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Trump factor looms as Canada and Australia go to the polls

postal-vote-freedom — Postal vote clears the air

It is pure coincidence that Canada is holding a national election on April 28, a week ahead of Australia’s Federal poll. These elections come as US President Trump continues to dismantle the framework of America’s hard-fought democracy. The resistance from Canada thus far has been manifest. Australia, well, not so much.

As Trump rolls out his plan to arbitrarily gut the US public service, shut down dissent, deport ‘undesirables’ and wage war through economic sanctions, his actions have had an alarming effect on the mood of voters in the aforementioned countries.

Polls in Canada and Australia clearly show the US leader’s plan to turn the United States into an autocracy is affecting politics here and abroad. Canada’s deeply unpopular Prime Minister, Justin Trudeau, resigned in January, acutely aware that despite a near ten-year reign, his chances of being re-elected were slim. Trudeau’s Liberal party (centre-left) was without a leader until Mark Carney, a political naif, a former central banker and businessman, was elected leader of the Liberal Party and consequently appointed as Prime Minister. Prime Minister Carney then called a snap election, at a time when Canada was deeply troubled by a cost of living crisis and a housing affordability scenario very much in parallel with Australia.

Carney and his Conservative opponent Pierre Poilievre have two things in common. They agree that the country is struggling with the cost of living crisis and housing shortages. They are, so far, united in their vocal opposition to economically damaging tariffs imposed by President Trump. They have also unilaterally rejected Trump’s notion of annexing Canada (his dream of the 51^st state). Grassroots opposition to the US in takeover mode led to a national slogan, “Elbows Up”. This is an ice hockey reference which means defend yourself or fight back (imagine a defending player slamming his opponent into the rink wall at speed).

Canada’s tactics on Trump’s tariffs and resulting publicity has had a major effect on election polls, which had previously shown as much as a 25-point lead by Poilievre’s Conservative Party. This has now been reversed, according to some polls, into a 6 point lead to the Liberals.

Early voting started this week, at a time when Carney’s Liberal Party maintained a lead in voting intentions. The latest opinion polls showed over 43% of Canadians would likely vote for the Liberals compared with 38% favouring the Conservative Party (CBC poll tracker).

Political commentators in Canada and elsewhere conclude that the ‘Trump factor’ is having a dramatic effect on the election campaign. The ordinary voter, it seems, does not relish the idea of ending up with a strong leader whose rhetoric sounds too much like Donald Trump. We are seeing this happen in Australia too, with Conservative leader Perter Dutton and his Liberal (right) party cohort slipping in the polls. Late last year Mr Dutton seemed to be aligning himself to the US strong man, but that rhetoric has since been toned down.

The Guardian observed that of the five political parties represented in Canada’s parliament before the election was called, there are two main choices for Prime Minister- Liberal leader Mark Carney and Conservative leader Pierre Poilievre. Such is the level of concern over Canada’s economic security and sovereignty, opposition voices such as the left wing New Democratic party have struggled to stay relevant.

The BBC’s analysis of the contest agrees – third place parties are struggling for survival. Unlike its counterparts in Australia and Europe, Canada’s Green Party is fighting to remain politically visible. The Green Party was recently disqualified from a televised debate for running too few candidates.

Polls suggest that the bulk of Canadians are opting to support either the Conservatives or the Liberals. The once influential New Democrats is polling at 8.5% (translating to just five seats out of 343). ND currently hold 24 seats. The separatist party, Bloc Québécois, stands to lose at least a dozen seats in Quebec.

Despite his lack of experience, Carney is steering his party to the centre, a tactic designed to draw swinging Conservatives to the Liberal fold.

Is this relevant to Australia as we head into the May 3 Federal election? Elbows Up: the key issues troubling voters are identical.

Housing affordability (and availability) and mortgage stress continue to bedevil working families both here in Australia and Canada.

My research assistant Al (I use him sparingly) turned this up:

“Housing affordability in Canada is a significant and growing concern, with rising home prices and limited supply contributing to a shortage of affordable housing options, particularly for renters and first-time homebuyers. A major factor is the high house-price-to-income ratio, meaning homes are disproportionately expensive relative to average household incomes.”

For Australia, Al produced this:

Housing affordability in Australia has deteriorated significantly, reaching its worst level on record due to rising home prices and high mortgage rates. A median-income household in 2023-2024 could afford only 14% of homes, marking a sharp decline from 43% three years prior. Low-income households are particularly affected, with families earning $50,000 per year able to afford only 3% of homes.

In Australia we can blame successive governments for refusing to even tinker with negative gearing (a tax shelter for those purchasing a home or homes as an investment, rather as a place for them to live). The last figure I saw (circa 2021), had 2.24 million Australians owning 3.25 million investment properties.

It was revealed recently that Perth is the most unaffordable housing market in Australia, with renters paying 30.6% of income on rent. At this level, that puts 42% of low income renters under stress.

It’s the sort of headline Québécois folk might read about Vancouver, way over there on the west coast, which routinely grabs ‘most expensive place to live’ headlines.

Opposition leader Poilievre has promised to cut regulations, diminish the role and size of government to facilitate homebuilding. Carney, meanwhile, is encouraging Canadians to accept government as having a key role in any mass home building effort.

The Guardian described Poilievre as a ‘brash populist and seasoned parliamentary “attack dog” who gives a voice to those who feel ignored by political elites. The Tory leader promised supporters he will crack down on crime, toughening sentences for the worst offenders. Did you read that Mr Crisafulli? Seconding that, Mr Dutton?

Canada’s parliamentary elections are held across 343 districts. Like the UK and Australia, the party with the most seats typically forms government. Trudeau’s Liberals, failing to win 172 seats in 2021, struck a supply deal with the New Democratic party. That’s not going to work this time.

In Australia, it seems we may end up with minority government, much like Trudeau’s coalition. The cashed-up Teals are ready to have another go and this election features independent candidates who may push incumbents to the brink. Keep an eye on Groom (Suzie Holt) and Dickson (where Labor candidate Ali France and independent Ellie Smith have been vigorously campaigning in Peter Dutton’s seat).

Just so you know, Dickson is the most marginal seat in Queensland, with Mr Dutton on a majority of just 1.7%. Labor has been pouring money into Ali France’s campaign and sent top level MPs to campaign alongside her, including Penny Wong, Tanya Plibersek, Chris Bowen and Katy Gallagher. Dutton has accused Labor of ‘carpet-bombing’ his electorate to attract donors. If you have an abiding curiosity about this contest alone, you’ll find political journalist Karen Middleton’s take on it thorough and impartial (well, I thought so). She did remind me that sitting MPs John Howard and Tony Abbott lost their seats at Federal elections, so yes, it can and does happen.

Coronation, what coronation?

How well I remember the coronation of Princess Elizabeth II on June 2, 1953. Then resident in Scotland, I was four years and seven months old and had just finished reading Das Kapital and was moving on to The Condition of the Working Class in England. I had also asked for Stories,Tales and Fables by the Marquis de Sade but faither said ‘Nae bairn should be reading that’ and offered instead ‘Noddy on the Runaway Train’.

Memories can be unreliable, as we know, certainly for people of my age, recounting the glory days of bygone youth. Just don’t ask me what I had for breakfast yesterday.

But I digress, as the world awaits tomorrow’s pageant involving the coronation of King Charles III and Queen Camilla. Charles officially ascended to the throne after the death of Queen Elizabeth. eight months ago. Now the official ceremony begins, just as many of us ask, will this ancient ritual then finally be consigned to the dustbin of history.

Charles has requested a lower-key affair than his mother’s coronation. For example, the guest list is capped at 2000 dignitaries, well below the 8000+ who attended Lizzie’s crowning at Westminster Abbey in 1953.

There’s a goodly scattering of Australians and expats among the invitees; including, of course, the Prime Minister, Anthony Albanese and the Governor-General, David Hurley. I should observe that the invitation goes to whoever is Head of State at the time, so it could just as easily have been that back bench bloke.

Mr Albanese was then asked to nominate a certain number of Australians and expats to attend. No doubt Dame Edna Everage would have been on the list, had she and her alter-ego not so recently died.

Rock singer Nick Cave’s fans were perplexed by his decision to accept the invitation. It should be noted that Cave, though Australian, has not lived here since 1980 and usually resides in England.

On his quirky blog, The Red Right Hand Files, Cave answered fans who wanted to know if the young Nick Cave would have been so inclined.

Cave answered that the young Nick Cave, like so many younger selves, was ‘young and mostly demented’. Cave, who says he is no monarchist, nor a republican, is nevertheless fascinated by the royals.

“I guess what I am trying to say is that, beyond the interminable but necessary debates about the abolition of the monarchy, I hold an inexplicable emotional attachment to the Royals,” he wrote in his blog.

Cave is not listed as one of the performers at the ‘Coronation Concert’ to be held in the grounds of Windsor Castle the day after the ceremony. Lead performers include Kate Perry, Lionel Ritchie, Take That and Andrea Bocelli. The Coronation Choir, whose members include refugee choirs, NHS choirs, LGBTQ+ choirs, and deaf signing choirs, will also perform. Ten thousand tickets were issued free via public ballot. We’ll get to watch it free via the BBC, which is producing and broadcasting the concert on Sunday.

Rolling Stone, while delving into the Nick Cave controversy, named musicians who were reportedly asked to perform but declined, including Sir Elton John, Harry Styles, Adele and Robbie Williams. Gone are the days, it seems, of being ‘commanded’ to perform.

Australia’s entertainment world will be well represented at the coronation ceremony, with invitees including ballet dancer Leanne Benjamin, soprano Yvonne Kelly and comedian Adam Hills.

The Prime Minister’s selection includes indigenous artist Wiradjuri, and expats British gallery owner Jasmine Coe, Barbican Centre CEO Claire Spencer, NHS nurse Emily Regan and Oxford vaccinologist Merryn Voysey.

The Australian Financial Review reported that Mr Albanese and UK High Commissioner Stephen Smith this week hosted a function for the Australian group at the envoy’s Kensington residence. Smith, if you’ll recall, served as a Minister in the Rudd and Gillard governments from 1993 to 2013.

Charles and Camilla have invited foreign royals to Saturday’s ceremony, as reported by People magazine. They include Denmark’s Crown Prince Frederik and Crown Princess Mary, Spain’s King Felipe and Queen Letizia, and Monaco’s Princess Charlene and Prince Albert.

After much speculation to the contrary, it is confirmed that Charles’s sons, Princes Harry and William, will attend.

Our friends in the folk music world may be pleased (or displeased) to see the motif of the Green Man used in the official invitation (see above) by heraldic illustrator Andrew Jamieson. The Royals interpret this as “The Green Man (being) an ancient figure from British folklore, symbolic of spring and rebirth, to celebrate the new reign”. We’ll take that as a win.

While Buckingham Palace is talking up the Coronation as an income-producing tourism event, economists are dubious. Bloomberg’s Tom Rees notes that the extra bank holiday is set to drag down what otherwise may be gathering momentum in the UK economy.

Forecasters warned that the additional day off on May 8 will help trigger a 0.7% slide in GDP in May and could tip the economy into a minor contraction in the second quarter.

It will be the second time in a year that royal events have weighed on growth, but analysis suggests the impact of those events is declining.

The Centre for Economics and Business Research estimates that extra tourism and spending in pubs, (which are allowed to stay open later over the weekend), will provide a £337 million boost to the economy.

Britain’s GDP was down 0.1% in the three months through September, after an extra day off at the end of the period for the funeral of Queen Elizabeth II.

There has been inevitable criticism of the cost of the coronation (upwards of £100 million). It comes at a time when Britons are battling a cost of living spiral (inflation of 10%), a nurses’ strike for higher wages and other dramas.

Despite a budget dramatically lower than the equivalent spent in 1953, there is still the largesse of the gold carriage.

After the coronation, the couple will take part in the Coronation Procession, seated in the Gold State Coach. The coach is 260 years old and used at every coronation since William IV in 1831. According to Yahoo News, which should know, the coach was commissioned in 1762 for a then cost of £7,562. Today it is worth over £3.5m.

Comparisons are odious, I know, but last year the Trussell Trust, which administers Britain’s biggest food bank, spent £7.5m, £4.5m more than in the previous year, replenishing food bank stocks for the needy. The Guardian explained that this is due to food donations from individuals and local charity food drives failing to keep pace with demand.

The coronation is undoubtedly an historic occasion and should be rightfully observed as such, even as members of the Commonwealth such as Australia may soon consider a referendum on whether we should become a Republic. Charles had reportedly asked that the coronation budget be a modest one, in light of tough economic times. Not that Charles will have to put his hand in his purse* – the coronation is funded by the British taxpayer.

As British songwriter Leon Rosselson said in his sarcastic 1979 song, On her Silver Jubilee:

‘Oh, the magic of the monarchy, the mystery sublime
Growing gracefully and effortlessly richer all the time’.

*King Charles inherited $500 million in assets from his mother and is overseer of a vast portfolio worth $46 billion. (Forbes magazine).

Submarines or social housing?

housing-crisis-homelessness — Image by Jon Tyson www.unsplash.,com

One of our readers commented that on the same day the media were banging on about the Federal Government’s $368 billion submarine plan, a lone SBS panel programme focused on the national housing crisis.

It is tempting to compare spending on affordable housing with the capital cost of up to five nuclear-powered submarines. The Federal Government’s (annual) commitment to affordable housing (currently $1.6 billion), equates to about 13% of its annual submarine budget (ie if the $368 billion is spread equally over 30 years). This assumes that successive governments will continue to spend that much on affordable housing (and submarines).

While housing is the responsibility of individual States and Territories, the Federal Government develops national policy and funds it with grants to the States and Territories.

That’s the theory, but in reality the critical shortage of housing, the cost of housing and the rising tally of homelessness is a clear and present danger to Australia’s social stability. Just this week the 2021 Census data on homelessness was released – what kept them, you might ask?

More than 122,000 people in Australia experienced homelessness on Census night, an increase of 5.2% from 2016, according to the Australian Bureau of Statistics (ABS).

The ABS interpreted the numbers as representing 48 people for every 10,000 people, compared with 50 people for every 10,000 in 2016.

While that is a reduction, the historical snapshot would seem to be an unreliable statistic, given that measures to reduce the spread of COVID-19 throughout 2021 contributed to some of the changes in the data.

“During the 2021 Census, we saw fewer people ‘sleeping rough’ in improvised dwellings, tents or sleeping out, and fewer people in living in ‘severely’ crowded dwellings and staying temporarily with other households,” ABS spokesperson Georgia Chapman said.

The affordable housing issue is not just about people sleeping in doorways. A new report produced by the Queensland Council of Social Services (QCOSS) clearly shows that working families are among those falling prey to the acute rental housing market shortage. It’s worse in some States than in others.

The report from QCOSS and The Town of Nowhere campaign is sobering reading. It predicts more than 220,000 households in the State will not have affordable housing within 20 years.

The report was prepared by national housing expert, University of New South Wales Professor Hal Pawson, and UNSW colleagues.

The tough conclusions include that there are around 150,000 households across Queensland with unmet housing needs. This includes 100,000 households who would typically be eligible for social housing. These households are either experiencing homelessness, or are low-income households in private rentals, paying more than 30% of household income in rent.

The figure is more than twice the official indicator of 47,306 households on the Queensland social housing waiting list. The latter has grown by 70% over the past three years.

Un-met housing needs are highest in satellite cities south of Brisbane. Pawson’s study shows that 10% of all households in Logan, Beaudesert and Gold Coast are homeless or living in unaffordable housing.

Professor Pawson said Queensland would need 11,000 affordable and social homes each year for the next 20 years, about 2,700 of which would need to be social housing.

He told the ABC the government had promised to build 13,000 social and affordable homes by 2027. But the QCOSS report found that the number of people with “very high need” for social housing was 37% higher than the system could accommodate.

In the decade leading up to 2017, there was “minimal” investment by State and Federal governments in affordable and social housing, Professor Pawson said.

“Unless they can get a grip on the situation, it’s a problem that over the next generation will continue to become more stressed and more pressurised.”

Much of the blame for the current problem is laid at the feet of private landlords. Private rentals in Queensland have risen as much as 33% since 2020. The sharpest increases, however, have been in regional markets. For example, over the past five years median rents rose by 80% per cent in the industrial town of Gladstone, by 51% in the tourist town of Noosa and 33% in the Gold Coast area. Nearly 60% of low-income households in the private rental market are facing unaffordable housing costs, with 15% in extreme housing affordability stress (rent accounting for more than half of total income).

While rentals have risen steeply, the bigger problem is a lack of rental accommodation. Rental vacancies are close to zero not only in Brisbane and the Gold Coast but also in regional towns.

The report states: “Queensland’s private rental housing has seen several years of declining vacancy levels and rent inflation rates far above the national norm. More generally, the sector remains entirely dominated by small-scale investor landlords whose usual prioritisation of capital growth over rental revenue inherently compromises tenant security.”
The upshot of this is that landlords are selling on the rising market, resulting in fewer houses for rental. Coupled with this is the inadequacy of tenant rights on rents, security and conditions. The Queensland Government enacted significant rental regulation reforms in 2022, but these fell far short of the changes advocated by tenants’ rights campaigners.

The Productivity Commission reported last year on the National Housing and Homelessness Agreement framed by the Albanese Government.

The agreement provides $1.6 billion a year in federal funding to the States and Territories, with the aim of improving access to affordable and secure housing.

However, the Commission judged the programme ineffective and in need of a major shake-up. With rents rising and vacancies falling, low-income private renters are spending more on housing than they used to. One in four households have less than $36 a day left for other essentials, the Commission said.

For those who might argue against more investment in social housing, there are success stories. The Queensland Government has funded a small number of permanent supportive housing (PSH) tenancies for people who have experienced long-term homelessness. PSH combines subsidised long-term housing with access to intensive but voluntary support services. One PSH programme, Brisbane Common Ground (BCG), established in 2012, is a 146-unit apartment block with 24/7 on-site support. Studies reported high tenancy sustainment rates and tenant satisfaction levels. It also produced significant savings via reduced use of emergency services and crisis accommodation. (QCOSS Report).

Despite the success of projects like BCG, there are many examples of State governments backing away from the commitment to social housing. For example, the New South Wales government is reportedly preparing to sell its Waterloo social housing complex in Sydney. The ABC reported that Waterloo Estate, the biggest social housing estate in Australia, houses almost 2,500 people.

The 18ha site will be redeveloped under a NSW government strategy called Communities Plus, where public land is offered to developers on the proviso 30% of what they build is dedicated social housing. This is clearly a retrograde move away from a project that is 100% dedicated to social housing. Meanwhile, more than 51,000 hard-pressed households are waiting for a home in NSW.

In an even more backward step, Darwin’s local Council has reportedly been issuing $162 fines to ‘rough sleepers’. The latter may or may not be indigenous people known as ‘longgrassers.’ (see link below)

Darwin Council issued a statement saying it had been subject to significant pressure from some current Northern Territory government MLAs. The MPs wanted to increase the number of infringements (and the size of fines), issued to vulnerable people who are sleeping rough in public places. (And what happens when these people cannot pay the fines? Imprisonment for non-payment? I guess that’s one way of getting people off the streets..Ed)

In its defence Council said council rangers issued fines as a “last resort”.

“We do not consider the fining of vulnerable people the solution to complex issues such as homelessness.”

More reading

https://www.theguardian.com/australia-news/2022/jul/12/queenslanders-miss-out-on-social-housing-due-to-failures-to-build-homes-and-inaccurate-waiting-lists

https://www.drbilldayanthropologist.com/resources/Longgrass%20people%20of%20Darwin%202012.pdf

Squeezed between inflation and interest rates

inflation-interest-rates — The Australian cash rate since 1998 (Reserve Bank of Australia chart)

I just happened to be reading a novel set in the Edwardian era at the same time as the media was going bonkers (again) about the Reserve Bank raising interest rates by 0.25% to 3.6%. In Louis de Bernieres’s* book, The Dust That Falls from Dreams, one of the characters is holding forth about the sudden rise in the bank rate and subsequent collapse of the share market in 1914.

Hamilton McCosh, a daring entrepreneur and investor, is at first delighted when the bank rate goes to 4% because he has ‘a few bob invested here and there’. Then the rate doubles to 8% and quickly rises to 10%.

“Just as I was gleefully rubbing my hands the blighters closed the Stock Exchange”, he tells his pals at the Atheneum, a gentlemen’s club.

This is late July 1914, you gather, a few weeks before World War I broke out. McCosh didn’t know then that the stock market would stay closed for five months. Rather than cause inflation, this financial crisis functioned like the ultimate credit squeeze. Inflation stayed low, well at least until 1915, when it rose rapidly to 12% then to 25% in 1917.

In the pre-war period, De Bernieres’s McCosh is aghast – you can’t get credit anywhere and there’s a rout on the stock market. “What’s Serbia got to do with us?” he complains.

In 2023 you could insert “Ukraine’“and immediately realise that we have seen cycles like this before. In times of war, the supply of money is tested, oil is expensive and hard to source, there is much unemployment, securities can’t be sold and supplies of necessities are dwindling.

The 1914 financial crisis in the City was a liquidity crisis of massive proportion, the likes of which was not seen again until 2007/2008. Amidst much intervention by the government and the Bank of England, the day was ultimately saved.

In De Bernieres’s novel, McCosh regroups and singles out two stocks he thinks will do well – Malacca Rubber and Shell Oil (as he calculates where money will be spent in the war effort).

Self-interest and venality arises quickly whenever a country’s financial welfare is threatened. Survival of the shiftiest is the order of the day.

At this point in time, many of Australia’s mortgage holders must be in a state of anxiety as yet again the goal posts are moved.

Not that the RBA had any option. Monetary policy is under pressure from forces beyond the Reserve Bank’s control. We are not the only country where inflation and interest rates have risen sharply. You can chart the increases in Australia back to the onset of a pandemic in March 2020, then steeply rising since Russia’s invasion of Ukraine, in February 2022.

The impact of Covid is what initially sent the cost of living index soaring. From March 2020, when it was 2.2%. Inflation rose steadily through the Covid years, driven up by stock shortages, the impact of bushfires and floods on production, disruptions to supply chains and the ever-rising cost of fuel.

Inflation reached 7.3% in the September quarter of 2022, about six months after Russia invaded Ukraine. The RBA now thinks inflation may have peaked (at 7.8% in December 2022). But as ABC business reporter Peter Ryan observed, the March quarter figure will be the one to clarify matters when released on April 23. Wherever it rests, Australia’s inflation rate is a long way north of the 2%-3% range promised in 2019.

When inflation rises, central banks almost always use monetary policy to beat it into submission. This week’s interest rate rise – the 10^th in a row, takes the official cash rate to 3.6%.

As Peter Martin observed in a timely piece for The Conversation, Tuesday’s interest rate hike was the culmination of a process that has added $1,080 to the monthly cost of payments on a $600,000 variable mortgage.

Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University, calculated this increase ($12,960 per year) by comparing payments on the National Australia Bank’s base variable mortgage rate before the Reserve Bank started its series of hikes in May 2022.

Before the Reserve Bank began raising the cash rate, the base variable rate was 2.19%. It’s about to be 5.49%, pushing up the monthly payment on a $600,000 mortgage from $2,600 to $3,680.

The Reserve Bank acknowledges it is a “painful squeeze”, but hints it might not need to squeeze much harder.

There’s more pain across the ditch. NZStats revealed that the annual inflation rate for 2022 reached 7.2%. Housing and household utilities was the largest contributor to the annual inflation rate. This was due to a 14% hike in the cost of building a house and rentals also rose.

As if to demonstrate its independence from the government of the day, New Zealand’s Reserve Bank pretty much ignored the impact of Cyclone Gabrielle. While all around people were shovelling silt out of their houses, the RBNZ increased the cash rate from 4.25% to 4.75% on February 22. This was a more dramatic increase than seen this week in Australia. But New Zealand is anxious to suppress the spiralling cost of housing. You’d think a country which is over-endowed with pine forests would have this covered, eh?

I guess the new UK prime minister will want to take credit for the drop in inflation recorded in January (8.8%) compared with 9.7% in December 2022. The Bank of England Governor has warned that it may need to raise rates again if inflation re-asserts itself. After 10 successive increases since December 2021, the official rate is at 4%. Meanwhile in the US, the Federal Reserve is flagging higher and faster rates rises (4.75% in February), despite inflation dropping below 7%.

Why does all this matter and who does it matter to? If you are young, working and buying your own home, yet another 0.25% increase in the cash rate wrecks your household budget. Those who borrowed their deposit (from the Bank of Mum and Dad) will be desperate for another pay rise, as inflation eats into the recent 4.5% increase in wages.

As The Guardian reported just last month, almost 25% of borrowers were at risk of mortgage stress as of December 2022. Another 800,000 borrowers face higher repayments as fixed loans end later this year and revert to the variable rate.

Tim Lawless, research director at CoreLogic, says the clear reason for mortgage stress is that interest rates increased faster and earlier than anyone was thinking. (Whatever happened to the notion of buying a modest first home then upgrading as finances permit?Ed.)

“We are expecting that the rate of mortgage stress will push higher into 2023,” Lawless told The Guardian, “partly because of higher interest rates, but also because of the cost of living.”

Theo Chambers, chief executive of Shore Financial added: “People probably borrowed more than they could have today. With borrowing capacities down almost 35% from 12 months ago, these people wouldn’t get approved today.”

As for De Bernieres’s Hamilton McCosh, how is he supposed to earn a living in Edwardian Britain, he fumes, saddled with four children, a truculent wife and two mistresses current (one retired), all of whom have children to feed?

As the Norwegian playwright Henrik Ibsen once said, “Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt“.

*author of Captain Corellli’s Mandolin

JobSeeker and the $50 ‘bonus’

jobseeker-unemployment — Contrary to popular opinion, almost half the people in this study relied on NewStart (now JobSeeker) for less than a year. Graphic courtesy of Wes Mountain and The Conversation.

You know how it goes. You’ve finished ferrying 16 items down the checkout conveyor and the assistant says: $142.99 – cash or card?

“How do the poor people get by?” I ask of no-one in particular.

Later, I went to the butcher ($47) and the organic fruit and vegetable shop ($56), all up $245.

She Who Pays the Bills said: “But we only needed a few things”.

Now if we were on unemployment benefit, such profligacy would leave us with just $375 to cover the next 13 days (rent, bills, fuel and more groceries).

It is timely to write about the cost of living, and how the reality appears quite different to the official inflation rate (1.2% in December). The Federal Government’s superficially successful $100 billion wage subsidy programme (JobKeeper), ends on Monday. Businesses that claimed JobKeeper passed on the subsidy to people they employed, regardless of how turnover and profit was tracking through the year that the programme was in place.

The last day of March also signals an end to the scaled-down Covid-19 supplement paid through JobSeeker. In the first few months of its origins, JobSeeker initially doubled the benefits paid to unemployed people.

JobSeeker, which replaced NewStart and associated benefits from March 21, 2020, introduced three levels of supplements paid through the first year of the Corona virus. From April 27 2020 to September 25, recipients were paid $550 extra a fortnight. This was then reduced to $250 extra per fortnight until December 31, 2020. The final supplement of $150 a fortnight was paid from January 1 until it ends next week.

Welfare groups had long lobbied the government to raise the unemployment payment beyond the poverty level.

The government made much of its decision to raise the rate paid to those on JobSeeker by $50 a fortnight ($3.57 per day).

As of next week, welfare recipients will have to learn to live without the additional $150 a fortnight – reverting to $620 a fortnight, excluding other payments like rental assistance*.

Economist Ross Garnaut’s latest book proposes that successive Federal governments, in cahoots with the Reserve Bank, have deliberately kept unemployment high since the mid-1980s. He writes that governments have ‘allowed’’ hundreds of thousands to languish in unemployment as a means of pursuing a policy to suppress wage growth and inflation.

Garnaut says this deliberate policy has ‘immiserated’ people.

He told ABC business reporter Gareth Hutchens that Australia should use its many resources to push the unemployment rate down to 3.5% by 2025. You may not remember, but unemployment was at this level or lower for decades between 1950 and 1975. This was an era when many Australians had permanent jobs in factories that made things.

Garnaut says the government and Reserve Bank have to stop guessing the level of ‘full employment’ (at which point the RBA starts lifting interest rates, as a means of combating inflation).

He says the budget deficits needed to sustain full employment should be funded directly or indirectly by the Reserve Bank. It is complex, but if you are interested, read more here.

The Conversation’s in-depth study of unemployment benefits busts a few myths. Research by a team drawn from the Brotherhood of St Lawrence, RMIT and ANU studied benefit payments between 2001 and 2016.

The premise of the report is that Australians receiving unemployment payments are often portrayed as “a relatively small group of people with personal or behavioural problems that stop them from getting a job.”

The research was conducted to challenge long-held perceptions of ‘us and them’.

One of the most startling conclusions clarifies myths about the long-term unemployed. The research found that nearly half of the Newstart population of 4.4 million (47%) received the payment for less than a year. Over two-thirds (68%), received it for less than two years. The study uncovered a concerning trend in the number of welfare payments suspended for not reporting income correctly or not meeting job-seeking targets.

“Our study found rates of suspension increased dramatically over the study period, from 2% in 2001 to 11% to 2016.

“Successive governments have increasingly sought to enforce this, leading to more uncertainty around the payment”.

So, while the unemployed go forward living on a minimum $44 a day, how will things go with the end of JobKeeper, the flawed business subsidy scheme which kept 3.5 million people off the dole queue?

As business editor Ian Verrender noted in an analysis for the ABC, JobKeeper turned into a profit mill for businesses that boomed during the lockdown. Billions of taxpayers’ dollars were paid to wealthy businesses, without the mutual obligations associated with welfare. The only reason we know about this at all is the corporate regulator’s belated decision to force listed companies to disclose their taxpayer handouts in the December half corporate results.

Verrender, an investigative scribe, laments the lack of a public register of JobKeeper recipients – “despite the scheme being among the most ambitious (of its kind) in the world”.

But it is not just the blue chip public companies that scored a windfall; tens of thousands of private partnerships, sole traders, charities and small to medium-sized businesses also prospered.

Many of the heads of Australia’s biggest businesses feature in the timely release of the Top 250 Rich List by the Weekend Australian. I say timely because it suits my purposes to mock the rich. What else can you do when the 250 individuals named in this list are collectively worth (in monetary terms- Ed.) $470 billion. As former journalist union chief Christopher Warren wrote in Crikey – that is equivalent to 25% of Australia’s GDP. Even the lower echelons on this list have a net worth of $450 million or more – $449 million more than the collective net worth of your average self-funded retiree couple..

Wish, the glossy magazine lift-out supported by full-page ads by Mercedes Benz, Cartier, Giorgio Armani and the like, is a supreme example of what The Australian calls ‘aspirational’ journalism.

For those on JobSeeker who aspire to getting best value from that extra $50 per fortnight, here’s a slow cooker recipe for lamb forequarters (large chops that are too tough for the barbeque). You can probably score a kilo for $15 or so. Buy 1.5 kilos each of onion, carrots, potatoes and the cheapest green vegetable (about $10 all up). Add a can of red kidney beans ($1.67) to flesh it out and cook the lot in a slow cooker while you are out applying for one of the 15 jobs a month needed to justify your welfare payment.

If you chucked in the right combo of herbs and garlic and made a gravy worthy of ‘Sir’ Paul (Kelly), the lamb will just fall off the bone and you’ll be eating this for days.

Buy an $8 bottle of red while you still can (he said, one eye on the coming of the cashless welfare card). Invite someone over (‘a loaf of bread would be great, thanks’).

Enjoy every casserole.