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Waleed Aly demands an apology for ‘inaccurate’ comments on cost of living, wages and inflation


Waleed Aly has been asked to apologize for his ‘false’ claim that the only way to stop inflation from rising is to keep wages low.

“It’s hard to think of a single measure so the cost of living doesn’t make the inflation problem worse,” Aly told ABC’s Insiders program on Sunday.

He said that ‘wage stagnation … so wages are falling in real terms is really what could keep inflation in check’.

But CoreData Research economist Andrew Inwood said Aly was making the assumption that Australia’s rising inflation was ‘broad-based growth inflation’ rather than being heavily influenced by global supply chains.

Social media commenters also said Mr Aly needed to issue a ‘retract and rectification request’, and that his statement was ‘clearly incorrect’.

Broadcaster and academic Waleed Aly (pictured) was criticized by an economist for his comments on wages and inflation

Broadcaster and academic Waleed Aly (pictured) was criticized by an economist for his comments on wages and inflation

Broadcaster and academic Waleed Aly (pictured) was criticized by an economist for his comments on wages and inflation

Inwood said supply chains are being squeezed by rising prices and reduced supply from China, and Russia’s invasion of Ukraine, which is affecting global food and fuel prices.

“Measuring inflation is complicated and really important because it’s one of the great indicators of the overall health of a country’s economy,” he said.

‘It is important for the government to try to keep inflation within its target range of 2% to 3% as that means the economy is growing but not overheating.

‘Inflation in Australia is running at just over 5% right now, or twice what it probably should be, attracting a lot of attention – especially after a long period of very low inflation and especially when we We’re at a multi-week high in a contested federal election. ‘

Aly, who comes from a legal, not economic, background, asserts that increased productivity is also not the answer to inflation because “even if people put more money in their pockets, it will is inflation”.

Mr Inwood, an economist, said the challenge was that ‘inflation can come from three areas – rising wages, productivity or increasing external costs’.

“Right now, the biggest drivers of inflation come from things that we import like gasoline and fertilizer, which are driving up the cost of transport and agriculture in the country,” he said.

He said transport and agriculture were hit hardest by inflation – fertilizer from China was $400 a tonne about six months ago and is now close to $1,100 a tonne.

Mr Inwood said the Reserve Bank of Australia calculated inflation by looking at a basket of 11 everyday costs, from housing (the biggest expense, accounting for 23% of the cost) to communications (the biggest cost) the minimum fee accounts for 2%).

Economist Andrew Inwood revised the Waleed Aly television commentary on economics.  Pictured is a female trader on a construction site

Economist Andrew Inwood revised the Waleed Aly television commentary on economics.  Pictured is a female trader on a construction site

Economist Andrew Inwood revised the Waleed Aly television commentary on economics. Pictured is a female trader on a construction site

Transportation, education and food costs rose the most in the last quarter, while the rest were in the 2-3% range – for example, housing prices rose 2.3% nationally.

Mr Inwood said: “The other thing the RBA looks at is what is happening with wages – and wages in Australia have been relatively stable over the last 10 years.

‘In the RBA’s final report, wage growth remained fairly flat at 2.3%, up from 2.1% in the December quarter.

‘So yes – inflation is here and it is affecting Australians at petrol stations and in supermarkets – but big indicators like housing and wages have remained the same, which makes the solution difficult. more manageable and much more complex. “

Reactions to Mr Aly’s comments were also swift on social media, with some calling for his understanding of economics and saying he should apologize.

Channel 10 broadcaster Waleed Aly was asked to 'try to think harder' following his comments on wages, cost of living and inflation.  Pictured are transactions on a construction site

Channel 10 broadcaster Waleed Aly was asked to 'try to think harder' following his comments on wages, cost of living and inflation.  Pictured are transactions on a construction site

Channel 10 broadcaster Waleed Aly was asked to ‘try to think harder’ following his comments on wages, cost of living and inflation. Pictured are transactions on a construction site

A writer ‘could try to think harder’ if, as Mr Aly says he cannot ‘think of a single measure so that the cost of living doesn’t make inflation worse’.

Another added: ‘Waleed needs to refresh his grasp of economic fundamentals on the relationship between productivity improvement and inflation.’

A third person wrote: ‘Some rather questionable economic analysis from Waleed Ali – using a specific term like the timing of hyperinflation incorrectly and linking current inflation to wages.. . will confuse people. “

The poster wrote: ‘Perhaps Waleed should stick to the stories that care about people and laugh at the puns’ of The Project co-host. ‘

Waleed Aly’s comments on cost of living, wage growth and inflation

‘We are now in a situation where the (election) campaign is built on the contradictions of both sides, because the important issue is the cost of living.

‘The poll says, it’s the number 1 issue for voters.

‘Inflation is skyrocketing now, far beyond what people think, so the cost of living is something you need to address.

‘It is difficult to think of a single measure so that the cost of living does not make the inflation problem worse.

‘The reason inflation is hard, is the panacea for it is really, really bitter.

‘For example, the fact that we have wage stagnation, so wages are falling in real terms, is really what could keep inflation in check.

‘It’s just that nobody wants that. We want the government to control inflation somehow, but when you ask us what we want from the government, there is no way to stop it.

‘It actually made inflation worse. Everything we wanted from the government made it possible.

‘I don’t see any parties, and this doesn’t even blame them, I don’t see that they can cut that circle.’

‘(Increasing productivity is not the answer because) even, to the point of putting more money in people’s pockets, that would lead to inflation.

‘This is just an economic relationship, and that’s why you have the RBA (Reserve Bank of Australia) to try to keep inflation between two and three per cent because there’s this argument about natural interest rates. nature and natural area of ​​inflation and that’s pretty much what we’re looking at.

‘Now the RBA is saying it could take two years before we get back to that.’



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