Poverty Archives - thegoodwills.com

Bare bones budget for jobseekers

Just as well the Commonwealth Government Budget wasn’t tabled last week – that would have been too much of a mixed message.

A nation’s budget is all about redistribution of wealth, a concept worth keeping in mind at a time when £100 million of British taxpayers’ money was spent on an unnecessary coronation pageant.

As has been repeatedly pointed out, Prince Charles became King by default on September 8, 2022, on the death of his mother, Queen Elizabeth II. There was no pressing reason to stage a mediaeval pageant, however splendidly well done.

This week, the media’s attention swung back to the King’s southern hemisphere colony, as Treasurer Jim Chalmer presented his budget.

So much had been flagged already that one does have to question is there a critical reason for the media embargo till 7.30pm on Tuesday.

As I started writing this on Tuesday morning, much of the Budget’s headline measures had already been revealed. This included a $15 billion spend on cost-of-living relief; $1.5 billion of it in electricity bill relief for 5.5 million households and 1 million small businesses. I should point out that this is from an ABC article published on Tuesday morning. The ABC’s business reporters Ian Verrender and Gareth Hutchens were all over it.

One of the other measures flagged earlier aimed to change the dispensing rules at pharmacies. Australians will be able to buy two months’ worth of medicines on a single prescription, with the change affecting more than 300 common medicines. This overrides the current rule that only 30 days’ supply of medicine can be applied to one prescription.

The ABC and other media outlets also seemed confident, ahead of the Budget, that Chalmers would produce a surplus and indeed he did. You can’t please everyone, though. Greens leader Adam Bandt said the government had prioritised delivering a ($4.5 billion) surplus over supporting people in poverty.

“Labor’s second budget is a betrayal of people who were promised that no one would be left behind,” he said in a tweet on social media.

Other leaked or pre-announced budget measures included cheaper child care and a (long overdue) pay rise for aged care workers. Welfare recipients received higher payments, but nowhere near the level asked for by lobbyists.

The Budget is a document which sets out how taxes paid by Australian businesses and individuals will be spent. It is a massive number, equating to 29% of GDP. In 2021-2022, $683 billion was raised in taxes across all levels of government. This was 15.2% higher than the previous year. A table prepared by the Australian Bureau of Statistics shows an upward trajectory for taxation revenue. The slight blip in 2019-2020 was due to disruption to employment by the onset of Covid-19 and its attendant lockdowns. Total tax revenue includes all Commonwealth, State and Territory taxes, GST, those indirect taxes that still exist and excises imposed on alcohol, tobacco and fuel.

The cost-of-living package is one thing, but the government has been under enormous pressure to raise the level of unemployment benefit. The Australian Council of Social Service (ACOSS) last month presented a detailed brief to Treasurer Jim Chalmers. A former Commonwealth Treasury head, Ken Henry, appeared on television as the ACOSS brief’s anointed spokesman. In a call to raise the level of NewStart and Youth Allowance, ACOSS said some 750,000 people in communities across Australia live on unemployment and student payments that do not cover the cost of housing, food, transport and healthcare.

The single rate of Newstart is (or was) less than $40 per day and living on Newstart and Youth Allowance presents the biggest risk to living in poverty. ACOSS wanted the rate raised to within 90% of the aged pension, so were almost certain to be disappointed.

In an open letter to the Prime Minister, ACOSS said 80% of people receiving JobSeeker payments have been receiving the benefit for more than 12 months. The same research found that seven in ten people on income support were eating less or reporting difficulty getting medicine or care. In December 2022, Anglicare found that there were 15 Jobseekers competing for each entry-level role.

“The longer people remain on income support, the harder it is to transition back into paid work,” the letter said.

ACOSS chief executive officer, Dr Cassandra Goldie, said post-Budget that while the $20 per week pay rise was welcome, it did not go far enough.

“The (increase) to JobSeeker and related payments is well below the Economic Inclusion Advisory Committee’s findings. The committee said that it needs to rise by at least $128 a week to ensure people can cover the basics.”

ACOSS and others are right to complain. Australia has the lowest rate of unemployment payment in the OECD. One in four people on Newstart have only a partial capacity to work because of illness or disability.

The ABC’s business reporter Gareth Hutchens wrote an intriguing analysis in May 2021 about the ‘full employment’ policies of governments prior to the 1970s. Then followed a policy aimed at creating a permanent pool of unemployed as a means of promoting economic growth and making Australia more globally competitive. Along with rising unemployment came a political ploy to blame the victim. The term ‘dole bludger’ emerged, first used by Liberal MP Bert Kelly, a pioneer of “New Right” political ideas. But the phrase was also promoted by Clyde Cameron, minister for labour in Gough Whitlam’s Labor government (1972-1975).

As unemployment soared in the mid-1970s, being without a job was recast as the fault of workers for being ‘too lazy’. There was much debate about the need for ‘overly generous’ income support. (Anyone who has ever been on it would dispute its ‘overgenerosity’. Ed)

Policymakers from the early 1980s started using an unemployment rate of 5% as a deliberate policy tool.

“How could everyone be expected to find a job,” Hutchens wrote. “There haven’t been enough jobs to go around, by design.”

Now, almost 50 years later, the long-term unemployed are still being victimised over a deliberate policy to keep them out of work.

If I may hark back to a FOMM from 2018 when we speculated about what one could do were one made King for a Day:

King Bob decreed: “I’d single out the dysfunctional tax and welfare systems and propose the following reforms:

Introduction of a universal basic income for all adults: $25k a year, indexed, no strings attached. Adults are free to earn money over and above the $25k but will be taxed on a sliding scale to the maximum rate for anyone earning more than, say, $100k.

In my Kingdom, all forms of social welfare would be replaced by a new regime, overseen by the Office of Financial and Social Opportunity and Incentivisation (NOOFASOI). The office would oversee payment of the UBI and iron out the inevitable wrinkles in a new and untested system.”

In the real world, countries as diverse as Finland, France, Ireland, Norway, the US, Canada, New Zealand, Holland, Iceland, India and Brazil are either talking about a UBI or trialling it in one form or another. In 2016, the Parliament of Australia published this comprehensive yet concise policy paper by Don Henry, for those who want to find out more.

While I leave you to make of that what you will, I’ll be delving into the 997-page Budget, seeing what’s in it for me. As we all do.

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).

Homeless people sleeping in their cars

homeless-sleeping-cars — Image: Lucas Favre, www.unsplash.com

Today’s headline about homeless people could well be an urban myth; that is, a story people tell each other, swearing that it’s true. The housing crisis in Australia – a combination of unaffordable housing and scarce rental properties – is forcing people to live in their cars. I’ve done a bit of fact checking on this, but hang around while I relate this story from Tasmania.

We’d stopped at Scottsdale, a high country town in Tasmania’s north-east. We’d chosen the town’s free camp, which provided toilets and showers (the latter powered by three one-dollar coins). We were settling in for the evening when it became obvious that the older woman next to us was preparing to spend the night alone in her small Japanese car. The overnight forecast was a minimum of 7 degrees. She’d hung towels in the side windows and fixed a screen over the windshield. She seemed to be withdrawn, so we respected her unspoken need for privacy. But as far as I could tell (being next door and all), she went to bed as soon as it got dark. I decided my penance for not engaging in conversation was to make her a coffee in the morning. But when I arose (at 7.30am), she had gone.

It’s not illegal to sleep in your car in Tasmania – I looked it up. In theory if you are homeless, you could free camp your way around Tassie and nobody would hassle you. Some free camps allow you to stay for up to a month. But it does get cold from April to November, and rough campers would have to travel to town to find a public shower.

In Queensland, it’s illegal to sleep in your car unless you are parked in somebody’s driveway (with their permission). In which case you’d probably be inside, on the couch with the dog. There are similarly tough rules in the Northern Territory.

As blogger Tim Beau Bennett discovered, many local governments have specific by-laws vetoing this practice, so it would pay to check.

The biggest problem with assessing the level of homelessness in Australia is that the most reliable data (the Census) only comes out every five years. It could well be Spring before we see the first results of the 2021 Census. We therefore rely on data that is six years out of date (116,471 in 2016). But what’s been going on in the interim?

Recent reports show that up to 44,000 women of all ages are vulnerable to homelessness, with domestic violence being a key risk. Homelessness Australia (the National peak body for homelessness in Australia) released an analysis of housing data from the Australian Institute of Health and Welfare that showed that 1,600 women over 50 sought help from homelessness services in 2016. These women were either ‘couch surfing’ – that is, staying temporarily with friends or family members, or sleeping in their cars. The numbers had increased 75% and 81% respectively between 2012 and 2016.

Homelessness Australia launched a campaign in March this year calling for $7.6 billion to be allocated to long-term housing for women over the next four years.

The research identified a shortfall of 16,810 homes, the building of which would provide economic benefits of $15.3 billion and create 47,000 jobs across the economy.

The 2019-2020 research report Nowhere to Go, prepared by Equity Economics, showed that 9,120 women are becoming homeless every year. Women who had experienced family and domestic violence were the biggest client group seeking assistance. In 2019-20, 119,200 clients, or 41% of all such clients, sought assistance while experiencing domestic and family violence. More than half (55.8%) required accommodation. Alarmingly, the data also revealed that 7,690 women go back to abusive relationships, out of necessity.

It is perhaps illuminating to discover that Homelessness Australia was funded by the Federal Government until December 2014. Since then, it has been staffed by volunteers and has no paid staff.

As we mark the eighth birthday of Friday on My Mind, those of you who have hung in for a long time would know I often write about this topic. Australia has had a steadily increasing homelessness problem since 2011. The elevation of housing from a place to live and grow a family to a wealth-generating asset is the key issue.

An Australian Housing and Urban Research Institute (AHURI) investigation from November last year found that up to two million renters aged 15 or over are at risk of homelessness. AHURI’s brief to researchers was to identify those at risk of homelessness in smaller regional centres.

The resulting paper shows just how close so many people are to becoming homeless, primarily because of rental increases and ever-tightening rental vacancies.

All it would take is one life crisis – a relationship breakup, a serious illness or losing work due to economic circumstances, the authors concluded. Many people found out at the peak of the COVID-19 pandemic how circumstances can quickly change.

The survey was commissioned by AHURI from researchers from Swinburne University of Technology, University of Tasmania and Launch Housing. The task was to estimate rates of people at risk of homelessness for small areas (with a population ranging from 3,000 to 25,000).

Those interviewed were considered at-risk of homelessness if residing in rental housing and experiencing at least two of the following:

low-income;

vulnerability to discrimination;

low social resources and supports;

needing support to access or maintain a living situation;

a tight housing market.

The AHURI study is an important one at this fragile stage of the electoral cycle. It bridges the gap between what we officially know about the homeless and the ‘hidden homeless’ – those who are couch surfing, sleeping in their cars, house-sitting or doing the slow lap of Australia.

Even if you have a job, the next challenge is to find a rental property. This week our local paper, The Daily Journal, carried a report that the Southern Downs region has the lowest rental vacancy rate in Queensland (0.1%). The figure, a 10-year low, comes from a Real Estate Institute of Queensland survey of 50 local government areas.

While rentals in the Southern Downs are cheap compared to metropolitan cities (advertised weekly rentals start at $210 for a one-bedroom unit, to a three bedroom house in Warwick ($600). I am assured on at least an anecdotal level that the scenario is being replicated all over Australia.

The Federal Government’s main response to this shameful crisis was the National Housing and Homelessness Agreement (NHHA). The scheme started on July 1, 2018 and provides around $1.6 billion each year to States and Territories.

The NHHA included $129 million a year for homelessness services. States and Territories must match the sum applied for when claiming this money.

The NHHA identifies ‘priority cohorts’, which is public service jargon for people most in need of a roof over their heads. (Dehumanising language is but one of the many issues when considering homelessness. They are not ‘cohorts’ – they are people. Harumph. Ed)

women and children affected by family and domestic violence,
children and young people,
Indigenous Australians,
people experiencing repeated homelessness,
people exiting from care or institutions into homelessness and
older people.

Yes, it’s a depressing topic, but better solutions and attitudes could be developed, starting by not demonising those who either can’t find work or can’t work. Then we need to stop stigmatising those who for whatever reason have nowhere else to go.

In Nomadland, Francis McDormand’s character Fern is asked: “My Mum says you’re homeless. Is that true? Fern: “No, I’m not homeless. I’m just houseless. Not the same thing, right?”

I’ll leave you with a ‘three chords and the truth’ country song, Somebody’s Daughter by Tenille Townes.

Affordable housing – a key election issue

affordable-housing-election — A roof over your head – image by Capri23 at Pixabay.com

Wherever you go in Australia to visit friends and family, the conversation very soon turns to the scarcity and high cost of rental housing. The topic will then quickly shift to the ever-rising cost of houses and why parents worry about their adult kids taking on seven-figure mortgages. As residential property analyst Michael Matusik recently said, it comes down to the Bank of Mum and Dad.

Few cities or towns have escaped the 20% rise in residential real estate prices (for the year to September) or the inevitable rental hikes that followed. Stories that circulate about landlords taking advantage and tenants deciding they’d be better off sleeping in their cars are not uncommon. Check in with any emergency housing agency and they will tell you things are as tough as they have ever been.

AMP Capital chief economist Shane Oliver says that while housing affordability has always been an issue in Australia, it has moved from a periodic cyclical concern to a chronic problem.

“The 20% rise in prices over the last year has put the spotlight on the issue again. With the surge in house prices since the 1990s has come a surge in debt which brings with it the risk of financial instability should something go wrong in the ability of borrowers to service that debt.”

Oliver said the gains have been driven by record low mortgage rates, buyer incentives, a tight jobs market, a desire for more home space as a result of the pandemic and working from home, numerous government home buyer incentives, the “fear of missing out” and lower than normal listings. This has pushed average prices to record highs and real house prices to 23% above their long-term trend.

Oliver says the average capital city dwelling price rose 200% over the past 20 years, compared to an 82% rise in wages. The disparity has become more telling in the last 10 years with dwelling prices increasing by 58% and wages rising by only 26%.

The popular wisdom, if your parents taught you such things, was to spend no more than a quarter of your gross household income on housing. Over the decades, this figure has risen to 33% and in the major cities has peaked at 50%.

As we are now in pre-election mode, it’s appropriate to mention the Affordable Housing Party, a single-issue party which is on a membership drive to avert the risk of de-registration. Led by Andrew Potts, the party had its first tilt at Federal politics in 2017, fielding a candidate in the Bennelong By-Election.

The party’s policies include phasing out negative gearing, ending the capital gains discount on investment properties, stopping foreign investment in Australian property, taxing investment properties which are left empty and cracking down on full-time AirBnB operators.

Radical? Yes, but the problem needs some radical thinking before we end up with 200,000 people couch surfing and sleeping in their cars.

The AHP’s research on the housing sector focuses on negative gearing, which means the cost of owning an asset exceeds profits, resulting in investors claiming this loss to reduce other taxable income.

As the research suggests, one ought not to expect the Federal Government (or any government), to shut the scheme down. As of April 2017, Federal MPs and Senators owned a total of 289 investment properties.

This could be a good time to bust a few myths about negative gearing, Tax Office statistics from 2017 show that 64% of the 2.2 million people who own investment housing have an annual income of less than $80,000. This seems to scuttle the argument that only the wealthy benefit from investment housing. Less than 10% of Australia’s 2.2 million property investors earn more than $180,000 a year. Likewise, 71% of investors own only one home, with 19% owning two and 10% owning three or more houses.

Labor Leader Anthony Albanese upset some of the affordable housing campaigners in July when he abandoned pledges to impose restrictions on negative gearing. The opposition went to the 2016 and 2019 elections promising to halve the 50% deduction on capital gains and limit negative gearing to new properties only.

National Shelter chief executive Adrian Pisarski said by ditching its commitment to reforming negative gearing, Labor had “abandoned” would-be home-owners and low-income households wanting to buy homes.

“It took 15 years of campaigning by many to get the ALP to find a spine on CGT and negative gearing and commit to helping reduce house price inflation,” Mr Pisarski told the SMH at the time. “This is a sad day for affordable housing.”

In May Mr Albanese launched the Opposition’s $10 billion Housing Australia Future Fund. The fund would build social and affordable housing and create thousands of jobs now and in the long term, he said.

Annual investment returns from the Housing Australia Future Fund will be transferred to the National Housing Finance and Investment Corporation (NHFIC) to pay for social and affordable housing projects.

Over the first five years, the investment returns would allow the building of 20,000 social housing properties, 4,000 of which would be allocated for women and children fleeing domestic and family violence and older women facing homelessness.

Residential property analyst Michael Matusik has a few ideas to fix housing affordability. He says part of the problem is the focus on new builds rather than the existing market.

Matusik-style reforms would include removing negative gearing (a policy set when interest rates were sky high) and charging stamp duties at a flat $2,000 per transaction.

Matusik suggests a 20% tax on all property transactions – including owner stock if sold within, say, three years. This would stop ‘flipping’ (buying a house, renovating it and selling again within a short period of time) which is a major driver of prices. The government should limit foreign buyers to new dwellings and they must also have a 50% Australian business partner who pays 20% tax. These new rules would also include measures to stop developers land-banking.

“If they don’t start building the project within five years, they lose development approval. After 10 years, if there is no action the site is sold underneath them. In short, you cannot buy a home (new or existing) unless you have an Australian passport and pay 20% tax. No Passport no buy.”

As for new housing, Matusik says all housing related incentives should be removed because they distort the housing/building cycle. He also suggests that greenfield developments be required to provide minimum levels of community infrastructure set as targets. No doubt he will extrapolate on these ideas in a future Matusik Missive.

More radical ideas from Gwyn Hooper, writing for a Byron Bay newspaper (the median house price in Byron is $2.8 million (units $1m):

Under Hooper’s affordable development plan, the Federal and State governments would provide finance and free land. Local Government’s role would be to manage the buildings and tenants and waive its usual development fees.

“The tenants would have a secure tenancy, pay an affordable rent (based on income), and would importantly be able to live and bring up their families without financial stress – an issue that can cause family breakdowns that only compound these issues.”

As these examples suggest, this issue needs to be de-politicised and brought out into the sunlight with an ‘open to new ideas’ sign attached.

Written in the comfort of my freehold home, ameliorating some of my baby boomer guilt, I think.

Last week: People who lived in the UK for more than six months between 1980 and 1996 are prohibited from donating blood because of Mad Cow disease.

When Aussie families lived in kerosene tin huts

This week we are leaving president-elect Joe Biden to struggle with his Disunited States, to reflect on a time in Australia’s history when homeless people were forced to build kerosene tin huts. This Depression-era story may also give us pause for contemplation as the year-long corona virus pandemic sends many nations into deep recession. No-one wants to use the D-word but also no-one can predict how long countries will have to deal with Covid lock-down periods.

As you may already know, if you also subscribe to our Goodwills Music page, we wrote a song about it. I had the idea couple of years ago when visiting Morven, in south-west Queensland. The show piece of the historical village there is a Depression-era kerosene tin hut. It was built by the late Bob Johnson, whose widow Ethel runs the village.

A sharp-witted reader wanted to know if I was ‘trumpeting’ the new song in last week’s piece about Nellie the Elephant and the price of democracy. I prefer to think of it as drollery (listing it as one of the news stories you may have missed because of the mass media preoccupation with the US election).

Sometimes I have an idea for a song and it loses momentum because I can’t match the lyric to a tune (or maybe I’d rather watch Grey’s Anatomy). Kerosene Tin Hut sat in the drawer for a year or so until She Who Now Also Writes Songs helped me stitch the lyrics together.

As you may gather, we were brought up by parents who lived through the Great Depression (and WWII). They were frugal, good at recycling before it was a thing and were fond of sayings like “never a borrower or a lender be”. Goods could be bought on lay-by, but never on ‘tick’.

That generation was good at saving to buy a particular item deemed necessary for a family – like a fridge, or a washing machine (once the copper and the mangle went to historical villages). I remember once complaining about not having a wardrobe in my bedroom. Dad brought home three wooden butter boxes from the bakery. He stacked them one on top of the other and Mum made a curtain to hang on the front. This is where I stashed my Famous Five collection (I’d grown out of them), and recently collected Mad magazines.

People who battled through the Great Depression (1929-1939), became adept at “making a muckle out of a mickle” as Mum and Dad would say.

Not much has been written about that period in Australia when shanty towns were developed on common land, usually on the outskirts of towns and cities. This happened as unemployed families were either evicted from rented dwellings or worse, lost the homes they were struggling to buy. Small communities formed on Crown land, where the inhabitants did not have to pay rent or rates. They erected corrugated tin huts or, more commonly, kerosene tin huts.

Maleny reader Mike Foale remembers the kerosene tin era, but for different reasons. He contacted me after I’d sent the new song around to a mailing list.

Like others, he asked the obvious question – where did the kerosene tins come from? Kerosene was widely used in the 1920s for cooking, lighting and refrigeration, but also provided cheap fuel for tractors.

Mike recalled from his days growing up on a farm in the Mallee that the early tractors of the 1920s to the 1950s ran on kerosene, as did other stationary engines used on farms.

“Kero was imported in four gallon (20 litre) square-top tins, with a box around the tin for travel security.

“On our farm, the boxes were converted into shelf units. Dad had to sell the early tractor off (a Caterpillar) for lack of maintenance services in the Mallee. So I grew up in the 1940s with draft horses doing the farm work, but the shed was full of empty kero tins.”

Kerosene tins were popular in Tin Town because they could be cut into square tiles with tin snips then stapled together over a bush timber framework.

Western Plains Cultural Centre local activities officer Simone Taylor has researched the ‘Tin Town’ which existed in Dubbo, NSW. The town formed in the late 1920s during the onset of the Great Depression and disappeared 20 years later. Ms Taylor told the ABC in 2018 there was a a lot of stigma attached to ‘Tin Town’.

“The shanty’s residents were pitied by the people of Dubbo. I think the people in Tin Town were getting on the best they could, but in newspaper reports it’s clear the town was seen as a social issue to solve.”

Tin Town survivors recall the hardships – there was no electricity and only a single community tap to access water. Council collected rubbish and sewage every week for a small fee.

In Dubbo, as in other locations where Tin Towns evolved, kerosene tin huts were erected on Crown land. They did not appear on official maps, so historians rely upon people’s memories and references in old newspaper articles.

Australian National University historian Joan Beaumont told the ABC that Australia was one of the countries worst hit by the 1920s crash. Communities that relied on wool and wheat exports suffered the most as global demand fell away. While the evidence suggests that Tin Towns housed families and pensioners, Professor Beaumont said single men without strong family connections were more likely to live in tin shanties.

Why is this relevant today, you might ask, when our wealthy are uber-wealthy, well-educated professionals are doing well (in two-income households) and the middle classes are, well, in the middle?

The massive disruption to the orthodox economy caused by Covid-19 has forced even conservative governments to use Keynesian economics to manage the crisis. The theory evolved by John Maynard Keynes advocates increased government expenditure and lower taxes to stimulate demand. This, rather than monetary economics (controlling the supply of money), is more likely to help avert a global depression.

There is a domino effect when people who depend on a wage to pay rent or service a mortgage, not to mention car loans, credit cards and ‘60 months nothing to pay’ consumer lures, lose their source of income.

The job goes, the search for work is fruitless, the bailiff comes calling. Suddenly, you are living in your car (the 21^st century version of the tin hut). Those of us with a proper roof over our heads ought to count our blessings – count twice when rain falls.

As this recent Sydney Morning Herald article informs, the early help offered to get homeless people off the street in 2020 is being wound back. While the official homelessness figure is north of 116,000, the Australian Homelessness Monitor found that 290,000 people sought homelessness services in the year before the pandemic.

Homelessness numbers fell between April and June this year as a result of Federal government assistance, a moratorium on evictions and a targeted campaign to get rough sleepers indoors. But the future is looking somewhat bleak as supports come to an end.

Telling people to stay home during a Covid spike is all well and good if you have a home in the first place. The alternative may well be descensus in cuniculi cavum (descent into the cave of the rabbit), or in 2020 vernacular, down the rabbit hole.

Housing affordability and the empty homes scandal

housing-affordability-empty-houses — Housing affordability in world capitals. Photo of Melbourne’s Southbank by Ashley Rambukwella flickr CC https://flic.kr/p/KfdUMR

The inspiration to start writing (again) about housing affordability came from left field. I was sitting back enjoying an American roots band, The Brothers Comatose, at the Blue Mountains Music Festival in Katoomba. Lead singer and front man Ben Morrison introduced the band, saying they were from San Francisco but maybe not for long. “The price of houses is crazy there (man) and most of the musicians I know are moving out because they can’t afford to live in the area.”

“Maybe we could move here,” he suggested, and the audience groaned, knowing that housing affordability is just as big a problem in Sydney and surrounds as in San Francisco, Vancouver, New York or Paris.

“Can we sleep on your couch?’’ he jested, before doing what musicians do to avoid thinking about the cost of living. Great band, by the way (check out this bluegrass old-style tune around one microphone).

Morrison’s complaint rang true – I did a modicum of housing affordability research which quickly showed that the median price of a house in San Francisco’s Bay area clipped $US1.5 million in the fourth quarter of 2017. The California Association of Realtors Housing Affordability Index shows that it would cost $US7, 580 a month to service the mortgage. The average monthly rent for a two-bedroom apartment is $US3, 441.

Housing affordability is a myth in Vancouver, Canada’s biggest West coast city. The 14^th annual Demographia affordability study ranked Vancouver the least affordable among 50 American and Canadian cities. Internationally, it is ranked the third least affordable city among 293 locations around the world (Sydney was 2^nd). The British Columbia Provincial Government has made several attempts to rein in the city’s galloping real estate prices, including a 15% tax on foreign nationals purchasing metropolitan real estate. Another new measure attempts to tackle a problem that plagues Sydney and Melbourne, Australia’s housing affordability problem cities.

The BC government conducted a survey which found that 8,481 houses in Vancouver were unoccupied during a six-month period. That’s 4.6% of the housing stock. Now the government is going to levy a tax on people who own houses and don’t occupy or rent them. The tax will be calculated at 1% of the assessed value. So the owner of a two-bedroom condo in Vancouver valued at $900,000 and deemed to be unoccupied will pay the BC government $9,000 a year.

Meanwhile, the housing boom in Vancouver is on the downturn, according to the Vancouver Courier, and they should know. Still, with a median house price around $3 million (Dec 2017) and condos going at $1 million apiece, it’s maybe time for that bubble to lose some air.

Meanwhile Down Under, house prices keep rising

Melbourne and Sydney made into Demographia’s top 10 list of the least affordable cities in the world. Sydney’s median house price of $1.11 million assured it of that invidious claim. Demographia ranks middle income affordability using a price-to-income ratio. Anything over 3 is rated unaffordable. On this basis, some of the world’s most affordable towns included Youngston, Ohio (1.9), Moncton, New Brunswick (2.1) and Limerick, Ireland (2.2). There are no affordable Australian cities on Demographia’s watch.

The least affordable city is Hong Kong (19.4) then a gap to Sydney (12.9) and Vancouver (12.6). Melbourne (9.9) is slightly more unaffordable than the aforementioned San Francisco (9.1).

Studies have shown that Melbourne is one of the big culprits in hiding empty houses among its residential property stock.

Australia’s 2016 Census showed that 11.2% of Australia’s housing stock was described as unoccupied on Census night. Empty property numbers were up 19% in Melbourne and 15% in Sydney compared with the 2011 Census. This growing anomaly is a global trend in the world’s biggest cities which have allowed rapid apartment developments.

Just why 1.089 million houses and units were unoccupied on Census night is hard to explain. But it probably suggests the owner/s were not in need of rental income and would rather keep the place in mothballs for use when the wealthy owners or friends and relatives visit (for the Australian Open, Melbourne Cup or the Grand Prix) or are relying on capital gain without the need to bother with tenants.

Hal Pawson of the University of NSW wrote in The Conversation that the spectre of unlit apartments in Melbourne’s night sky prompted the Victorian government to introduce an empty homes tax. Like Vancouver, this is levied at 1% of the property’s value. Similar taxes have been introduced in Paris and Ontario. Mr Pawson, Associate Director – City Futures – Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW, (try getting an acronym out of that. Ed.) says the Melbourne tax only applies to inner city and middle suburbs and, there are ‘curious’ exemptions for foreign nationals with under-used second homes.

The flaw in the scheme is that it relies on self-reporting. Pawson says the lack of reliable data on empty homes is a major problem in Australia.

Census figures substantially overstate the true number of long-term vacant habitable properties because they include temporarily empty dwellings (including second homes).

Prosper Australia uses Victorian water records to estimate that about half of Melbourne’s census-recorded vacant properties are long-term “speculative vacancies”. That’s 82,000 homes. A similar “conversion factor” to Sydney’s census numbers would indicate around 68,000 speculative vacancies.

Labor Opposition shadow Treasurer Chris Bowen has proposed a national tax on homes left empty for six months or more.

Pawson says these “cruel and immoral revelations” come at a time when 400 people sleep rough in Sydney every night and hundreds of thousands more face overcrowded homes or unaffordable rents.

He says Australia has a bigger problem in terms of under-utilised occupied housing. Australian Bureau of Statistics survey data shows that, across Australia, more than a million homes (mainly owner-occupied) have three or more spare (read unused) bedrooms. A comparison of the latest statistics (for 2013-14) with those for 2007-2008 suggests this body of “grossly under-utilised” properties grew by more than 250,000 in the last six years.

While authorities are grappling with the issue and how to perhaps tighten foreign ownership laws, the ANZ Bank did its own survey. Foreign buyers were playing an increasing role in spurring demand for new houses and apartments, it found. The ANZ analysed Reserve Bank data to conclude that in 2015-2016, foreign investors bought between 30,000 and 60,000 dwellings in Australia. This equates to 15% to 25% of all new dwellings, 80% of which were apartments, which can be bought ‘off-the-plan’.

There is good reason to suspect that the new apartment markets in Hong Kong, Vancouver, London, Paris and other desirable world capitals are underwritten to some extent by foreign nationals (including Australians).

The problem which could arise, say in the case of a global recession, is what happens in cities like Melbourne and Brisbane where foreign investors have bought up to 35% of new stock, if these owners are forced to sell.

Not to worry, most big box discount stores will give you a large cardboard box in which to live. The dumpster bins behind shopping centres have perfectly good food that’s just been chucked out because it has passed the use-by date.

Trust me.

FOMM back pages

Travel safe this weekend, people

King decrees universal basic income

king-basic-income — King decrees universal basic income Image by Jason Train, Flickr https://flic.kr/p/f1BBQu

The question for the week is, what, apart from introducing a universal basic income, would you do if you were King, President or Prime Minister for a day? The term ‘King for a Day,’ which has inspired more than a dozen pop songs and an obscure opera by Verdi, implies that for 24 hours you get to be loved by the masses. You can loll about in a high-backed chair, gold orb and sceptre in hand, and be fawned over – mint juleps and the like.

In the Silly Season, media outlets tend to ask people questions like this, for a news slot or an inconveniently empty news hole next to a couple of ads. The ABC North Queensland asked a bunch of 11-year-old kids and some senior citizens what they’d do if they were Prime Minister for the day. Some of the answers were predictable enough. Sophie, 11 said, “Give everyone a day off so adults can take their kids out (and make theme parks free).” James (10) said he’d employ more scientists so Australia can get its research skills up (reserve that kid a cabinet post, circa 2030). Keira (11) wanted more national parks; Charlotte (11) wanted a program for kids to do work experience and be taught something they want to do.

If I could be King for a Day, I’d single out the dysfunctional tax and welfare systems and propose the following reforms:

Introduction of a universal basic income for all adults: $25k a year, indexed, no strings attached. Adults are free to earn money over and above the $25k, but it will be taxed on a sliding scale to the maximum rate for anyone earning more than, say, $150k.

Hypothetically, a previously unemployed or under-employed couple could, with a tax-free household income of $50,000, find jobs, start a business, renovate the spare bedroom, and join Airbnb and ramp up their annual income in a myriad of ways. Their only duty would be to the Tax Office.

Treasury boffins would be responsible for reforming the tax system to ensure the universal basic income could be funded and that as few people as possible are disadvantaged. Treasury could find ways to encourage business to work with this new system, for example offering generous tax rebates for research and development.

This is not just a FOMM flight of fancy

Countries as diverse as Finland, France, Ireland, Norway, the US, Canada, New Zealand, Holland, Iceland, India and Brazil are either talking about universal basic income or trialling it in one form or another. Switzerland had a referendum, and while the people said no, it shows how front of mind this issue has become. Indeed, Australia has a university-sponsored programme to research income security.

And the Parliament of Australia published this comprehensive yet concise policy paper by Don Henry, for those who want to find out more.

The media went on a feeding frenzy recently after the end of the first year of Finland’s two-year trial to dole out a subsistence amount (no strings attached) to 2,000 unemployed Finns. The Finnish government (wisely) is letting the experiment run and will only look at it the results when the trial ends.

I would not pretend to understand the complexities of financing a universal basic income and the social engineering required to make it work.

An OECD report in 2017 said that despite well-publicised campaigns for a Basic Income, no country has put a BI in place as a pillar of income support for the working age population.

“The recent upsurge in attention to BI proposals in OECD countries, including those with long-standing traditions of providing comprehensive social protection, is therefore remarkable,” the report says.

It’s not so remarkable when one looks into the growing inequality that is being spawned by job losses as a result of automation and digital disruption. As Oxfam said last week, 42 people hold as much wealth as the 3.7 billion people in the poorest half of the world’s population.

This is clearly not sustainable.

From where I sit, the domination of the contract or ‘gig economy’ and a part-time, casual workforce has left the welfare system behind. Moreover, the welfare bureaucracy is unrealistically punitive, in that it forces the unemployed to prove they are pursuing fast-disappearing jobs to qualify for support.

Mainstream conservative publications including The Economist and the Financial Times have canvassed the UBI debate. As the FT said, it “strengthens a sense that the traditional welfare state is no longer fit for purpose”.

The advances in artificial intelligence (AI) are threatening many jobs around the world, the FT said, adding that most workers have come to accept that the job for life has gone for good.

But if the intent of a UBI is to lift people out of poverty and ensure wealthier people pay their fair share of tax, it’s not that simple.

The OECD report concludes that introducing a UBI in countries with strong social support systems would not solve poverty and would lead to higher taxes. Others warn against dismantling welfare systems, which, however flawed, are at least a safety net for the poor and disadvantaged.

George Zarkadakis, an AI engineer and writer, outlined some of the flaws in an article for Huffington Post. Zarkadakis dismissed talk of taxing the cash reserves of fully automated companies, saying this would affect their ability to invest and innovate; they would lose their competitive position to low-tax or zero tax regimes. Likewise, he was sceptical about the hi-tech and energy companies that are lobbying for (and prepared to help fund) a UBI, arguing that this would give them undue political influence.

The ancient ideal of a UBI (Thomas More’s social satire, Utopia, published in 1516), frees creative people and artisans around the fringes of the commercial world to develop their skills without financial pressure. The ‘shall we tell Centrelink?’ poser goes into the dustbin of history, along with the often inaccurate stereotype of the ‘goddamn, long-haired hippy dole bludger’. People on disability pensions would no longer have to get stressed about the fluctuating cycles of their illnesses. For example, a person receiving the blind pension (which is not means tested), can lose it if they recover some sight. There is also the travesty where workers made redundant find out that 30 years of paying tax counts for nothing. Unless their payout is locked up in super, they’ll have to spend every cent of it before dipping into the public purse.

Even a theoretical discussion about a UBI should alert us to many of the anomalies in our welfare system, which arise from outdated legislation and an institutionalised idea that people are out to rort the system.

As for my Kingly privileges for a day (you can tell how far along we are with ‘The Crown’), I was so busy hunting grouse, inspecting broodmares, dallying with ladies-in-waiting and whatnot, I never got around to doing anything. Terribly sorry.

Homelessness and affordable housing

homeless-housing-affordable — Homelessness and affordable housing, photo by Giulio Saggin

Last week I was walking from Roma Street Station to the top end of George Street, the hub of State Government. I was meeting friends for lunch and on the way passed a few apparently homeless young men on park benches, one tucked inside a doorway, others hovering around intersections, nervously smoking.

One young person was sitting on the footpath with a cardboard sign that read “homeless – please help”. I was too preoccupied on my mission so I ignored the hat, not even dropping a few coins on the return journey.

So now I’m hunting around the house for a decent sleeping bag and a beanie, hoping to make amends for my lapse in empathy by participating in a fund-raising community sleep-out on June 29. (If I chicken out I promise to donate money to the cause.)

Our local member Andrew Powell (Member for Glass House) has agreed to participate in the annual sleep-out.

Mr Powell wrote about this in his regular Glasshouse Country and Maleny News column. He will be among local dignitaries, business people and community members sleeping rough outside the Maroochydore Surf Club on June 29. Participants will be given a sheet of cardboard to sleep on and fed a simple meal of soup and bread rolls. Mr Powell says there are 1,500 homeless men, women and children on the Sunshine Coast.

The St Vincent de Paul northern diocese (which is organising the sleep-out), has provided support over the eight months to March 2017 to 450 homeless people, including 250 children.

The gesture by the Member for Glass House is admirable, but this is a problem that has, at best, been patched up by successive Queensland governments. The Sunshine Coast, which has a paucity of affordable and public housing, is named as one of the regional areas to be targeted by the new housing strategy.

The Rental Tenancies Authority published median rents for the Sunshine Coast region in December 2016. Tenants pay between $315 and $400 a week for a three-bedroom home or a two-bedroom unit. Rents are cheaper in the Hinterland areas like Beerwah, Peachester, Mooloolah, Palmwoods, Hunchy and Woombye, but public transport is limited and one needs a reliable car to live in these areas.

Meanwhile, Queensland has a plan

As the debate continues about the lack of affordable housing and how to find beds for homeless people, the Queensland Government has a 10-year plan.

The Government had some fairly positive (and uncritical), press about its plan to provide more than 5000 social and affordable houses. The $1.8 billion Housing Strategy announced in this week’s State Budget aims to get the private sector involved and utilise State government-owned land.

Treasurer Curtis Pitt said it was the biggest commitment to housing in Queensland’s recent history. The strategy will see more than 5,500 social and affordable homes built over the next decade. Eight hundred homes are to be built each year for the first five years. This is about double the number of social and affordable homes built in 2016-2017.

The Minister said the housing strategy includes $1.2 billion to renew the existing social housing property portfolio. A $420 million housing construction program aims to boost the supply of social and affordable housing. This includes $3.5 million to build two refuges for women and children escaping domestic and family violence.

The Government is also allocating $75 million to advance home ownership in ‘discrete’ Aboriginal and Torres Strait Islander communities.

At first glance this sounds like a bold plan, made with some compassion for those struggling to survive in a competitive housing market. On second glance, it is unlikely to make a dent in Queensland’s 25,000+ public housing waiting list.

Too little, too late?

Public and social housing comprised 4.8% of the total national housing stock, according to the Australian Housing and Urban Research Institute (2011 Census data). AHURI’s research showed that at a minimum, the social housing system would have to have been around 43% larger (on 2011 figures) to accommodate all those who met public housing eligibility criteria and who pay more than 50% rent.

Nevertheless the Queensland strategy has been welcomed by the construction industry and the housing sector, as it is said to provide 450 jobs. One of the more positive aspects of the plan is that 5% to 25% of the land used for these purposes will be land already owned by State Government. This implies vacant or under-utilised land near public buildings like hospitals and schools. So maybe at last the under-privileged will get to live in the middle-ring suburbs of Brisbane rather than 49 km away in fast-growing Logan City.

In December 2016, the State Government announced a $1 billion investment plan to build 3000 new houses in Logan City over 20 years. Minister for Housing and Public Works Mick de Brenni said the Better Neighbourhoods Logan initiative would deliver a range of economic and social benefits, including 410 new social and affordable dwellings over the next five years and over 3,000 new homes by 2036. A spokesman confirmed that the 3000 social and affordable homes are part of the Budget housing strategy. That leads me to surmise that another 4000 homes will be built in other regions over 10 years, on average, 40 new houses per year for each of the 10 regions identified by State Development.

The strategy shows some progressive thinking in that new social or affordable housing strategy should incorporate:

Rental bond loans to help tenants meet the private market;
Provision for public housing tenants to own their own home through shared equity loans or rent-to-buy schemes;
A new Housing Partnerships Office to streamline processes and lower costs and time frames;
Private sector involvement through expressions of interest to develop small, medium and large developments in regional centres;
$29.4 million to provide front line services for victims of domestic violence and young people at risk of homelessness. This includes a $20 million boost for ‘youth foyers’ – supported accommodation for young people aged 16-25 who are either homeless or at risk of becoming homeless.

Looking after property investors

The State Budget announcement follows a plan revealed in the 2017 Federal Budget to allow a tax break to invest in social housing.

Retail and institutional investors are being offered a 10% increase in capital gains discount (from 50% to 60%). The Australian Financial Review reported that the scheme, aimed at Management Investment Trusts, would allow the discount to MITs and their investors, provided they offer the properties at an affordable rent for at least 10 years. The AFR said the Government also planned to issue bonds backed by rental income from social housing, replacing bank debt issued to approved social housing developers.

While governments play ‘catch up’ with affordable housing, the onset of winter should turn our thoughts to the homeless.

As Andrew Powell observed, it is not a matter of choice.

“In many cases homelessness comes about through factors out of a person’s control – whether this is mental or physical illness, financial instability, lack of education, domestic violence or something else entirely,” he wrote in the GCMN.

Yes, and sometimes all of the above.

Australia’s hardship index

hardship-poverty-potato — “The Potato Index” Photo by Pat Joyce https://flic.kr/p/asBkcN

There’s an Aussie saying – ‘they’re doing it tough’, which can mean any variation on the theme of hardship, be it financial, emotional, physical or all three at once.

When the word ‘hardship’ is employed, it typically means financial struggle: in other words, privation, destitution, poverty, austerity, penury, impecuniousness and so on.

If you search the word ‘hardship’ online you will find a range of links purporting to explain (if you are doing it tough), how to apply for an early release of superannuation.

Continue reading “Australia’s hardship index”