(Image: Mitchell Squire/Private Media)

What do you get for $5 with Australian newspapers? Why, the same as you got for $4.50 a copy, and before that for $4. Welcome to the wild and wacky world of The Australian Financial Review, where inflation is both bad and good and where labour doesn’t matter — except when it’s being paid wage rises and where an AFR editorial is a reality construct that only the editorial management of the paper can understand.

Those few people who duck into their newsagents and buy a copy of the AFR may have noticed the paper now costs $5, up from $4.50 in 2022, which had been increased after a long period of costing $4.

That’s right. The AFR — a paper that rails against inflation, warns of the wage-price spiral and damns labour and Labor with the faintest of very occasional praise — is also among the leading hypocrites of Australian business as its management worries more about protecting profits than controlling costs. (As do its masters at Nine Entertainment, which is chaired by former federal Liberal treasurer Peter Costello, one of the lead wackos on the causes of inflation.)

The latest price rise is more than 11%. The previous was more than 12%. Accumulatively, it’s a 25% rise from $4 to $5 in the past couple of years, when inflation topped out at 7.8% in the year to December.

The AFR is the leader of the denialists rejecting the notion that one of the drivers of the high level of inflation is the desire for business to protect and boost profits and margins. It only grudgingly accepts that supply constraints are responsible for much of the inflationary surge — higher petrol and energy costs resulting from the Russian invasion of Ukraine 13 months ago and the constraints on global supply and production by the pandemic and lockdowns.

The real causes are greedy workers and unions, not to mention nasty taxes. The AFR has remained largely silent on real wage falls in Australia (and elsewhere), preferring to believe the fairytale of a looming wage-price spiral and a blowout in debt. 

For example, Monday’s editorial on the return to power of the ALP in NSW was headlined “Another election slide into bigger spending, debt and government”. Rather than examine the reasons for the defeat of the Coalition government, the AFR preferred its usual scaremongering.

The editorial could have equally been headlined “Another inflation-busting price rise from the AFR“, but that is a truth too close to home, especially for its fleet of vocal columnists and contributing mouthpieces.

Last week well-known economic and market analyst Albert Edwards described the sort of behaviour we have seen from the AFR and other businesses (Qantas, Santos, Woodside, Coles, Woolworth, Myer) as “greedflation”.

Edwards is known globally for being an extreme conservative — markets have nicknamed the Société Générale economist a “permabear” for his almost eternally gloomy outlook. He is not a big fan of labour and unions, nor of central banks and governments.

In a note last Thursday, he had this to say about the continuing focus the US Federal Reserve has on wages (which up until recently was shared by the Reserve Bank of Australia — and of course strongly believed in by the AFR).

Edwards questioned why the Fed has been so insistent on targeting wages instead of fingering business: “The primary driver of this inflation cycle is soaring profit margins. Rather than calling this out as the primary cause of high inflation, central banks have instead chosen to focus on rising nominal wages as threatening to embed higher inflation — the so-called wage/price spiral.” 

He wrote that corporations often raise prices of goods and services not because they need to due to rising labour and raw materials costs, but because they can get away with it by blaming inflation, something consumers have been primed to expect by media reports. 

Blaming wage growth for inflation seems particularly misguided considering that workers’ wages haven’t even kept pace with rising consumer prices, Edwards argued.

That’s something Crikey (and The Sydney Morning Herald’s Ross Gittins) have been pointing out for months now, but not the AFR — which remains stuck in the old-fashioned hypocrisy of Australian business that it has fed for decades.