The Cost of Living Crisis

Sometimes the best thing a government can do to help is to do less and trust the people more.

The Cost of Living Crisis
Photo by micheile dot com / Unsplash

The cost of living is becoming a crisis for many Australians and the government seems to have no resolution to the problems they have created.

Of course, the causation does not lie at the feet of the current government but they are now responsible for framing a response.

Unfortunately we haven't seen anything credible thus far.

Instead, we are told to wait for the budget which is set for release next week.

According to Finance Minister Katy Gallagher, the budget will see an increase in spending overall but she assures us this won't be inflationary.

If that is the case, it will be the first time I can recall that an inflation problem is not made worse by increased government spending.

To be honest, there is little the government can do to directly ease cost of living pressures. It's more a matter of what they shouldn't be doing in the first place.

Think about the most common of daily living cost complaints - food, fuel, housing and utilities (particularly electricity).

All of these are severely influenced by government policies and the less government does to interfere in these areas the better off we'd be.

Our high electricity prices are a result of the mad move away from fossil fuel power generation.

This move is driven, not by virtue, but by taxpayer subsidies of wind and solar, which in turn make the fossil fuel generators unable to operate profitably.

The 'free' renewable energy is costing us a fortune.

My Sydney based son told me yesterday that his rent is going up by 20% next month. Apparently the demand for rentals is sky high thanks to the return of international students.

The Federal government has chosen to prop up the Australian diploma mills with a bunch of plagiarising foreign students while State governments (and councils) add layer upon layer of red, green and black tape to new housing developments.

The real losers are those Aussies looking for a place to rent.

Then we come to the price of fuel. When I went to fill up recently, diesel was $2.47 a litre. That's a budget killer for anyone travelling long distances regularly.

Around twenty percent of that price (around 44 cents) is tax.

And then we come to the cost of food. We've all seen inflating prices and deflating package sizes recently. This shrinkflation means you pay more and get less.

Some of this is due to primary production input costs like fuel and fertiliser but a lot of the cost is business overhead as a result of government regulation.

Put simply, running a business is made infinitely more expensive and complex because of government requirements. That means they have to charge more for everything just to cover their costs.

Throw in the high wage rates and inflexible workplace regulations and small business is being squeezed every which way.

There isn't much government can do about these problems except to do less.

If they cut taxes, slashed regulations and stopped wasting our money on useless programs we'd be in a much better position.

Sure, such a program it would entail a modicum of personal responsibility and accountability to be handed to the Australian people but even in a worst case scenario, it's hard to imagine we would end up in a worse position than successive governments have placed us in right now.

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