Inflation

Reading this morning's Financial Review, an article mentioned that pricing of goods was under control, but services was the issue.

Reminded me of a what I'm seeing out here in the service sector, and what was not an issue many a year ago. Here is an example, vehicles: decades ago a vehicle manufacturer would use the same transmission for various models over an extended period, mechanics/technicians would be lowly paid and competition between repairers was strong. Repairers would rebuild transmission stock in their down time and have the units ready for sale, vehicles would be off the road for a day or three, and competition meant that margins were tight and prices reasonable.

Jump forward to the last decade, and in particular the last three years, and things have turned around. Vehicle manufacturers release models like there is no tomorrow, each time with a modification to parts, meaning that there is no interchangeability, automotive workshops have not grown in numbers to match the size of the vehicle fleet, and repairers are unable to keep changeover stock on their shelves due to the vast number of different units required.

Where once a failed transmission would cost a customer a couple of phone calls to find a price that they're willing to pay and a few days off the road, has turned into a nightmare. Vehicle owners are calling multiple repairers just to try and find one that has room, time and the capability. Quotes are very fluid, repairers are working flat out just to keep up with their regulars, let alone trying to please new clients.

Yesterday I spoke to the service manager at a large dealership, they have a vehicle with a faulty manual transmission. In normal times they would remove the transmission and outsource it, however, their usual repairer is booked solid for 5 months, and the service manager can't find anyone else able to do the work within a reasonable timeframe.

Repairers are struggling to keep up with the high demand, staff shortages are a problem, delay in spare parts is getting worse. There is no choice but to increase prices, sometimes to ridiculous levels in an attempt to dissuade people. But with a shortage of new and used cars on the market, people have no choice but to pay high prices for repairs, and repairers can't keep up. It is a viscous circle, which is happening in many different sectors of the economy.

Current inflation - With the excessive amount of Covid cash still floating around the economy, large chunks of mortgages paid off by a significant number during Covid lock downs, people are willing and able to pay for expensive services.

The price of goods is coming down, the price of services is staying stubbornly high and increasing.

Yeah, money's not going nearly as far as it used to.

I'd intended on getting a trophy wife one day but the way prices are inflating I'm only going to get a participation trophy.

over9k said:

Yeah, money's not going nearly as far as it used to.

I'd intended on getting a trophy wife one day but the way prices are inflating I'm only going to get a participation trophy.

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you're in the wrong game

sptrawler said:

Looting of the middle class, the poor get more support, the rich get richer and the middle class slides down the ladder paying for it. ?

Can't wait to see how this all looks in three years time.

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what is the middle clas these days

sptrawler said:

If the media thinks that inflation is under control, someone had better tell them they are dreaming IMO.

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no point , that dream is likely to be a hopium-induced fantasy ( and they are likely addicted to that hopium , prescribed as a treatment for copium )

sptrawler said:

Looting of the middle class, the poor get more support, the rich get richer and the middle class slides down the ladder paying for it. ?

Can't wait to see how this all looks in three years time.

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spoiler alert , the middle class are much poorer but the gap to the poor looks so much narrower that the poor believe they are better off ( despite only getting more promises ) because normal people can't understand the fiscally insane elites ( who hide everything in 'charitable foundations ' and trusts )

once you understand that Halloween isn't scary at all

Search "gini coefficient". It'll tell you everything you need to know

“43.7 per cent of all statistics are made up on the spot.” Steven Wright

Belli said:

I recognise as it's in your face there is a focus on housing. To me the more worrying issue is this from the latest CPI figures.

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Governments at all levels and all persuasions have underinvested in public health for decades. We are now seeing the results of that with patients waiting years for treatment in the public system. Basic reason is a shortage of practitioners. Even if it was started now it will take yonks to increase that number anywhere above the attrition rate. Paying practitioners more does not increase the workforce where many are leaving the public system due to burnout.

Here is the rub. Even if the number could be increased it is going to cost a motza. And that motza involves taxes. You want a viable public health system then you gotta pay for it.

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The problem with the public health system, is everyone dropping out of the private health system and joining the queue for public funded services.
So that in turn forces the private health insurers to increase premiums, which then causes more people to drop out, $100/wk for private health cover isn't a small cost, most of the people i know have dropped out.

sptrawler said:

The problem with the public health system, is everyone dropping out of the private health system and joining the queue for public funded services.
So that in turn forces the private health insurers to increase premiums, which then causes more people to drop out, $100/wk for private health cover isn't a small cost, most of the people i know have dropped out.

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i never joined , since i have dentures and a long history of poor health , private health was never a serious option ( not even to invest in )

farmerge said:

Changing insurers??????

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Yes he did, and the 2 policies left were ok with extra no claim bonus etc

over9k said:

Yeah, money's not going nearly as far as it used to.

I'd intended on getting a trophy wife one day but the way prices are inflating I'm only going to get a participation trophy.

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Participation is the best bit though

It's funny how I think I'm well off when I participate with only half an eye

sptrawler said:

The problem with the public health system, is everyone dropping out of the private health system and joining the queue for public funded services.
So that in turn forces the private health insurers to increase premiums, which then causes more people to drop out, $100/wk for private health cover isn't a small cost, most of the people i know have dropped out.

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That is a common belief but it is only a small part. It is overall demand increase including that for services such as physiotherapy, podiatry and a range of other health professional services including attendances at ED for minor issues when a GP cannot be accessed or a patient cannot afford the out-of-pocket cost.

Belli said:

That is a common belief but it is only a small part. It is overall demand increase including that for services such as physiotherapy, podiatry and a range of other health professional services including attendances at ED for minor issues when a GP cannot be accessed or a patient cannot afford the out-of-pocket cost.

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Also the increase in problems associated with lifestyle eating habits and the consumption of other things that affluent societies can afford to indulge themselves in.
I've been to ED and my wife has worked in there, it is also astounding the amount of substance related mental health issues that bog the system down, it certainly is a complex issue.

divs4ever said:

i never joined , since i have dentures and a long history of poor health , private health was never a serious option ( not even to invest in )

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As an investment it has its advantages, the Govt's can't afford to not have the private sector help foot the bill, it's a bit like social housing the Govt doesn't want to supply it, so they give out all the perks, for the private sector to run it.
With healthcare, all the Govt has is a big stick, to force those who can afford it to pay for it, so in a way it is a quasi Govt service.
As with everything else though, the Govt has to keep lowering the level the stick cuts in at and the more the middle class slide down the ladder.

sptrawler said:

it is also astounding the amount of substance related mental health issues that bog the system down, it certainly is a complex issue.

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Topical, my client this morning is an ED doctor at Royal Perth and relayed exactly what he was saying you that probably the majority of her cases have their basis in mental illness.

sptrawler said:

As an investment it has its advantages, the Govt's can't afford to not have the private sector help foot the bill, it's a bit like social housing the Govt doesn't want to supply it, so they give out all the perks, for the private sector to run it.
With healthcare, all the Govt has is a big stick, to force those who can afford it to pay for it, so in a way it is a quasi Govt service.
As with everything else though, the Govt has to keep lowering the level the stick cuts in at and the more the middle class slide down the ladder.

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that is a Government problem QLD had a free health-care system funded by the state lotteries , BUT the Federal Government desired control , a database and equality across the land ... and here we are , more rules , a tax grab ( medicare levy ) and more billing fraud , and of course high ranking Government staff get themselves a 'gold card ' for helping create the system ( or is that conundrum )

the Federal Government wanted it , they took it , they mishandled it , taxed it , they half privatized it and now they they want sympathy

how about NO !! ( sympathy at all )

QLD had a system all the states could have copied , instead i hold TAH and TLC because the QLD Government just had to monetize an income asset ( after no longer needing to fund the hospital system )

... and did i mention half of Australian's personal details are in the hands of spammers and criminals , thanks to the Medibank hacks

divs4ever said:

that is a Government problem QLD had a free health-care system funded by the state lotteries , BUT the Federal Government desired control , a database and equality across the land ... and here we are , more rules , a tax grab ( medicare levy ) and more billing fraud , and of course high ranking Government staff get themselves a 'gold card ' for helping create the system ( or is that conundrum )

the Federal Government wanted it , they took it , they mishandled it , taxed it , they half privatized it and now they they want sympathy

how about NO !! ( sympathy at all )

QLD had a system all the states could have copied , instead i hold TAH and TLC because the QLD Government just had to monetize an income asset ( after no longer needing to fund the hospital system )

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In W.A a similar system was in operation, most people had private health insurance because it was cheap, those who didn't the State Govt picked up the tab.
Then along came Medicare, over servicing, over prescribing and people overusing and now, as usual from great intent, comes a great big mess. ?

NDIS is heading down the same track, over servicing, over prescribing and over charging, where I live they are going to have to put in new roads for NDIS gophers. ?