The Lucky Country isn’t what most think – A look back in history on how we are destroying our own luck
Manage episode 233983780 series 2148531
Welcome to Finance and Fury, the Furious Friday edition
A reminder of how lucky we are and why we are called the lucky country. Also, what we have to lose if we neglect to remember thisSome perspective:
- You don’t know what you have until you have lost it
- Taking things for granted like our power, because blackouts suck
- What about the billions of people who don’t have power or deal with rolling blackouts daily?
- Who would value having power more?
- The hatred of the rich shows the lack of gratitude by those who do it
- Countries with the highest number of millionaires/billionaires per capita have the highest GDP per capita and quality of life
- They are wealthy (some exceptions) because they provide more value to our lives
- We are lucky to have “rich people
- First used in 1964 by Donald Horne – The Lucky Country
- The origin of the phrase was negative in the context of the book
- “Australia is a lucky country run by second rate people who share its luck”
- Few places on earth better suited for middle-class prosperity than Australia
- British convicts and free settlers – first government in 1788 were autocratically governed by a British Governor (mini-dictatorship)
- Considerable unhappiness with the way some colonies were run
- The monopoly of Rum used as currency and Australia has a history of a beer economy
- English common law was introduced, the rights of Magna Carta and the Bill of Rights 1689 were introduced.
- The number of settlers increased and they were given resources and land from the government. Convicts were used as Laborers
- Land assigned back then as “Liberty Plains” is now Homebush and Strathfield in Sydney
- Then had the gold rush and entrepreneurs came flocking in
- Given the freedom and vast resource-rich country Australia is, it provides an ideal environment for upward mobility
- From the pioneering ranches of the nineteenth century to the middle-class suburbs of the late twentieth
Has our luck actually changed?
- Or did we change our luck?
- Became a socially divided society like most first world countries
- The political influence will either make it or break it
- Bob Hawke – Legendary figure for Labour, 1983 – 1991. Did you know the Hawke Government implemented financial deregulation and reform?
- Australian dollar float, dismantled the tariff system, privatized state sector industries, ended the subsidisation of loss-making industries and introduced full dividend imputation.
- Did also have some popular ALP policies, with tax system reforms and introduction of Fringe benefits tax as well as capital gains tax
- He would be considered moderate these days, if not closer to the LNP
- A political party for the working class is now dominated by those operating outside the tangible economy
- Some people are focused on achieving one thing and will do whatever it takes to do it
- Pushing for climate change mitigation programs will further deindustrialise Australia
- What about all of the people who will lose their jobs? Or those in other countries that rely on our Coal for energy?
- Gradual deindistrialisation stems directly from policies imposed by local governments in NSW, VIC, and QLD
- Sydney’s manufacturing employment is down 50% in the last 2 decades
- Politics was slowly transformed into an instrument of the bureaucracy and “progressive” gentry
- Why are the yellow vests protesting?
- We are sabotaging our economy, dependent on resources sales to China
- Our commitment to renewable energy dwarfs EU, US, and China. Per capita, we have 5 times the number of renewables
- Our energy costs are now among the highest in the world
- ALP want to boost renewables from 20% to 50% in 2030 and the Greens want 100%
- Ironically just as Australia is to replace Qatar as the world’s largest producer of natural gas, industrial enterprises in Australia are under pressure from high energy prices
- Imports are replacing the closing Australian producers
- With more taxes, energy prices, fuel, and super payments, there is less disposable income to you
- OECD households were considered middle class, but this has dropped 1% per decade since the 1980s and now ranks below the OECD average
How policy affects our market?
- How our luck may have run out?
- Decline in Australia’s middle class resulting in the regulation of land and expenditure to promote urban density
- 1981 to 2016 - property-ownership rates fell from 60% to 45% for 25 - 34-year-olds
- UK has only 6% of the land urbanised
- US has 3% and Canada has 2.1% urbanised
- 3% of Australia is urbanised
- Major cities in the first world have a “smart growth” model
- Helping turn once affordable cities into some of the world’s costliest
- According to the RBA, planning regulations are a major addition to this cost
- Inner core of Brisbane, Sydney, and Melbourne represents 11%, 7% and 13% of the greater metro population (31%)
- More than four-fifths of families living in single-family homes in suburban areas
- Market manipulation can leave limited choices
- Not enough supply to keep up with the demand adds to increased prices
- Projections show 50% of Sydney’s dwellings will be apartments by 2050
- 40% of Sydney 35-49 year old’s live in townhomes or apartments, which is double the rest of Australia
- This is a market-distorting approach that doesn’t let supply free and restricts demand choices
- The threat of a financial meltdown as urban-core property prices decline is real
This process is not unstoppable:
- The issues reflect policy decisions and not our economic or social fundamentals
- Unless something changes, we may have a bleak future
- Urged to settle where supply is allowed, making it unaffordable and congested
- An ever-increasing demand for government revenues
- With a little direction, this can be undone which is what will be tackled in next Friday’s episode
Be honest about what got us into this problem:
- We are a lucky country, but luck can run out when you take it for granted
- Next episode will talk about some cautionary tales
Thanks for listening, if you want to get in contact you can do so here.
Also, I am doing the St Vinnies CEO sleepout in June. If you could help support that would be greatly appreciated.