Treasurer's Economic Note - Consumer Prices - 30 October

The FairIT4OZ Campaign kicked off last week to get the word out on getting a better deal for consumers of IT hardware and software. This week, the Treasurer raised in his recent Economic Note  that the Government has asked the Productivity Commission to review the extent of IT price discrimination in Australia and the report is expected to be received next month.

This is great progress for the campaign, but there's more to do to gain action and support on this issue. I encourage consumers and businesses to provide feedback as the Productivity Commission welcomes comments  via retail@pc.gov.au. An excerpt of the economic note is below and a full version can be found here

Consumer Prices

During the week, we saw a welcome moderation in inflation for the September quarter, although many households are still doing it tough with cost of living pressures. The figures shine another light on the very strong fundamentals of our economy, which set us apart from the rest of the developed world. Most advanced economies are facing the worst possible combination of economic conditions – slowing growth, high unemployment and rising inflation. By contrast, Australia has solid growth, low unemployment – around half the levels in the US and Europe, with around 750,000 jobs created since this Labor Government came to office – and underlying inflation in the middle of the Reserve Bank's target band.

No doubt there'll be plenty of Australians under cost of living pressures watching carefully when the Reserve Bank takes its decision on interest rates on Melbourne Cup Day. Of course the Reserve Bank takes these decisions independently, but what the Government can do is maintain a disciplined budget policy to make sure we're not putting extra price pressures in the economy. That's why we're putting in place the fastest budget turnaround on record. The Reserve Bank has acknowledged our strict budget policy on several occasions and has said it has room to cut interest rates if it thinks that's necessary. What the Government can also do for the longer term is put in place the vital investments to expand the capacity of our economy. That's why the Gillard Government has put such a big emphasis on education and training – for example, the centrepiece of this year's Budget was a $3 billion skills package. It's also why we're rolling out major productivity-boosting infrastructure like the National Broadband Network. All of these investments are crucial if we're to have strong growth with low inflation for the long run.

While the CPI data showed that Australian prices for computing-related equipment declined in the quarter, we're still paying more for some products than consumers in countries like the United States. That's why the Government has asked the Productivity Commission to review the extent of IT price discrimination in Australia. The Government expects to receive this report next month which will be one small step on the road to providing a better deal for consumers of IT-related products. The Productivity Commission would welcome the views of consumers and businesses via retail@pc.gov.au.

Lastly, we saw a dramatic escalation of the industrial dispute at Qantas yesterday. The decision to ground the fleet obviously is a serious disruption to the national economy. That's why the Government stepped in and has asked Fair Work Australia to urgently deal with the dispute. The hearings began last night and will continue this afternoon. I urge Qantas, employees and unions to quickly resolve their differences for the sake of the Australian flying public and the Australian economy.

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Ed Husic MP
Federal Labor Member for Chifley


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