Australia's mining sector has generated windfall profits over the past two years, the result of dramatically higher prices for fossil fuel energy, but has it driven inflation?
It notes Australia's mining sector has generated unprecedented windfall profits in the past two years, as the result of dramatically higher prices for fossil fuel energy — petroleum, gas, and coal — and other minerals."For the first time in 2022, mining profits accounted for over half of all corporate operating profits in the entire economy .
The paper says those enormous increases in prices were charged to purchasers for petroleum, gas, and coal products, and that is "clearly visible" in the producer price indices constructed by the Bureau of Statistics to measure inflation in costs of inputs purchased by various industries. The paper also shows that, since March 2021, inflation in consumer energy products — such as electricity, home heating, and automotive fuels — has been far worse than the overall rise in consumer prices.
"Energy products have made a disproportionate contribution to rising consumer prices in Australia throughout the post-COVID inflation episode. He says profits in industries such as wholesale trade, manufacturing, professional and technical services, and transportation have been relatively large in the pandemic era.
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