Australia’s Wesfarmers Urges Government to Do More on Inflation
(Bloomberg) -- The Australian government can do more to bring down inflation and take pressure off the central bank to hike rates further, according to the head of retail and mining conglomerate Wesfarmers.
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The Perth-based company, which owns retail brands Bunnings, Kmart and Target, reported strong half-year profits in the six months to December, in a sign consumer spending was resisting the Reserve Bank of Australia’s efforts to cool demand.
The central bank last week raised rates to a 10-year high and said further tightening would be needed to crush stubbornly high inflation. Beyond monetary policy, risks on the costs side, especially the pressure of a labor market squeeze on wages, could also flow through into higher prices, Wesfarmers Chief Executive Officer Rob Scott said in an interview with Bloomberg TV.
“There are also various supply-side adjustments, various government policies, fiscal initiatives, that could help ease some of the supply-side constraints around labor markets, energy markets and transportation that will, if addressed mean the Reserve Bank won’t have to go as hard on interest rates,” he said.
The company’s strong results could also be a sign consumers were opting for cheaper brands such as K-Mart and Target in response to cost-of-living pressures, he said.
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