Inflation is rising all over the world, and Australia is not immune, so the RBA [Reserve Bank of Australia] is aggressively raising interest rates. The explanation given is that there is something like a 300 billion dollar slush fund, squirrelled away by Australians, that’s driving spending, and therefore inflation. To reduce inflation, this slush fund must be reduced.
The RBA’s weapon of choice is interest rates. By raising interest rates, it forces the commercial banks to raise their own interest rates, especially on mortgages.
Makes sense, right?
Well no, actually it doesn’t, because the people who have access to that slush fund are at the wealthy end of the spectrum, and for them, higher interest rates won’t mean a damn thing. Their ‘consumerism’ won’t be affected because they’re simply too rich.
But how rich is too rich?
Everyone knows that Gina Rinehart is the wealthiest woman in Australia, but most of us don’t know how wealthy. I was interested enough to find out.
The data in the spreadsheet below comes from a Forbes article from 2019 listing the 50 richest people in Australia:
I recommend reading the entire article because it’s quite eye opening.
But getting back to wealth, someone’s worth is not the same as money in the bank. Worth is what they would have if they sold all their holdings and assets and converted them into cash. Clearly, Gina Rinehard does not have 14-plus billion dollars languishing in a bank somewhere. That would be ridiculous, but the grand total of 114.68 billion dollars in just 38 hands is even more ridiculous. And that’s just the people who are worth at least 1 billion dollars. There are 12 more people on the Forbes list whose worth is close to 1 billion. I didn’t bother counting them.
Nor did I count the baby millionaires, the ones who only have a few tens of millions…
At the other end of the scale, are the millions of ordinary Australians who barely make ends meet. At the bottom of that list are JobSeeker recipients who are expected to subsist on $40 a day. A little further up the food chain are those on fixed incomes [pensions] who do NOT own their own homes. Someone I went to school with falls into that category. She’s in her sixties and lives in a boarding house.
Then there are people like me. Thanks to my parents, I have a house, but I have no superannuation, and the only income I have is the age pension. That just went up by, wait for it, $10 per week to account for the cost of living rises. As of yesterday, I now get $2014 per month.
I know we are amongst the lucky ones because we do have a roof over our heads, but keeping that roof is getting harder by the week. I won’t bore you with a list of all the things we can no longer afford, I’ll just say that every appliance in the house has gone past its use-by-date and is breaking down. That includes the plumbing…
I accept that inflation has to be curbed. That’s a given. But we are part of the huge underclass of Australians most vulnerable to increases in the cost of living because our safety margins are so low to begin with. Essentially, we are the ones being punished for the inflationary spending of those higher up the food chain.
Is it fair?
-makes rude noise-
It’s time governments and institutions like the RBA stopped plucking the low hanging fruit just because it’s ‘easy’. The further ALL Australians get from financial and political equality, the more shaky democracy becomes.
Marie Antoinette did not say ‘Let them eat cake’, but she lost her head anyway. Literally.
Australia is a long, long way from that kind of mass hysteria, but democracy is a lot more fragile than we think. To be quite blunt about it, the current version of capitalism is strangling democracy because money equals power, and the middle classes no longer have either.
Sadly, we are living in interesting times, and they’re becoming more interesting by the day.