At the Heidelberg Pickles and Pappads, an Indian grocery store, owner Raj is fretting about the increase in prices of almost all commodities, which is beyond his control. He points to the India Gate Classic Basmati rice, earlier sold at 20-24 dollars now going at 33 dollars in most places. But he is keeping it at 29 dollars, he says just to maintain the goodwill of customers.
Raj is helpless about the price rise. “What to do. Firstly, the transport prices have gone up. So, when suppliers bring the containers in, they have to increase the price of everything by 5 per cent. Secondly, there is no export of certain items like atta from India, the export of wheat is banned because I think the internal market has no supply,” he rues.
He is also feeling the pinch of buying lunch from the usual Japanese takeaway place. “In this (Heidelberg) area, I pay 18 dollars for a bowl of fish, rice and vegetables. Now it is 20 dollars, the bowl size has become smaller and so has the size of the fish,” he laments.
Like him, young couple Vijay*, an IT professional, and his wife Meena*, who works in the health care sector, are finding it hard to shift their attention from the inflation surge. The couple have a three-year old daughter, who goes to childcare—which is another expensive affair.
Vijay says his wife drives to work and what used to be two weeks’ fuel budget lasts only one week now. And their mortgage has increased by about 300 dollars a month.
In the larger scheme of things, this is a small negative surprise but there is a nagging alarm, says Vijay as one does not know how long this will last given the Ukraine war and petrol prices going up. “We have to calculate our expenses just to build up some savings. We are preparing for it,” he says, adding, “Among friends now, this is a hot topic.”
Australia’s inflation hit a 20-year high with the Australian Bureau of Statistics on 28 April announcing its quarterly Consumer Price Index (CPI) figures of 5.1 per cent annually. It increased by 2.1 per cent compared to the last quarter in December 2021.
More broadly, the greatest increases are in fuel, up by 11 per cent in the quarter, new dwellings (up by 5.7 per cent) and tertiary education (up by 6.3 per cent). There is also a significant rise in prices for food and other grocery items, with vegetables up by 6.6 per cent quarterly, non-durable household items like toilet paper up by 6.7 per cent, according to reports.
And to top it all, the Reserve Bank has lifted its official interest rate from 0.1 per cent to 0.35 per cent.
Clearly, those struggling with rising costs are low-income earners such as pensioners and those on Centrelink allowance, says Jasmine Barker, a professional banker, adding, “It depends on their income. Interest rates are going to rise and will continue to rise. The people affected are those just affording the mortgage. Interest rates rising just tipped them over the edge, they could just afford it before when interest rates were low.”
“The interest rates and inflation will make people reconsider about the debt they might be buying or taking on. If they are buying a home loan, they will think twice before purchasing it”
However, contrary to the scare mongering and panic, few other families that The Indian Sun spoke to reveal they have not felt any real impact so far. In fact, marketing analyst Surkeinya Nongmaithem, who has just returned from a three-month trip to India, says things are much more expensive in India comparatively.
While they agree there is no magic wand to bring down inflation, they are cleaning up their accounts to stay on track.
For instance, Kavita*, marketing manager and a single mother of three, says, “I realised I was paying for accounts such as Disney Plus, YouTube Premium and other online streaming which I suspended. I also am doing away with take-aways and reducing going out.”
“The bottom-line is, it is affecting our lifestyle,” warns Vijay, adding, “Before the rate rise, people were already affected, in the next year or something they will really have to refinance because interest will be sitting at about 4.9 per cent. It will severely hit back, it has just started.”
Jasmine avers, “The interest rates and inflation will make people reconsider about the debt they might be buying or taking on. If they are buying a home loan, they will think twice before purchasing it.”
For the government, getting out of the high inflation environment will require fresh reforms to lift productivity, believe experts.
The fact remains, inflation is a big challenge and the years to come are not going to be easy for the average family.
“Ukraine-Russia war was only a pin on the bubble. Central Banks around the world had printed trillions of dollars to help people sail through the pandemic. Now that we are limping back to some sort of normalcy, the dollars that were printed and given free to people to tide over the pandemic are floating around in the economy making everything inflationary. I feel governments reacted in a knee-jerk manner and did very little due diligence when doling out people. So there’s a lot of cash in the economy now. To make matters worse, war has broken out in Ukraine, a region that exports wheat and fertilisers. Next year will be more dramatic with many nations faced with a risk of food shortages. One can only ask families to buckle up and spend wisely for the next few years,” says Fukeroon Sharma, a noted macro economist based in Melbourne.
(*Names changed for reasons of privacy)
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With Australia’s #inflation hitting a 20-year high, Heidelberg Pickles & Pappads, an Indian grocery store, owner Raj is fretting about the increase in prices of almost all commodities, which is beyond his control. #TheIndianSun @indira_laisram https://t.co/oRGOcuGDnf
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