Wednesday, Sep 04, 2013 at 11:21
What a lot of crap. Business cost increases are immediately passed onto consumers, thus leading to inflation. From the ABS website:
"The total (CPI) basket is divided into 11 major groups, each representing a specific set of commodities:
Food and non-alcoholic beverages
Alcohol and tobacco
Clothing and footwear
Housing
Furnishings, household equipment and
services
Health
Transport
Communication
Recreation and culture
Education
Insurance and financial
services."
That's a little more than "common household groceries" and shows how little you know about how the CPI is calculated and inflation is measured.
How often have you seen, "inflation is up this quarter because of a jump in (insert some section of the retail industry) sharp price increases"?
Going from charging $25 to charging $41 is an increase of 64% in one hit, and this amount of increase in one hit cannot be justified under any circumstances, even if there has been a major business input increase along the line.
My workshop landlord endured a 35% in rates over 3 yrs. At the end of that 3 yrs, he outlined to me his huge input cost increases and explained he had to charge a higher rent for my
shop. The rent of my
shop and my 11 business neighbours went up 5.5%. That was the first rent increase in 8 yrs.
I don't see where you get a 14% increase in business input costs, unless your major business input costs are related to one particular input that has skyrocketed - such as steel.
Wages are only growing at about 3% annually, and wages and associated wage costs, generally make up around 35% of business cost inputs.
Inflation is currently running at 2.6%, so I can't see where you get a 14% business input costs increase - unless you're talking about a 2 year period.
I sure do request reasons for massive price increases, and my insurance company has just been dragged over the coals for our
home and contents insurance. The premium went up 37% in one hit on our latest invoice.
I grilled them about the excessive increase and they simply stated they'd incurred quite a substantial, unexpected amount of losses on recent major events such as the QLD floods - thus they needed to recoup those losses. I continued to put the heat on them and they reduced the increase to 33%.
Interestingly, as part of my negotiations, I acquired quotes from 3 other insurance companies - who all claimed "lowest premiums around" - and their premiums were between 112% and 127% higher than my previous years premiums!
This is most certainly a prime example of business price gouging - and I most certainly have a right to an explanation from any business as to why a particular charge has skyrocketed, way above any reasonable expectation, and way above any comparable item price increase.
I've yet to see any major retailer suddenly increase the price for one particular article by 64% in one hit. People would just walk out on them, wholesale.
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