Economics for a dummy.

KambahOne

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I'm hoping someone has a better grasp of economics and can explain the confusing headlines I'm seeing at the moment regarding inflation.

There is all this talk about families struggling with the cost of living, inflation and stagnant wages etc with interest rates rising to curb it. But I'm also seeing record levels of company profits and low unemployment and now retailers are saying they expect a huge Xmass spending spree?

If inflation is people spending too much, who are the ones struggling? And vice versa, if people are struggling with the cost of living, low wages etc, where is the inflation coming from?

Anyone?
 

HD and Ink

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Hey, I'm no professor but I'll have a shot.

I know that Christmas has massive credit card spending. Folk think wtf I'll buy all the pressies and pay it next month or whatever. Credit scares the crap outta me cause there's a heap of folk that just sink in debt. Lots of tradies getting cashie jobs, execs pulling bigger wages. Not the shelf stacker at Coles, the person who can only get casual work and folk like this are struggling.

Company profits maybe go to like big super companies, mum and dad shareholders, company execs and like that. Look at Qantas the mongrel management paid themselves mega but then sacked all these workers. Dogs.

So unemployment, I think you only have to like work 1+ hour a week and then they don't count you. Then there's students, they don't get counted but might be doing cashies like tutoring, grass cutting or whatever.

So man for me I reckon the ones struggling (guessing) are on less that maybe $60 or $70k and lower. Most folk in OZ are the strugglers, finding extra couch pennies to buy stuff.

I've noticed that we maybe buy a steak 1 time every 2 weeks, it's a luxury, there's too many other bills like mobile, car, bike house insurance, rates, fuel cost, grocery costs going up. Mate I found lately I can't save nothing, last year I can't remember it like this.
 

BELMORE

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Scomo pumped too much $$$ into the low-income bracket during Covid and they are spending it all on durries. AU $ is weak against the USD so costs more to import goods, so goods costs goes up, but still residual $$$ in the economy from COVID. Slowly dissolving though.
 

wendog33

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Our 2 tiered economy mate. Trickle down economics, and Reagonomic/Thatcher policies, with most Western economies, hasn't filtered through to the bottom rung as promised.

More hurt coming next year economists predict to all World economies.

In Oz we are still experiencing the aftermath of C19 lockdown and low spending then. People going bananas in short term catch up. 2023 that will all change. Batten down.
 

Natboy

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Scomo pumped too much $$$ into the low-income bracket during Covid and they are spending it all on durries. AU $ is weak against the USD so costs more to import goods, so goods costs goes up, but still residual $$$ in the economy from COVID. Slowly dissolving though.
That’s right, too much money given out for job keeper/job seeker/dole bludgers. Labor wanted the Liberals to give even more.

Anyone who owns a business knows people weren’t squirreling those payments away
 

HD and Ink

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K. But you take the average punter say he's on $65k he's maybe working as a clerk in Service NSW so the dude might pay maybe $12k tax.

This bloke he don't have the chance at Tax deductions if he don't own a investment place of shares and like that. So he cops his maybe $52k a year and if he's got a Mrs and kid at home then maybe he gets to save some $$ every week.

Then the bloke on $200k. Maybe he cops $140k a year after tax. But he's maybe more likely to have shares or other investments and can cop some nice deductions, maybe a car, neg geared property or whatever. I'm guessing it's not real tough for him to chuck more into his super or savings.

Alls I'm getting at is that in joints like OZ, the US, UK there's folk few folk at the top dollars and most are down he bottom. Sure not a drama but maybe more tax cuts need to go to the lower income folk 1st so they can have a decent life.

Btw that example of the bloke working at RMS is a buddy and by the time he pays rent of $500 a week there aint a lot left.
 

BELMORE

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[
K. But you take the average punter say he's on $65k he's maybe working as a clerk in Service NSW so the dude might pay maybe $12k tax.

This bloke he don't have the chance at Tax deductions if he don't own a investment place of shares and like that. So he cops his maybe $52k a year and if he's got a Mrs and kid at home then maybe he gets to save some $$ every week.

Then the bloke on $200k. Maybe he cops $140k a year after tax. But he's maybe more likely to have shares or other investments and can cop some nice deductions, maybe a car, neg geared property or whatever. I'm guessing it's not real tough for him to chuck more into his super or savings.

Alls I'm getting at is that in joints like OZ, the US, UK there's folk few folk at the top dollars and most are down he bottom. Sure not a drama but maybe more tax cuts need to go to the lower income folk 1st so they can have a decent life.

Btw that example of the bloke working at RMS is a buddy and by the time he pays rent of $500 a week there aint a lot left.
So 62k and you pay fuck all tax, and you want more chopped off? So someone earning 200k has to foot the bill for that…
 

HD and Ink

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[So 62k and you pay fuck all tax, and you want more chopped off? So someone earning 200k has to foot the bill for that…
Hang on just tone down man. For somebody on $60K I never said the $200k dude has to tab up. You can't tell me man that there's no a heap of Fed govt waste that couldn't be chopped a bit here and there and go into tax relief for lower earners.
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Less than 6% of $4.2bn received in jobkeeper repaid by ASX-listed companies, Asic reveals

And BTW this isn't a fibros v silvertail thing but man surely govt chucking billions at the Barrier Reef or not going after Jobkeeper money not returned is some that could've gone back to the low income workers.
 

BELMORE

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Hang on just tone down man. For somebody on $60K I never said the $200k dude has to tab up. You can't tell me man that there's no a heap of Fed govt waste that couldn't be chopped a bit here and there and go into tax relief for lower earners.
Like

Less than 6% of $4.2bn received in jobkeeper repaid by ASX-listed companies, Asic reveals

And BTW this isn't a fibros v silvertail thing but man surely govt chucking billions at the Barrier Reef or not going after Jobkeeper money not returned is some that could've gone back to the low income workers.
Why should a company pay back JobKeeper if it was eligible? If it was a self assessment, ATO will recover any ineligible recipients. Great Barrier Reef — yeah, it costs a bit of money to preserve a priceless asset.

topping up low income earners will damage the economic outlook further.
 

foREVerA7X

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As someone that falls in your 65-75k bracket, a mortgage, two kids and a wife who works part time, I am quite worried how '23 will pan out. We got diddly squat at the end of each pay cycle.

I was too young to care or notice when the GFC hit in '08 but by all accounts that happened at the snap of fingers, and if that is wrong, someone correct me. The Covid Economy has been in a slow burn for awhile now and it was eventually going to get to this. Personally, I can't see it lasting the same duration as GFC and the RBA will do something once people stop spending, which appears to not be happening just yet.

In regards to your comment about companies making more money, I work for quite a large Lubricant Supplier and we made more profit this year than last. This was down to the increased cost of goods/materials which we then passed onto the consumer at a higher rate. This eventually meant a higher GP margin.
 

SPEARTAKVIDREFS

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I know fuck all about this stuff but Ill have a go anyway.
What goes up must come down.
We are now (and shall continue for years to come) paying for covid.
Thats all I got.
 

The DoggFather

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I'm starting to think the great reset will actually be a thing.
 

Bulldog1966

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Long time ago now but i remember the days when working in lending interest rates hit 17% maybe even 18.
With the astronomical mortgages in existence these days this can't possibly happen again but I'd assume there is more pain to come too.
 

KambahOne

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Once again as a layman regarding economics, I'm getting the most confusing messages regarding our economy?

The RBA Governor Philip Low comes out and says "labor's IR policy to encourage wages increase will be bad for inflation and must be limited".
'

But the same Governor says schweet fark all about the "BLACK FRIDAY SALES...." that has been splashed across every screen and are suppose to pump over $6 billion into the economy?


If people are struggling, where's the $6 Billion coming from? If inflation is a problem, a massive goods sale of this magnitude is surely only going to add to the issue?

I just ordered a new set of gold clubs, did I do the right thing? :grinning:
 

CroydonDog

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Once again as a layman regarding economics, I'm getting the most confusing messages regarding our economy?

The RBA Governor Philip Low comes out and says "labor's IR policy to encourage wages increase will be bad for inflation and must be limited".
'

But the same Governor says schweet fark all about the "BLACK FRIDAY SALES...." that has been splashed across every screen and are suppose to pump over $6 billion into the economy?


If people are struggling, where's the $6 Billion coming from? If inflation is a problem, a massive goods sale of this magnitude is surely only going to add to the issue?

I just ordered a new set of gold clubs, did I do the right thing? :grinning:
Low has shown his lack of competence or independence enough by now surely? Probably time to shut his trap for a bit tbh
 

Natboy

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Once again as a layman regarding economics, I'm getting the most confusing messages regarding our economy?

The RBA Governor Philip Low comes out and says "labor's IR policy to encourage wages increase will be bad for inflation and must be limited".
'

But the same Governor says schweet fark all about the "BLACK FRIDAY SALES...." that has been splashed across every screen and are suppose to pump over $6 billion into the economy?


If people are struggling, where's the $6 Billion coming from? If inflation is a problem, a massive goods sale of this magnitude is surely only going to add to the issue?

I just ordered a new set of gold clubs, did I do the right thing? :grinning:
He probably should mention both but I guess that’s not in their scope to mention sales. I’d need to see the percentage of sales using credit cards, afterpay etc as well as credit balances not paid compared to when inflation was low. Pensions and dole money also went up. He’s been wrong recently but is 100% right here
 
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