OPINION: To be intellectually consistent, those who say pay rises are inflationary should be equally worried about profit increases.
Inflation is a real problem. But anyone who plans on using the prime minister’s jobs summit toshould be ignored unless the same breath is used to call for dividend restraint.
If business leaders are worried about inflation, the most direct way to battle it would be to lower profit and dividends. More important, however, is where dividends come from: they are necessarily created by corporations charging prices in excess of what they require to survive. They are charging prices that can give a return to the shareholders. Their very existence is evidence prices are higher than they need to be for companies to be solvent.
Fair enough. But this logic must then apply to individual workers, or even individual worksites, of which there are tens of thousands across the country.Yes, it may be fanciful to imagine an ASX 200 company taking a hit in the hope that others follow suit. It may be just as fanciful to imagine a number of them entering into some sort of compact to suppress dividends for a period to fight inflation.
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