He explained that this profiteering had a negative effect on almost every other part of society in Australia.
“Virtually everyone else has lost out during this inflation,” he said.
“Workers have lost out: their share of GDP is smaller. Small business owners have really lost out: their share of GDP is substantially smaller.
“But the corporate share grew during the post-COVID inflation to record highs, and despite a modest pullback it has stayed much higher than historical norms.”
“That is proof positive that companies were not just passing on higher costs on their own inputs. They were capturing extra profits.”
Lack of competition exacerbating the pain
Fels lamented a lack of competition in many Australian markets, with the nation experiencing a steady concentration of market power into the hands of corporate giants in the 21st century, with negative impacts for ordinary Australians.
“Let’s not kid ourselves – far too many sectors in Australia are anything but competitive,” he said.
“Just look around: banking, supermarkets, mobile telecommunications, internet services, energy, gas, transport, insurance, pathology services, air travel – in each of these markets, a handful of big players hold all the cards.”
“And what does that mean for consumers? Higher prices, fewer choices, and a lot less power.”
Fels suggested Australia needed several policy remedies to address a lack of competition and its impact on consumer’s hip-pockets, including stronger powers for government to break up large firms engaging in anticompetitive practices.
“We need a divestiture law – one that would break up big businesses in instances where courts have found that they have broken the law and where courts think that this is the best remedy,” he said.
“Divestiture has been very successfully but carefully applied in the United States – in areas like oil, cigarettes, chemicals and telephones and it should be part of our armoury.”
An annual celebration with a social impact lens
Now in its third year, the Laurie Carmichael Lecture is an annual keynote lecture hosted by the Carmichael Centre, an initiative of the Australia Institute's Centre for Future Work, and RMIT's Business and Human Rights Centre (BHRIGHT).
BHRIGHT addresses the human rights impact of business through research, education, innovation and collaboration, and is an interdisciplinary centre located in RMIT’s College of Business and Law.
Past Laurie Carmichael Lecture keynote speakers have included Nobel Prize-winning economist Joseph E. Stieglitz and international trade union leader Sharan Burrow.
In 2024, the Carmichael Lecture was included as part of RMIT’s College of Business and Law (COBL) Festival of Social Impact, a two-day event celebrating RMIT’s commitment to achieving UN Sustainable Development Goals through its work with industry partners, transformative research and innovative teaching.
Story: Finn Devlin
