Jim's Gougeocracy
The burning question of our age is whether Treasurer Jim Chalmers and the coterie of overpaid and underskilled advisers surrounding him are genuinely as economically illiterate as they appear. Or whether they simply hold the Australian public in such profound contempt that they no longer feel the need to try.
Chances are, of course, it is both.
Treasury has formally warned of inflation and petrol price spikes should the Iran conflict escalate. Bleeding obvious, but fine. This is not analysis.
This is equivalent of looking out the window and announcing that it appears to be raining.
Still, better than nothing, given that nothing increasingly appears to be Treasury’s core business. One is still waiting for their formal warning that out-of-control spending and voluminous regulation kills productivity and causes inflation, but baby steps.
should not be used as an excuse for retailers to gouge customers.
He then asked the ACCC to report back “as necessary” on whether any such gouging was occurring.
Marvellous. Truly statesmanlike stuff.
One is compelled to ask the obvious question that apparently nobody in the Treasurer’s office or in the press gallery bothered to raise before this letter was dispatched: does the Treasurer have any actual evidence of gouging? Any suspicion that retailers are planning to engage in illegal activity? Any data suggesting anyone is behaving improperly? Any basis whatsoever for this intervention beyond the desire to be photographed doing something?
Because if the answer is no, and by all appearances it is, then what Chalmers has produced is not consumer protection. It is a press release dressed up as governance. A proof-of-life statement to his caucus colleagues demonstrating that despite having driven the Australian economy into a ditch at considerable speed, he still has both hands on the wheel and is prepared to keep driving.
And here is the part that should make every working Australian’s blood pressure spike faster than a Middle East oil tanker in distress: the single biggest price gouger in this country is not some rapacious petrol retailer rubbing his hands together in a servo forecourt. It is the government itself.
Inflation, which this government has enthusiastically stoked through years of reckless spending and regulating, is a tax.
It is the most dishonest tax ever devised because it requires no legislation, no parliamentary debate, and no ministerial signature. It simply erodes the purchasing power of every dollar in every wallet belonging to every working Australian who was naive enough to save.
But the government does not merely benefit passively from the inflation it creates.
It actively profits from it. Every time prices rise, the GST take goes up automatically, because the GST is levied on the inflated price of goods and services. No rate increase required. No bill to pass. The Treasury just quietly pockets the difference while Jim Chalmers writes stern letters about other people gouging.
Then there is bracket creep, that most elegant of silent muggings. As inflation pushes wages up nominally, workers drift into higher tax brackets without receiving a single dollar of real increase in purchasing power.
They are poorer in real terms and taxed more heavily in nominal terms, a combination that would be considered criminal fraud if a private company engineered it. When a government does it, it is called fiscal policy.
So to recap: the Treasurer is dispatching letters warning against gouging while presiding over a tax system that automatically gouges workers every time the inflation his own government created pushes prices higher. The audacity is, one must reluctantly concede, almost impressive.
This gets to the central dysfunction of how Australia now regulates its economy. The old model involved regulators identifying actual misconduct, gathering evidence, and prosecuting it. That approach required effort, legal rigour, and the uncomfortable possibility of losing in court. The new model is far simpler and considerably more photogenic.
Regulators and ministers now operate in the pre-crime business. They cast a giant wet blanket across entire industries, issuing warnings and requesting reports and commissioning inquiries, all before a single rule has been broken.
The message to business is not “do not break the law.” It is “we are watching you, we distrust you, and we reserve the right to condemn you in public at any moment based on vibes.”
Nobody should be surprised that this produces neither price stability nor productivity growth.
When the government treats every business decision as a potential scandal awaiting discovery, and every price movement as evidence of malice rather than markets, investment dries up.
Entrepreneurs calculate the regulatory risk and go elsewhere, or go nowhere.
The economy sits under the wet blanket, damp and inert, while ministers and regulators write letters congratulating themselves on their vigilance as Australians continue to get poorer and angrier.
Jim Chalmers has not protected a single Australian with this intervention. He has, however, generated a news cycle. And in a country where the government is the most accomplished price gouger in the room, the gall required to point the finger at a servo owner is something to behold.
How high will inflation get? This high:
