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Thursday, March 29, 2012

Post haste

An essential government-operated monopoly service that has millions of customers used the increase in GST in October 2010 as an excuse to put up the standard rate of their product by 17%.

From July - barely a year and a half since that massive hike - the price will increase again, this time by 14.5%.

The total increase of this product from two years ago - during which time inflation has risen less than 5% - is a staggering 28.5%!

There's more gouging going on here than a French rugby team. They justify the rise as compensating for less use of the service. So the question is, will ratcheting the price of the basic service up by 28.5% over the last two years reverse that trend?

I'm beginning to think it doesn't matter much to them; they regard the product's demand as relatively inelastic with a captive consumer base and are prepared to make drastic increases to try to support revenue. This is a sad game for a state monopoly to play; they are cutting their own throats in the long term. Thanks, Dr Cullen, you rich prick.


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