in Australia – cost of living, housing, investment –because we keep falling for the oldest trap in the political playbook. When it comes to fixing thorny problems for Australians, in any context, we must bin the blame game.
Why is it a trap we keep falling into? Well, when there’s a painful problem confronting you, pointing the finger is easier than solving it. Unfortunately, I don’t have to search far for examples.
Forcing the supermarket giants to divest is unlikely to lead to lower prices and may cost jobs.Credit: Asanka Ratnayake
Take our rising cost of living. This real and urgent challenge has perversely led to the proposal for supermarket divestment powers. These kinds of powers would allow governments to forcibly break up large retailers. It’s a proposal that’s been dismissed by just about everyone who has taken a proper look at it for the past three decades. Why? Because expert analysis indicates that it’s most likely to increase prices.
When you break up large retailers, who are among the largest employers in Australia, you risk Australian jobs. You also have the potential to cause real harm in regional Australia, where these jobs are crucial and where the big players invest vast amounts in logistics networks that can serve remote communities.
There’s a reason you don’t find many smaller players in regional Australia – the business case doesn’t always stack up. Coles and Woolworths have the scale to serve our regions, and what’s more they keep prices at similar levels whether you’re in the city or the bush.
Loading
We’re told these retailers are the cause of our cost-of-living problem. Yet, they make less than $3 on every $100 at the checkout and that hasn’t changed much in the last few years. Grocery price increases are also broadly aligned to most other price increases by percentage across our economy.
The real issue is glaring. It’s inflation. So how do you get inflation down? You limit spending and you make your economy more efficient and productive. But that’s hard.
Another red herring that’s been slapped on the Australian table is international students – supposedly driving our housing crisis. Students make up about 4 per cent of the rental market (and, to a large degree, it’s the studio apartment market they’re interested in). Student visas are almost back to 2019 levels – a 36 per cent drop since the post-COVID influx last year.