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A higher demand for goods and services has prompted a great financial year for businesses across Australia, but inflation is causing suffering for consumers.
According to the Australia Bureau of Statistics (ABS), fewer COVID-19 restrictions have allowed businesses to thrive, with every industry recording increased profits in 2021–22.
“Profitability was largely driven by higher demand for goods and services, which saw businesses pass higher costs onto consumers,” commented Robert Ewing, ABS head of business indicators.
“After slower profit growth across the earlier COVID-19 pandemic-affected years, almost all industries recorded higher operating profits in 2021–22. This is despite many businesses seeing increased input costs and a reduction in government COVID-19 subsidies.”
The mining industry led the charge, with profits of $84.2 billion. ABS said this was fueled by higher export prices. Rental, hiring and real estate services trailed at $41.7 billion: “Businesses of all sizes increased income and operating profit in 2021–22,” Mr Ewing said.
It’s no surprise that the rental market made such huge profits, as the rental market has tightened in recent years, creating over-inflated prices for renters. The Reserve Bank of Australia (RBA) said this is likely to continue for the foreseeable future.
“The rental market has tightened considerably since 2021. Rent inflation has picked up and is broadly based across new and existing tenants, property types and the states. Rent increases have also become more common, and larger on average,” said the RBA.
“Properties with a change of tenant have experienced larger rent increases than existing tenancies, and so have been more closely aligned to changes in advertised rents. The new dataset on rental prices discussed here has enhanced the measurement of rents in the CPI and afforded new insights into the private rental market.”
This inflation is affecting the mental health of people across the country. Paula Allen, global leader of research and total wellbeing at Telus Health, discussed the issue with SHRM: “We don’t feel a sense of control over this inflation.”
“This financial risk impacts our mental health: Are we going to pay for groceries? Do we need to cut back on health expenses? It’s not a small thing. It erodes our emergency savings as well, which is a big thing – having that cushion is a big, big thing for mental wellbeing.”
It’s no surprise then that people holding multiple jobs are at record numbers in Australia, with over 1 million people across the country holding a second job and almost 1 million holding multiple.
This creates further complications as people become more susceptible to burnout and work-related stress.
While it’s good to see businesses profiting, it’s important to remember who can suffer from this.
Jack Campbell
Jack is the editor at HR Leader.
