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  • Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    by Melissa Donnelly

    Melissa Donnelly

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    New labour rights coming into effect on 26 August, including the ‘Right to Disconnect’.

    On Monday, 26 August, several legal and regulatory changes included in the Closing Loopholes Act (passed earlier this year by Parliament) will come into effect. These changes will better protect casual employees, with a new legal definition of what constitutes casual employment (rather than leaving it solely to employers), and better pathways for casual workers to obtain permanent employment. New protections for ‘employee-like’ workers in the road transport and platform economy (including food delivery riders and ride-share drivers) will also come into effect.

    One of the most exciting changes coming on 26 August is enactment of the new ‘Right to Disconnect’ for workers at large firms. (For smaller workplaces, these changes come into effect next year.) This marks an important step forward in workers’ ability to turn off their devices outside of normal work hours, and get full value from their leisure time.

    The importance of these protections, and some detail on how workers can make the most of them, are provided in this commentary article by Melissa Donnelly, National Secretary of the Community and Public Service Union. The commentary originally appeared in the Canberra Times. Ms Donnelly refers to research from the Centre for Future Work’s annual Go Home On Time Day survey; see our full 2023 report on unpaid overtime for full details on those findings.

    Right to Disconnect Means Countless Aussies are About to Reclaim Knock-Off Time

    By Melissa Donnelly

    Everything that is treasured by Australians gets a nickname and finishing work at the end of the day is no different.

    But I’d argue that knock-off time is more than treasured. It’s sacred.

    Workers will soon have the right to disconnect and not answer calls or emails outside of paid hours as parliament passes Labor’s bill endorsing the reform.

    For some, knock-off time leads to a frantic trip to pick up the kids from school and then piling over to the neighbours’ place to watch the footy.

    For others, it means a visit to the local gym, a game of social soccer, or dinner and drinks with friends.

    But as time has passed and technology has improved, we’ve become increasingly available.

    The iconic Nokia 3310 was released in 2000, but it wasn’t pinging at us every time we got an email or meeting invite.

    It was only used for texts, calls and, of course, snake.

    Fast forward to 2024 and things are little bit different.

    For many, our now very smart phones are ringing or sending us email notifications and texts more often than they aren’t.

    Things that could wait until you got to the office are being done while you eat breakfast, and that call that definitely could have been an email is being answered late into the night because you’re committed to your job and don’t want to ignore your boss.

    But it’s not sustainable.

    We’ve slowly but surely lost our sacred knock-off time, and in its place is “I’m heading off, but available on my mobile”, or “I’ll jump back online when I’m home to finish that thing off”.

    I don’t know that knock-off time really exists anymore, but I do know that we’re all the worse for it.

    The union movement has always fought to protect workers while they are at work.

    Basically, you now have the right to knock off at the end of day. Properly.

    But just as important, has been the long and consistent fight the union movement has had with businesses and governments to protect the right of workers to not be at work.

    Weekends, lunch breaks, annual leave, sick leave and parental have all been fought for and secured by the union movement.

    So, what do you do when your time away from work is increasingly compromised by the explosion of technology?

    You campaign for and secure the right for workers to disconnect.

    And that’s exactly what we’ve done.

    What does this mean in practice?

    It means that you’ve got a whole bunch of extra rights when it comes to being contacted after-hours or being asked to monitor emails or anything work related, outside of work hours.

    If an employer is contacting you outside of your working hours, there must be a good reason for it.

    The Fair Work Act provides a good outline to help determine if contact is reasonable or not. These include:

    The reason for the contact – is it an emergency or highly time sensitive?

    The method of contact and the level of disruption it causes (for example, an email is less disruptive than an SMS or phone call).

    Whether the employee is paid to be available or is paid for additional hours worked.

    The nature of the role and the level of responsibility held by the employee.

    The employee’s personal circumstances (including family or caring responsibilities).

    This law supports you to switch off and will make your boss think twice about contacting you.

    Basically, you now have the right to knock off at the end of day. Properly.

    You aren’t paid to be available 24/7 – so you shouldn’t be.

    You should be able to watch your child at footy training – uninterrupted.

    You should be able to go to a pottery class – uninterrupted.

    You should be able to go fishing, visit a loved one, make book week costumes (parents, head to toe in glitter and makeshift costumes will know it’s *this week*), play soccer, have a beer, go to a dance recital, plod around in your garden, read a book, bake a cake – uninterrupted.

    You might be asking yourself right now, how big of a problem is this?

    The Centre for Future Work at The Australia Institute publishes an annual report that shines a light on the amount of unpaid overtime that Australian workers are doing.

    The 2023 report found that on average, employees perform 5.4 hours of unpaid work per week, with full-time employees working about 6.2 unpaid hours per week. This equates to more than 280 additional hours per year, or about 7 weeks per year, per worker.

    Workers shouldn’t be working an extra 7 weeks for free every year.

    You’re meant to knock off on time, and you’re meant to be able to switch off at the end of the day because it is good for you. It is good for your mental health, it is good for your physical health, it is good for your relationships.

    Just because we can be available all the time, doesn’t mean we should be.

    My final comments are ones you’d expect from a union leader. I want to highlight that the rights you have as a worker aren’t really your rights unless they are enforced. And that goes for all rights – your right to flexible work, your right to a safe workplace and now, your right to disconnect.

    If you’re not sure how to access these rights and you’re a member of the CPSU, reach out to our Member Service Centre. If you’re an APS employee but not yet a member, it’s time to join.

    The right to knock off at the end of the day is back, and I encourage you to use it.

    Melissa Donnelly is the national secretary of the Community and Public Sector Union.


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  • No Blood – No Job

    Employment & Unemployment, Labour Standards & Workers’ Rights, Unions & Collective Bargaining

    No Blood – No Job

    Australia’s privacy laws and workers’ rights
    by Lisa Heap

    Author

    Lisa Heap

    Senior Researcher

    Organisations in Australia are using blood analysis as a means of screening future employees for ‘health risks’ that they allege may impact on their performance of work.

    Collecting sensitive information from blood analysis is restricted under Australia’s privacy laws. This is because the mishandling of this information can have a substantial detrimental impact on those who have provided the information. Requiring workers to submit to blood analysis is just one example of how organisations are now routinely collecting sensitive information from workers, sometimes without adhering to the requirements of privacy laws. Other examples include using fingerprint and facial recognition software and sensors that collect physiological and psychological data about workers.

    The protection from arbitrary interference with a person’s privacy is a fundamental human right. Interfering with this right, by collecting sensitive personal information, should occur in limited circumstances and only where necessary. However, this report shows that some organisations in Australia, are not treating the collection of sensitive information from workers as an exception. They are collecting sensitive information as a routine step in their employment processes.

    The findings of this report raise concerns about power, privacy, fairness, and the potential for discrimination in the practices being adopted by some organisations. These findings also show that Australia’s current privacy and workplace relations laws do not adequately address these concerns. Amendments to Australian privacy laws are currently being considered by the Australian Government with reforms likely to be put before the Australian Parliament before the end of 2024.

    This report examines the need for new provisions within either or both privacy or workplace relations laws that set out the rights of workers to protect their sensitive information. It argues that regulation should be geared towards, not only protecting workers’ rights to privacy, but to providing a disincentive to organisations hoarding and misuse of the personal and sensitive information of workers.

    The worker-centric approach called for in this report includes:

    • the development of one system of regulation to protect the privacy concerns of all workers regardless of employment status or work context
    • defining the collection of workers’ personal and sensitive information as high risk requiring both specific and detailed justification for the collection of this information and the genuine informed and affirmative consent of workers
    • the establishment of a tripartite mechanism to assist the regulator to develop and manage processes for dealing with the privacy and related human rights concerns of workers
    • the use of codes and frameworks, developed via a tripartite mechanism, to set out when and how workers’ information can be collected and used
    • the development of an easy to access, and timely, worker centered mechanism to address concerns about the collection and use of workers’ information.



    Full report

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  • Would you like a recession with that? New Zealand shows the danger of high interest rates

    Would you like a recession with that? New Zealand shows the danger of high interest rates

    by Matt Grudnoff

    Matt Grudnoff

    Senior Economist

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    New Zealand’s central bank raised interest rates more than Australia and went into a recession – twice.

    Recently there have been calls for the Reserve Bank to increase interest rates because inflation has remained “sticky” at 3.5%-4%. These calls are coming even though this may push Australia into recession. This horrifying scenario is being shrugged off by some as the price we have to pay to get inflation down – but the experience of New Zealand shows higher interest rates do not always bring down inflation, but they can very much lead to recessions.

    The June quarter CPI is due out this week, and many economists predict that it will increase slightly from the current 3.6%. This comes after consistent falls in the rate of inflation since the end of 2022. In fact, the inflation rate has fallen from 7.8% in December 2022 to 3.6% in March 2024.

    But a more than halving in the inflation rate is not enough for the armchair inflation hawks who are determined to see the inflation rate back into the Reserve Bank’s target band as soon as possible and regardless of the cost.

    The idea that the costs of slightly elevated inflation are in any way comparable to the costs of a recession is just ridiculous. Recessions cause widespread suffering, unemployment, and economic scaring that can last for a decade or more.

    Now that wages are growing faster than inflation, the costs of inflation are minimal, particularly when it is less than a percentage point above the target band.

    Even worse, higher interest rates are unlikely to bring inflation down any faster.

    Normally inflation is caused when the economy is booming, incomes and spending is rapidly rising, and businesses can’t keep up with all the additional demand. In this situation, higher interest rates act by reducing spending and slowing the booming economy.

    The inflation Australia and the rest of the world are facing is not that kind of inflation. It is a much more uncommon kind of inflation that is caused by supply shocks. Supply shocks increase the costs that businesses face which leads to increased prices. Importantly higher costs can’t be fixed by increasing interest rates, making them a far less effective policy response.

    As former governor Philip Lowe pointed out, there is very little that monetary policy can do to offset supply shocks, and you should “let the supply shock wash through the system.”

    New Zealand is a case in point. It has increased its official interest rate faster and higher than Australia. While Australia’s cash rate is at 4.35%, New Zealand’s rate is at 5.5%.

    The New Zealand economy has been dipping in and out of technical recession for 18 months. A technical recession is two consecutive quarter of negative economic growth – and New Zealand has experience that twice.

    By comparison Australia’s, economic growth has slowed but it has continued to remain positive.

    The problem for New Zealand is that the higher interest rates and slower economic growth have not led to a faster drop in inflation. If we compare the inflation in New Zealand and Australia, we can see that while inflation in New Zealand took off earlier than in Australia, both countries are seeing inflation come down at about the same pace.

    This should be a warning to the Reserve Bank that higher interest rates might work to crash the economy, pushing up unemployment, and heaping more misery on Australian households, but they will do little to bring down prices.

    Inflation is already on its way down as the supply shocks that set off this bout of inflation resolve themselves. When the June quarter inflation rate comes out, it might show the path back to the target band is not completely smooth. It may even increase slightly. But this is a time when the Reserve Bank needs to show courage and ignore the armchair critics and keep interest rates on hold.

    Inflation is coming down and a recession would be the worst possible outcome.


    Related research



    Profit-Price Inflation: Theory, International Evidence, and Policy Implications



    Full report

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  • Solid Foundations, Bright Future

    Education & Training, Industry & Sector Policies, Tax, Spending & the Budget, Wages & Entitlements

    Solid Foundations, Bright Future

    An Analysis of New South Wales Economic and Fiscal Advantages
    by Jack Thrower

    Author

    Jack Thrower

    Senior Economist

    New South Wales has one of the most prosperous and productive economies in Australia, with a diverse base of economic activity and strong labour market. However, years of austerity have hollowed out its public sector, creating one of the proportionally smallest state public sectors in the country in terms of both economic activity and employment.

    Despite the instrumental role the public sector played in navigating the state through the pandemic, weak wage growth and rising inflation have compounded the impacts of austerity, leading to significant reductions in public sector real wages. While the current government’s scrapping of the wage cap and implementation of public sector wage rises has undone some of this damage, most notably the October 2023 wage rises for public school teachers, more repair is needed.

    The NSW government has a strong fiscal position with which to manage these challenges. NSW maintains nearly the highest credit rating in the country and relies on revenue bases that are both diverse and stable. Additionally, there is considerable evidence that, if needed, several options are available to increase state government revenue. As the state economy weakens in response to high interest rates and declining real incomes, the state government has the responsibility to contribute to support the economy and broader society, through expansion of public services, repair of public sector wages, and support for the most vulnerable.



    Full report

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  • Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    Digital Technology & the Internet, Future of Work, Labour Standards & Workers’ Rights

    Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    by Fiona Macdonald and Lisa Heap

    Authors

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Lisa Heap

    Senior Researcher

    Artificial Intelligence (AI) is transforming the way we work and the jobs we do. AI innovations in workplaces can have positive benefits, including through productivity gains. However, AI applications can also have significant risks for workers and for job quality.
    AI applications, including automated decision making, are not neutral processes. Software can be designed and used to assist workers by augmenting their capacity and freeing up time for more meaningful or creative work. Or it can be designed and used in ways that intensify work and displace workers.
    International evidence shows the use of AI in workplaces for managing workers and work processes is extending and intensifying long-standing efficiency-driven logics that result in reduced autonomy and control and intensify work, undermining job quality and worker wellbeing. Even when designed for benevolent purposes, unintended consequences can arise from the adoption of AI in workplaces. These include serious breaches of privacy, bias and discrimination in recruitment and hiring, and unfair decision-making in performance measurement and evaluation.
    In this submission we argue that the promotion of AI innovation must not overshadow objectives and principles for decent jobs and fairness at work. We set out principles for new laws to regulate the uses of AI in workplaces with a goal of protecting workers.



    Full report

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  • New union rights to boost workplace cooperation

    New union rights to boost workplace cooperation

    by David Peetz

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    New rights for volunteer union delegates are set to make workplaces more, not less, cooperative, according to a new analysis by the Australia Institute.

    The changes coming into effect from today – under the federal government’s Closing Loopholes Act – guarantee the rights of volunteer union delegates to represent workers and paid training leave.

    The Centre for Future Work’s Carmichael Centre analysis found employees wanted their union to cooperate with employers and vice versa, and that giving workplace delegates a greater voice made this more likely.

    “Those who claim that guaranteeing the rights of union delegates must lead to greater conflict are dead wrong,” said Professor David Peetz, research fellow and author of Employee voice and new rights for workplace union delegates.

    “Workers expect their union and employer to cooperate effectively to solve problems, and reach agreements over pay and conditions, in both parties’ mutual interests.

    “Well trained delegates are best-placed to represent workers. They don’t acquiesce but they do cooperate. After all, they know it’s in workers’ interests for workplace productivity to rise.”

    The paper found this could help boost productivity, which on average was at least as high in unionised as in non-union workplaces. Strong representation and consultation made workers less resistant to productivity-boosting technology including artificial intelligence.

    In the past, many volunteer union delegates have been obstructed from properly doing their job to allow employees’ voices to be heard in the workplace. Now, their rights will be guaranteed.

    However, the report also warned unions not to waste the opportunity provided by new rights for paid training leave.

    “If they use it just to emphasise getting more ‘bums on seats’ in classrooms, ahead of taking a holistic approach to education, they won’t get anything new out of it,” said Professor Peetz.


    Related research



    Employee voice and new rights for workplace union delegates



    download the report

  • Employee voice and new rights for workplace union delegates

    Unions & Collective Bargaining

    Employee voice and new rights for workplace union delegates

    Impacts on wages, productivity, cooperation and union training
    by David Peetz

    Author

    David Peetz

    Laurie Carmichael Distinguished Research Fellow

    Media release



    New union rights to boost workplace cooperation

    A workplace delegate is a worker chosen to represent workers who are union members in dealings with management. Delegates are volunteers who perform their union duties on an unpaid basis in addition to their normal job at work. Delegates spend their time undertaking vital tasks for workplace representation.

    Some employers have actively placed barriers in the way of volunteer union delegates and paid officials. One study in the early 2000s found that 23% of delegates found management
    hostile, while 22% of delegates reported that management opposition to their role as a delegate had become more intense over the previous two years. Examples from various case studies, including court and industrial cases, illustrate some of the ways in which that minority of employers from workplaces with delegates expressed their hostility towards unionism and their opposition to delegates, including by placing barriers in the way of workplace union activists and delegates.

    The new regime of workplace delegates’ rights is very likely, overall, to increase the voice of employees, and thereby have positive consequences, over the long run, for pay and conditions, union membership, workplace cooperation, grievance resolution and productivity. However, the effects of new rights for paid union training leave depend very much on union responses, in particular on their subsequent reliance on classroom versus informal training and the ‘follow up’ of classroom education.



    download the report




    Factsheet
    New union rights to boost workplace cooperation

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  • Webinar: Stop passing the buck -Workers’ compensation and ‘gig’ workers

    Webinar: Stop passing the buck -Workers’ compensation and ‘gig’ workers

    by Lisa Heap

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    Workers’ compensation and rehabilitation are amongst the most important legal issues facing the ‘gig’ economy. This reflects the potential vulnerability of these workers and their families, co-workers, and community to harsh and long term consequences from injuries. For a while, it looked like federal industrial policy might ‘solve’ the workers compensation problem by redefining ‘gig’/platform workers as employees.

    However, the policy decision to enshrine minimum rights for a separate ‘employee-like’ category of workers leaves gig workers outside the scope of workers compensation protections.

    In this discussion we will hear from those researching and advising on the reforms necessary to better protect injured gig workers, a worker who has been seriously injured, and those who are organising and advocating for policy and law reform.

    Free Event – Register Now

    Speakers:

    • Michael Kaine – National Secretary Transport Workers’ Union
    • Professor Emeritus David Peetz – Carmichael Centre’s Laurie Carmichael Distinguished Research Fellow.

    When:
    Thursday, July 18, 2024 at 12:30 pm AEST

    Where:
    Zoom


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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • “I studied economics to better understand the world and equip me with better tools to serve society”

    “I studied economics to better understand the world and equip me with better tools to serve society”

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    Prof Anis Chowdhury, an Associate of the Centre for Future Work, was recently appointed Emeritus Professor at Western Sydney University, in honour of his decades of influential work in progressive macroeconomics and development economics. Prof Chowdhury’s address on occasion of his installment provides an overview of his evolution as a progressive economist and significant impact on global policy:

    Installment Address, Emeritus Professor Anis Chowdhury, Western Sydney University, June 2024

    Chancellor, Deputy Vice-Chancellor, colleagues, guests, ladies and gentlemen – and of course, graduands.

    Thank-you Deputy Vice-Chancellor for your generous introduction. My sincere thanks to the Board of Trustees for approving me for this prestigious title.

    I recognise the Traditional Custodians of the lands where our campuses are located, and pay my respects to all First Nations Elders past and present.

    I join my voice to all calls to honour their right to self-determination and development, as enshrined in the landmark 2007 UN Declaration on the Rights of Indigenous Peoples.

    Incidentally, at the UN, the first report I provided significant input into, was State of the World’s Indigenous Peoples 2009, and drafted, was Report on the World Social Situation 2010.

    My passion for human rights, equity and justice is the product of my time. I was born in 1954, a year before the leaders of newly-decolonised Africa and Asia met in solidarity in Bandung, Indonesia.

    Indonesia’s founding President Soekarno reminded, “our unhappy world [is] torn and tortured, … because the dogs of war are unchained once again”.

    He called for “Moral Violence … in favour of peace”, to “demonstrate to the minority of the world … that we, the majority, are for peace, not for war”.

    At school in the 1960s, we were constantly inspired by calls against all forms of discrimination, violence and exploitation in favour of peace, humanity and social justice.

    Despite the wave of decolonisation, we remembered Soekarno’s warning: colonialism “was not dead”. Instead, it took “its modern dress … It is a skilful and determined enemy, … appears in many guises… [and] does not give up its loot easily”.

    In solidarity with Franz Fanon’s ‘Wretched of the Earth’, I was a student activist, joining protest movements against the Vietnam War, Indonesia’s invasion of East Timor and India’s annexation of Sikkim; condemning the murders of the likes of Che Guevara and Salvador Allende; demanding the end of apartheid in South Africa; and joining Bangladesh’s liberation war.

    Today, my involvement in these movements would be labelled as “radicalism”; back then, it was the norm.

    I studied economics to better understand the world and equip me with better tools to serve society. My father, a doctor, readily agreed, socio-economic ills are the root cause of many diseases.

    In universities in the 1970s, dissent and debate were encouraged as ways to develop humanist and universalist views; to think big; and to become movers and shakers. We were inspired by world leaders like Gough Whitlam, and Tanzania’s freedom leader Julius Nyerere. Of course, Nelson Mandela stood tall.

    The 1970s were significant.

    • Bangladesh became an independent nation in 1971.
    • In 1972, the Club of Rome warned of the unsustainability of current consumption and production.
    • In 1974, the UN called for a “New International Economic Order” to end economic colonialism.
    • And the people of Vietnam defeated the US superpower in 1975.

    Alas, the 1980s slid us backwards, commodifying everything, including education. Universities turned into mass degree factories, and economics moved from the social science faculty, to business schools.

    Unfortunately, it was not just ‘Gordon Gekko’, but a Nobel Laureate economist, Milton Friedman, who promoted the idea that “greed is good”.

    Then came wars instigated by lies, against the urging of the UN Security Council; and the gleeful murder of half a million children as “collateral damage” justified as “a price worth paying”.

    We started this decade with rich nations stockpiling Covid-19 vaccines and blocking poor countries’ access to drugs, testings and vaccines to protect big pharma profits.

    Now, we’ve descended to the lowest point of our post-war history, with the massacre of over 40,000 Palestinians – mostly women and children – and those in high office openly calling for the total annihilation of a colonised people. The ICC and ICJ are threatened by the leaders of the free world acting like a mafioso cartel.

    How much lower can we descend?

    Has civilization progressed at all?

    We cannot resolve our differences with dialogue; and modern killing machines have replaced sticks and stones where might is right.

    Have I lost hope? NO.

    I look at the bright moments like Bob Hawke’s leadership of the anti-apartheid BDS movement that liberated South Africa and Nelson Mandela.

    Student protests and encampments for Gaza all around the world, including at Western Sydney University, maintain my faith in the power of active citizens.

    Under this “moral violence” for peace, universities are reconnecting with their essential humanity and their duty of care.

    As we celebrate our academic achievements today, we must also remember the students and teachers of Gaza’s razed universities.

    We must not lose sight of the real-world impacts of our academic pursuits. My knowledge of economics was enriched by my social and political activism. When I was in Indonesia to advise on the recovery from the Asian financial crisis and to draft National Human Development Report, I lived outside the gated community to understand the daily struggle of those who lost livelihoods.

    In 1970, Friedman wrote, “the social responsibility of business is to increase its profits”.

    Dear new business graduands, as I congratulate you, I also urge you to purge the world of this obnoxious Friedmanite idea that is destroying our planet and tearing our communities apart.

    Look instead to the “Social Business Model” of Bangladesh’s Nobel Laureate Muhammad Yunus.

    Work on the right side of history; stand up for justice and liberation; spread the “moral violence” for peace; and put people and planet before profit.

    Thank-you.


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • No need for panic over ‘sticky’ inflation: Jericho

    No need for panic over ‘sticky’ inflation: Jericho

    by Greg Jericho

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    Inflation has stopped falling, but there’s no need for a further rate hike, says Greg Jericho.

    Inflation is stubbornly staying above the Reserve Bank’s target, but it’s not because Australian consumers are flush with cash, according to Australia Institute Chief Economist, Greg Jericho.

    In fact, retail spending figures suggest that people are struggling and further suppressing consumer demand by increasing interest rates could have a detrimental effect on the economy, Jericho said on the latest episode of Dollars & Sense.

    “Pretty much since December, inflation has been stuck at that 3.5, 3.6 per cent area.

    “Whereas, before that, it had been coming down fairly steadily.

    “And so, some economists are getting rather panicky about the fact that inflation is ‘sticky’.”

    But that’s not the full picture, Jericho said.

    “What I care about as an economist is: are consumers out there spending like mad? And, as a result shop owners are going ‘wow, I’ve got lines around the block – I can raise prices’.

    “But what we see in the retail spending figures is that we are not buying much at all.

    “That is a real sign that we are not flush with cash, we are not doing well – households are really struggling.”

    While some are calling for the Reserve Bank to take further action, further suppressing consumer demand to get inflation below three per cent isn’t a silver bullet, Jericho said.

    “The Reserve Bank has a target – and it’s an arbitrary target – of trying to keep inflation between two and three per cent.

    “Other countries have different inflation targets.

    “There’s no natural law of economics that says once inflation goes below three per cent things are hunky dory.”

    Dollars & Sense is available on Apple Podcasts, Spotify or wherever you get your podcasts.


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages