High electricity prices in Australia blamed for sharp economic slowdown

Electricity prices jumped in July. Now, retail sales are falling as wallets run out of money. When Greens, Labor, Conservatives said we need insurance, only skeptics pointed out the price.

Commonwealth Bank economist, Gareth Aird, calls the fall a “shocker”.

–Adam Creighton, The Australian

In a sign sluggish wages and higher power prices are starting to bite, the new financial year has seen the biggest fall in retail sales since 2009…

The Australian dollar fell back towards US78c yesterday after the Australian Bureau of Statistics revealed retail sales had fallen 0.6 per cent between July and August, defying economists’ expectations they would rise modestly.

“Households are facing several headwinds, including record low wage growth, record levels of debt, slowing house price growth, and, importantly, sharply higher energy bills,” said ANZ economist Jo Masters. The drop in retail sales by a cumulative 0.8 percentage points over the two months to August, the biggest two-month decline since 2009, comes as consumers receive their first round of power bills after prices went up more than 20 per cent since July.”

Who would have thought? The country is forced to spend more on green electrons to change the global weather, and that means people have less to spend elsewhere.

Cafe and restaurant owners were hit particularly hard. Survey’s show people “believe” in climate change, but don’t want to spend more money on it. But no surveys ask the questions that matter — How many restaurant meals will you give up in order to cool the world by 0.0001C? Will you give up your sales job to make hurricanes slower (maybe) in ninety years?

The Australian experiment continues.

h/t Dave B

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