In a recent article from The Epoch Times, the author delves into the issue of corporate “price gouging” in anticipation of troubled economic times. The article criticizes the Australian Council of Trade Union’s (ACTU) inquiry into price gouging and unfair pricing practices, arguing that it is a misdirection to shift blame from the real culprits of inflation – the Reserve Bank of Australia (RBA), state and federal governments, and labor unions – to businesses.
The author highlights the use of Alan Fels, the former chairman of the Australian Competition and Consumer Commission (ACCC), as the head of the inquiry, suggesting that it gives the exercise superficial credibility that it doesn’t deserve. They argue that the inquiry’s title assumes its finding, without providing an objective definition of what price gouging actually is.
The article explores different definitions of price gouging and inflation, pointing out the confusion between inflation and price rises. It explains that inflation is conventionally understood as caused by too much money chasing too few goods, leading to a devaluation of currency. The author suggests that while there was a post-COVID increase in credit, leading to inflation, it was also accompanied by a decline in the availability of goods due to disruptions in the economy.
The author challenges the claim made by the inquiry that corporate profits are driving inflation. They argue that profit margins may have expanded due to increased input costs and external factors such as the war in Ukraine, which drove energy prices sky high. The article also questions the evidence of “gouging” in various industries, such as energy, supermarkets, banks, and airlines.
Furthermore, the author questions the focus on corporate profits without examining union movements and their potential for cartel behavior. They suggest that unions should also be scrutinized for possible gouging practices and whether union fees provide value for money.
While acknowledging some good recommendations in the report, such as removing import tariffs on automobiles and avoiding needless restrictions on competition, the author criticizes other proposals that appear unrelated to price gouging. They argue that Australia may be facing a rerun of the 70s, with higher energy prices and inflation, and the union movement is preemptively deflecting blame onto big businesses.
The article concludes by emphasizing the importance of productivity, fiscal discipline, and monetary discipline as the answer to current economic problems, rather than blame shifting. The author raises questions about the process of appointing Alan Fels and urges readers not to be taken for a ride in the narrative of heroes, villains, and victims.
Overall, the article provides a critical analysis of the ACTU’s inquiry into price gouging and highlights the need for a more comprehensive examination of inflation and its causes. It challenges the narrative of corporate price gouging and emphasizes the importance of considering all factors contributing to economic challenges.
